Keycorp, TAB settle suit

The TAB and electronic payments provider Keycorp Limited have reached a settlement, following a recent claim made by the TAB relating to faulty components used in gaming machines across NSW.

In mid-August, the TAB commenced litigation against Keycorp, claiming $6 million in damages, in relation to a device supplied by Keycorp which was used in TAB gaming machines in 2000 and 2001.

In a statement issued to the ASX on Wednesday, Keycorp CEO Bruce Thompson said: "Keycorp believes the sole cause of any problem is a defective component manufactured by a US company and is confident that it has not used the component in any Keycorp device other than the TAB device".

The parties have now signed a formal agreement on the terms of settlement of the dispute, Thompson said. "Those terms include a significant part of the claim being paid by the company's insurer and the company continuing to replace the defective component in the affected devices as part of maintenance services for TAB's fleet of such devices under a maintenance agreement.

"It is anticipated that the company will pursue a subrogated recovery action against the US manufacturer of the defective component and its Australian distributor for both insured and uninsured losses," he said.