DoubleU Games plays down lawsuit against US affiliate
[THE INVESTOR] Korean social casino game operator DoubleUGames said on April 15 that a lawsuit filed against its US affiliate Doubledown Interact would have limited impact.
DoubleUGames’ statement came after a class action suit was filed against four social casino game companies including DDI in Washington on April 12, following a court ruling on March 28 terming operations of US-based Big Fish Casino as illegal online gambling as per state law.
“We believe that the ruling of the Ninth Circuit of US Court of Appeals on Big Fish Casino is quite unusual,” the company said in a statement, citing four previous cases that all rejected gambling claims.
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“We will work with the social casino industry to respond to this lawsuit as quickly as possible, and it will not have any financial or business impact on our company at this time.”
DoubleUGames acquired DDI for US$825 million a year ago in the largest overseas purchase by a Korean game company.
Its sales and operating profits are estimated to reach 116.9 billion won (US$109 million) and 31.8 billion won, respectively, in the first quarter of 2018, according to Hanwha Investment & Securities analyst Kim So-hye. “Marketing costs will increase inevitably but it would be acceptable considering growing average revenue per user and daily active users,” Kim said.
Shares of the KOSDAQ-listed company recovered in morning trading on April 16, rising more than 5 percent to 60,200 won. On April 13, the shares fell almost 10 percent to close at 57,100 won, following reports of the lawsuit.
By Park Ga-young (email@example.com)