A Not-so-Sunny Day for Microgaming

27 March 2002

Tensions were high today after the six-year relationship between Casino Fortune, an online casino owned by Sunny Casinos, and Microgaming Systems Ltd., the casino's software supplier, came to an ugly end.

Serious allegations have been levied from both sides.

"I am confident that other previous licensees of Microgaming will admit that they too did not receive the necessary attention. Something had to be done."
-Nicole Greene
Sunny Group

Sunny Casinos is claiming it was forced to walk away from its agreement with Microgaming after suspicions arose over the Microgaming's random number generator. Sunny felt the mechanism, which is the guts of gambling software, was being manipulated so players would lose more.

Microgaming software powered three Sunny casinos, Casino Fortune, Mapau Casino and Miami Beach Casino.

Officials with Microgaming, meanwhile, stated that the software company terminated the partnership because Sunny failed to meet numerous deadlines for licensing fees and other costs. The company said it regretted having to cut Sunny loose, but felt that it was left with no other options. The decision, the company added, was not taken lightly and made with a heavy heart.

"Sunny Group has not been settling its outstanding licensing fees for some time, and its current licensing fees were severely in arrears," the company said in a statement released today. "Microgaming was left with no alternative but to terminate the software license agreement with the Sunny Group (Sunny Casinos' parent company). Notice of the termination was given and confirmed by Microgaming’s lawyers."

Sunny Group felt as though they had been painted into a corner as well, according to the company's public and media relations manager, Nicole Greene. Greene told IGN that officials with Sunny started to get suspicious nearly three months ago.

When the unusual activity was spotted, she said, Sunny Group requested audit reports from Microgaming. She said Microgaming responded lackadaisically to Sunny's requests and, at times, didn't respond at all.

"The allegations made in support of these grounds in [Sunny Group's press] release are quite simply false and are known to the Sunny Group to be false."

"I am confident that other previous licensees of Microgaming will admit that they too did not receive the necessary attention. Something had to be done," she said. "The issue regarding the pay-out percentages was just the final straw, and we couldn't continue to operate on delayed and deferred service from Microgaming."

Greene said Sunny Group prides itself on excellent customer service and fast pay-outs. With Microgaming, she explained, upholding these standards was impossible.

Microgaming categorically denied the insinuations from Sunny Group and said the allegations were "spurious grounds" for the contract termination.

"The allegations made in support of these grounds in [Sunny Group's press] release are quite simply false and are known to the Sunny Group to be false," Microgaming stated. "Microgaming regrets that the Sunny Group has sought to hide its financial embarrassment in this manner."

Greene said Sunny Group was up to date on all payments and is owed money from Microgaming for the loss of production time.

Microgaming wasn't the only target of Sunny Group's allegations. Sunny alleged in its statement that Microgaming's independent auditing firm falsely reported that the software supplier's random number generator was functioning properly. Sunny also said that audit reports over the last three months have been produced late or not at all. Microgaming sites are advertised as audited by PriceWaterhouseCoopers, although the big-five accounting company wasn't specifically named in Sunny's press release.

Sunny released a second statement claiming an employee with Casino Fortune was "physically prevented" from securing the company's servers located at the Mohawk Internet Technology facility in Canada. According to Sunny, a company official went to the hosting facility Tuesday to secure the server after suspicions arose that Microgaming was interfering with customer information stored on the machine.

Michael Tobin, the CEO of MIT, told IGN there are strict guidelines and regulations for any servers that enter or leave the MIT facility and added there was no physical exchange between the Sunny official and MIT workers.

The Kahnawake Gaming Commission will not let any server leave its premises, Tobin said, until they have been assured that all players have been paid balances due and that the proper exit procedures have been conducted. When operators have switched hosting facilities or shut down all together in the past, he said, the Mohawk gaming commission has worked with them to assure the process went through the proper channels.

Tobin also pointed out that no one from Microgaming is allowed to tamper with the servers, per rules of MIT and the gaming commission. He said any allegation that anyone from Microgaming is getting information off of the server is false.

According to Tobin, Sunny Group and Microgaming have been notified to send technology officials to MIT where a mediator will determine what on the server belongs to Microgaming and what is Sunny Group's and stays on the server.

Sunny Group said it has already consulted its lawyers and could seek legal action against both MIT and Microgaming.

Microgaming said it is doing everything possible to assist Sunny Group and is finalizing its data so it can pay out its players.

Sunny Group, meanwhile, is putting the finishing touches on the switch-over to Playtech, its new software supplier.

For Microgaming, the falling out signifies the loss of another well established licensee. Last year Golden Palace, English Harbour and King Solomon's, all Microgaming-powered online casinos, switched from Micrograming to other software suppliers.