Technology Holdings accuses former Texas distributors of copying game maths

Technology Holdings Corporation and three affiliated software companies filed a lawsuit in the Western District of Texas on 20 October against SFS IT Services, Semper Fido Sweepstakes, Morris Joseph and SFS vice president Cody Rogers. The plaintiffs allege that their former exclusive Texas distributor copied the maths behind 15 of their games and ran them on a rival platform in more than 100 locations. The claims have not been tested in court, and the filing contains no response from the defendants.

The complaint states that the plaintiffs' business is licensing sweepstakes software and supplying the terminals on which it runs, with SFS and Semper Fido using that licence to place games in Texas business venues. That exclusive Texas arrangement, per the filing, stretches back to 2018. A January notice announced the defendants would not renew, and the licence lapsed on 28 April; the plaintiffs allege that on or about 24 May, in the middle of the night, StealthX was replaced by the defendants' own Phantom platform.

Fifteen of the plaintiffs' titles share reel strips with 23 Phantom games, the filing alleges; reel strips are the symbol sequences that shape payouts. The relief sought includes destruction of Phantom, monetary damages and an order permanently barring further use. Against all four defendants the claims allege trade secret theft under federal and Texas law, while the two companies also face breach of contract allegations. A jury trial has been requested.

The filing recounts that a senior software engineer for the plaintiffs located symbol codes and reel-stop positions in Phantom's Country Lights game. When he applied those positions to the StealthX strips, the filing says, all 15 visible symbols came out matching. Per the complaint, he ran the same test on Country Lights four additional times, then found matching reel-strip configurations spanning 23 Phantom games.

Under the licence, the filing says, the defendants could preview new games in a test lab, and the plaintiffs allege on information and belief that the StealthX code was taken apart there. The complaint also points to November 2025, when SFS is said to have started shifting customers to new contracts; these removed a reference to SFS Sweepstakes Software and prohibited customers from using any directly competing system. According to the filing, Rogers put his signature to those agreements.

The plaintiffs characterise what they sell as sweepstakes promotions that require no purchase, among them charitable ones operated by civic groups. Access to the raw code, they say, is limited to staff at their Dallas office, and the code is scrambled before it leaves the building.

Technology Holdings said: "Defendants could not have been up and running with new software virtually overnight unless they had been working on stealing and utilizing Plaintiffs' trade secrets." The complaint also states: "There is simply no way for this to happen accidentally." The plaintiffs frame the motive as financial, with the filing stating: "They no longer wanted to pay Plaintiffs their licensing fee."