KeyCorp told the Australian Stock Exchange today that the amount of damages claimed was "yet to be fully disclosed, but said by TAB to be in excess of AU$6 million".
The supplier said in a statement that device was a custom development commissioned by -- and supplied only to -- TAB.
"It is used to interface gaming machines in NSW venues with TAB's centralised monitoring facility.
"Most of the devices were deployed by TAB in 2000 and 2001".
KeyCorp said it believed the sole cause of any problem was "a defective component manufactured by a U.S. company.
"KeyCorp had no reason to suspect the component was faulty and, as soon as it became aware of possible problems, became working with TAB to identify the cause and minimise the impact on TAB.
"KeyCorp is confident that it has used the particular component only in the TAB device and not in other KeyCorp products".
KeyCorp said it had taken preliminary legal advice on "upstream issues and believes it has causes of action against the US manufacturer and Australian distributors of the component".
It had also notified its insurer of the claim and said it believed "a significant part of the damages claimed by TAB, if proven, should be covered by the company's insurance".
However, KeyCorp's insurer had not yet given the company an unrestricted confirmation of indemnity.
