Las Vegas casino sues IBM

Wynn Las Vegas filed suit against IBM and Miro Software in a Nevada district court, alleging Big Blue has made unreasonable and immoral demands in an offer which it can refuse.

Wynn alleged that IBM had asked it to cough up $8 million for two years use of software which the casino had already paid. IBM had claimed that Wynn’s use of Maximo business software exceeds the licence, even though IBM and Miro – which Big Blue bought some years back, was aware of earlier terms and conditions.

The filing reads: “Wynn – which fully trusted IBM to set up the system appropriately – must pay nearly 100 times the software price that IBM and MRO invoiced and that Wynn consistently has paid.”

So Wynn is suing IBM for unfair and deceptive trade practices, breach of covenant of good faith and fair dealing, and other business torts.

“Either IBM is under an egregious misapprehension concerning the price of the software and services for which Wynn agreed to pay… or IBM is attempting deliberately to take unfair and unlawful advange,” claimed Wynn.

The Wynn Las Vegas casino went live with Maximo software on February 21, 2005 but there were problems, and the software system often crashed or failed.  Wynn annually paid for maintenance on the Maximo 15/20/500 licence.

When Big Blue bought Miro in October 2006, it re-assured Wynn that the licence and maintenance would continue and never said that there was a change to the licence agreements.

Just as Wynn prepared to open its Encore casino, it bought additional licences from IBM and paid tens of thousands of dollars for the licences and implementation.

But in 2010, IBM claimed that Wynn should have bought nearly 2,000 extra licences, with 1,169 of these costing $4,600 apiece, the rest $2,310 apiece. It issued a bill to Wynn for $8 million.

When beancounters at Wynn asked for an explanation, IBM claimed that the existing licence agreement didn’t take account of every Wynn employee’s use of the software – for example, each housekeeper who used the software to report and follow up on guest maintenance needed her or his own multi thousand dollar software licence.

“IBM’s demands are absurd, unjustified, and unconscionable; yet, IBM continues to press them. For serval months now, IBM has consistently demanded that Wynn pay $9.7 million for past and anticipated furure use of Maximo software. IBM’s unwavering demands have created an urgent situation of legal and financial uncertainty for Wynn that calls out for judicial intervention,” the filing said.

Go tell it to Ballys.