Koin Mobile Files Antitrust Lawsuit Against Everi for Cashless Payment Issues
Koin Mobile, a digital payments company, has accused Everi, a casino-supplier giant, of "misusing its power... to suppress competition" in the fast-growing cashless-payments gaming market.
In a complaint filed in Nevada's federal court on Friday, Koin alleges that Everi illegally forces casinos to exclusively use its own digital payment product by linking it to its other services involving cash-access.
Everi provides slot machines, as well as financial equipment and services, to casinos and has contracts with the vast majority of operators in the US, according to the lawsuit. The company is estimated to control between 75% to 90% of cash-access transactions in land-based casinos across the country.
Everi itself reported delivering $25 billion to casino floors in 2017, more than $30 billion in 2019, and more than $40 billion in 2022.
"Burdensome Agreements"
However, it has monopolized the market by imposing "burdensome," long-term exclusive agreements that bar operators from working with other digital wallet providers with better products, the lawsuit alleges.
Everi has implemented a strategy, known as tying, where it forces casinos to sign complex, long-term exclusive agreements, lasting for a minimum of five years with automatic renewals, rights of first refusal, and burdensome forfeiture clauses, for cash-access products. It also forcibly includes its cashless or "quasi-cash" products as a condition for receiving Everi's cash-access products, according to the legal action.
Digital wallets are not yet widespread in the land-based gaming industry, but they work similarly to PayPal or Venmo in the non-gaming world, with added features tailored to the highly regulated casino sector.
They allow patrons to fund their gambling without the need for cash by connecting external funding sources like credit cards and bank accounts to smartphone apps that can then interact with casino-management systems.
Koin vs. Everi
Koin's digital wallet, called Koin Wallet, competes with Everi's CashClub Wallet. The lawsuit states that Koin's product is a potential threat to Everi's market leadership, and the larger company has tried to squash competition as a result, meddling with Koin's casino business relationships.
Everi's planned merger with multinational gaming provider International Game Technology (IGT) will only strengthen its market dominance, Koin claims in the legal action.
"The combined Everi-IGT entity will hold significant control over the digital-wallet markets, with the ability to unilaterally lock in customers, lock out competitors, and raise prices to casinos and patrons while offering a subpar product," the complaint asserts.
The lawsuit seeks "tens of millions" in damages for lost profits and business opportunities.
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Source: www.casino.org
