Table games supplier MAO Gaming filed a lawsuit against Penn Entertainment’s (NASDAQ: PENN) Ameristar Casino in Black Hawk, Colo., claiming the operator infringed on trademarks pertaining to MAO’s STREAK blackjack game.

As of Dec. 1, 2001, Mississippi-based MAO held the rights to the STREAK variation of blackjack, which was patent-protected. Put simply, STREAK is a side bet on standard blackjack tables that allows bettors to wager on how many times they’ll be dealt blackjack. Typically, blackjack is the most popular table game at Las Vegas and regional casinos.

In a filing in the US District Court for the District of Colorado, counsel of MAO contended that Ameristar Black Hawk “advertised, promoted, offered, and ultimately profited from the unauthorized and unlicensed use of MAO’s marks.”

After almost fifteen (15) years of annually-renewed licensed use at Ameristar Casino Black Hawk, PENN knowingly, intentionally, and willfully ignored its contractual obligations and infringed on MAO’s iconic STREAK® brand by facilitating unlicensed STREAK® blackjack table games – one of the most successful casino table games ever developed,” according to the legal document.

The filing added that MAO believes Penn allowed the infringement of STREAK trademarks to continue unchecked for two years at the Black Hawk casino hotel. MAO’s suit emerged about two weeks after a card counter from Georgia sued the venue for illegal detainment.

STREAK ‘Exclusive Property’

Counsel for MAO also noted that with each annual renewal Penn committed to with the gaming supplier, the contracts specifically stated STREAK was “exclusive property” of the supplier.

“These circumstances legitimize the categorization of Ameristar/PENN’s actions as willful and intentional,” added counsel for MAO in the court filing. “This begins with the fact PENN’s business is casino gaming operations; it continues with the fact that Ameristar/PENN agreed via contract that all STREAK® products were the exclusive property of MAO which they had no right to use without a license; it continues with the fact that Ameristar/PENN stipulated via contract that if they utilized STREAK® without a license, their conduct constituted willful infringement.”

The CCGC is clear about how casino operators can offer STREAK at their blackjack tables.

“STREAK may be played only on tables displaying the approved STREAK table layout and equipped with one approved STREAK button for each player’s position,” noted the regulator. “The button shall have distinctive markings as specified by MAO Gaming, and shall display the name or logo of the retail licensee offering the game.”

MAO Implies Penn Knew it Was Infringing

In the legal document, MAO claimed that given the nature of its contracts with Ameristar Black Hawk, it’d be “impossible” for the operator and/or the venue to not know the ability to generate revenue from STREAK rested solely with procuring a license from MAO.

“PENN’s conduct required it to engage in deceptive practices with the Colorado Gaming Commission and make inaccurate market statements about the alleged regulatory compliance of its casino operations. PENN’s statements regarding its core business endeavors were disclosed to the market under its reporting and transparency obligations as a publicly traded company,” according to the filing.

While it’s the smallest town in Colorado, Black Hawk is home to the state’s largest gaming scene — one that ranks as the 10th-largest and as the fastest-growing in the US. As such, there are investment implications, because four Black Hawk operators are publicly traded companies. In alphabetical order, they are Bally’s (NYSE: BALY), Caesars Entertainment (NASDAQ: CZR), Monarch Casino & Resort (NASDAQ: MCRI), and Penn.

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