Software inventor still owed money for patents sold to now-foreclosed Progressive Gaming

A software inventor who sold four patents to now-foreclosed Progressive Gaming International Corp. is still owed about $1 million for the intellectual property and isn't sure how he will collect his money.

The patents, which cover devices that can be used to automatically monitor and secure casino card games, were purchased by International Game Technology in January when the slot machine maker acquired "substantially all of the assets" of Progressive Gaming in a liquidation sale.

Dale Hill, a 74-year-old resident of Spring Branch, Texas, developed the products. Hill said he sold the patents to Progressive Gaming in December 2004 for $2.7 million through his company, Smart Shoes Inc. He has been paid about $1.7 million but the last time he received a payment from the company was in October.

"I'm just an old 21 dealer trying to survive," Hill said, adding that he spent 40 years as a dealer in the gaming industry before retiring to Spring Branch, which is near Houston. "There is a lot of potential in these patents. I just want to be paid what I'm owed."

Andrea Greene, an associate general counsel for Progressive Gaming, told Hill in an e-mail Tuesday that IGT purchased the patents in question on Jan. 16.

"I understand that money is owed for the patents," Greene wrote. "Unfortunately, (Progressive Gaming) is in a situation where it cannot pay its creditors."

Greene said the company is not conducting business and expects to file Chapter 7 bankruptcy.

"As such, regrettably PGIC cannot make any payments owed for the patents," she wrote.

Greene did not return an e-mail or phone call from the Review-Journal.

Hill said he has spoken with IGT executive Rich Pennington, the company's senior vice president of product management, about the patents, but the situation hasn't been resolved.

"IGT apparently was not aware of the balance owed us on the patents," Hill said. "However, IGT has not made a decision to pay the debt."

An IGT spokesman was unavailable to comment on the matter.

IGT did not disclose what it spent to acquire Progressive Gaming's assets but said its global operations would be combined with IGT's international and American offices.

Progressive Gaming was primarily a gaming technology company that owned patents for casino management systems that were connected to some 70,000 slot machines worldwide. The company spent almost two years in financial turmoil until it missed a $17 million payment deadline on money owed to Private Equity Management Group of Irvine, Calif.

IGT loaned Progressive Gaming $15 million through a convertible note in August and had other technology-related joint ventures with the company before buying the assets in an Article 9 foreclosure sale.

Most of Progressive Gaming's upper management had vacated the company since September as its financial troubles mounted.

Hill's patents covered a card scanner built into a card-dispensing shoe and other software that could determine the proficiency of blackjack players' skills and value to the casino.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.