US Gaming Company’s Operations Restricted for Microsoft Piracy

By Sam Ulhaq. July 21, 2020.

A North Dakota gaming company was forced to shut down a part of its business following a suspension order issued by the state. The Attorney General’s Gaming Division launched an investigation in May 2020 against Powerhouse Electronic, headquartered in Rocklin, California, after “credible information” was received about the apparent use of unlicensed software following a report by an employee.

Following the report, investigators for the state found that Powerhouse Electronic was illegally using several KMS servers – which are used to authenticate Microsoft software license keys, to technically bypass the authentication process and facilitate the use of pirated software. According to Wayne Stenehjem, the Attorney General, Microsoft deems this a hack and improper use of the software that violates established copyright laws.

Microsoft’s legal team stated that the software was unlicensed and demanded that its software use at Powerhouse Electronic be halted immediately.

The state’s investigation found that Powerhouse Electronic has deployed the software on up to 500 devices, specifically the profitable pull-tab devices, which now cannot be used until valid and genuine software licenses are obtained from Microsoft or its channel partners.

Mr. Stenehjem confirmed that the gaming license suspension order will remain in effect until Powerhouse Electronic can evidence that the company is in full compliance with all gaming regulations in the state.

In response, Powerhouse Electronic has not responded formally and has not provided any comment following requests. Pull tab devices have increased in popularity in North Dakota, with almost $350 million gambled in 2019. $36 million of this revenue was directed to charitable organizations.

This case highlights the need for powerful and accurate SAM software, which should be supported by a strong SAM program. Revenues have become scarce for software vendors – as Covid-19 bites. Vendor compliance teams have significantly increased the frequency of audits with the hope of recouping lost business. Audit related costs could be quite debilitating for a business using unlicensed software.

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