8-K

United States

Securities and Exchange Commission

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  September 2, 2010

SHUFFLE MASTER, INC.

(Exact name of registrant as specified in its charter)

Minnesota (State or Other Jurisdiction of Incorporation or Organization)	0-20820 (Commission File Number)		41-1448495 (IRS Employer Identification No.)
1106 Palms Airport Drive Las Vegas, Nevada (Address of Principal Executive Offices)		89119-3720 (Zip Code)
Registrant’s telephone number, including area code: (702) 897-7150

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

On September 2, 2010, the Eighth Judicial District Court, Clark County, Nevada, gave preliminary approval to a settlement of all derivative litigation including the Eighth Judicial District Court action entitled Gerard Denham v. Yoseloff, et al., Case No. A-09-603275-C, as well as derivative actions pending in the United States District Court for the District of Nevada, entitled Pirelli Armstrong Tire Corporation Retiree Medical Benefits Trust v. Yoseloff, et al., Case No. 2:07-cv-01215-KJD-LRL and Hodgkins, et al. v. Shuffle Master, Inc. et al., 2:07-cv-01263-KJD-GWF, brought against Shuffle Master, Inc. (NASDAQ Global Select Market: SHFL) (either the “Compan y,” “we” or “our”) and certain current and former officers and directors (previously disclosed) and, if finally approved by the Court at a hearing currently scheduled for October 26, 2010, will result in the dismissal with prejudice of all derivative litigation in exchange for certain corporate governance alterations and payment by the Company's insurers of attorney’s fees. The details of the settlement are included in the attached Notice of Settlement and in the Stipulation of Settlement, a copy of which, along with the Notice of Settlement, will be posted on the Company’s website at www.shufflemaster.com on September 7, 2010.  The attached Notice of Settlement provides information as to how an opposition to the settlement may be filed with the Court.  The Company and the individual defendants have denied and continue to deny any and all liability, and the settlement does not requir e any monetary payment by the Company or the individual defendants themselves.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1   Notice of Settlement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SHUFFLE MASTER, INC.

(Registrant)

Date:  September 3, 2010

/s/ PHILLIP C. PECKMAN

Phillip C. Peckman

Chief Executive Officer

EX-10.1

EXHIBIT 10.1

TO: ALL CURRENT SHAREHOLDERS OF SHUFFLE MASTER, INC. (“SHUFFLE MASTER” OR THE “COMPANY”) COMMON STOCK AS OF JULY 20, 2010.

PLEASE TAKE NOTICE that the above-captioned consolidated shareholder derivative action, as well as derivative actions pending in the United States District Court for the District of Nevada, entitled Pirelli Armstrong Tire Corporation Retiree Medical Benefits Trust v. Yoseloff, et al., Case No. 2:07-cv-01215-KJD-LRL and Hodgkins, et al. v. Shuffle Master, Inc. et al., 2:07-cv-01263-KJD-GWF (together, the “Actions”), are being settled and the parties have entered into a Stipulation of Settlement dated July 20, 2010 (“Stipulation”).

IF YOU ARE A CURRENT OWNER OF SHUFFLE MASTER COMMON STOCK, YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THE ACTIONS.  PLEASE NOTE THAT THE ACTIONS ARE NOT “CLASS ACTIONS” AND NO INDIVIDUAL STOCKHOLDER HAS THE RIGHT BE COMPENSATED AS A RESULT OF THIS SETTLEMENT.

On October 26, 2010, at 9:00 a.m., a settlement hearing (the “Settlement Hearing”) will be held before the Honorable Elizabeth Gonzalez, District Court Judge for the District Court of Clark County, Nevada, in Department 11, located at 200 Lewis Avenue, Las Vegas, Nevada 89101, to determine: (i) whether the terms of the settlement should be approved as fair, reasonable, and adequate; and (ii) whether the Actions should be dismissed on the merits and with prejudice.

The terms of the settlement set forth in the Stipulation include: (i) the adoption and/or implementation of a variety of corporate governance measures, including enhanced requirements for the Head of the Internal Audit Department and the Audit Committee, the separation of the Chairman of the Board and CEO positions, and an increase in the number of independent directors serving on the Company’s Board of Directors; and (ii) Shuffle Master’s payment of Plaintiffs’ Counsel’s attorneys’ fees and expenses in the amount of $1 million.

Any current shareholder of Shuffle Master that wishes to enter an appearance and object to the settlement shall have a right to appear and to be heard at the Settlement Hearing, provided that he or she was a shareholder of record as of July 20, 2010, and that they follow the steps listed below.  Any shareholder of Shuffle Master who satisfies this requirement may enter an appearance through counsel of such member’s own choosing and at such member’s own expense or may appear on his, her, or its own.  However, no shareholder of Shuffle Master shall be heard at the settlement hearing unless, no later than fourteen (14) days prior to the date of the settlement hearing, such shareholder has filed with the Court and delivered to Plaintiffs’ Counsel, counsel for the Special Demand Revi ew Committee, and counsel for the Individual Defendants and nominal party Shuffle Master (listed below): (a) a written notice of intention to appear; (b) proof of ownership of Shuffle Master stock, including the date(s) such Person acquired his, her or its Shuffle Master shares; (c) a statement of objections to any matter before the Court; and (d) the grounds therefore or the reasons for wanting to appear and be heard, as well as all documents or writings the Court shall be asked to consider.  Only shareholders who have followed the procedures above and have filed and delivered validly and timely written notices of objection will be entitled to be heard at the Settlement Hearing unless the Court orders otherwise.

If you wish to object to the settlement, you must file a written objection setting forth the grounds for such an objection with the Court on or before October 8, 2010, with service on the following parties:

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THE WEISER LAW FIRM, P.C.

KATHLEEN A. HERKENHOFF

12707 High Bluff Drive, Suite 200

San Diego, CA 92130

THE WEISER LAW FIRM, P.C.

ROBERT B. WEISER

121 N. Wayne Avenue, Suite 100

Wayne, PA  19087

Counsel for plaintiff in the State Derivative Action

ROBBINS GELLER RUDMAN

& DOWD LLP

JEFFREY D. LIGHT

655 West Broadway, Suite 1900

San Diego, CA 92101

Counsel for plaintiffs

in the Federal Derivative Actions

PAUL, HASTINGS, JANOFSKY

& WALKER LLP

PETER M. STONE

1117 South California Avenue

Palo Alto, CA  94304-1106

Counsel for the Special Demand Review Committee

JONES VARGAS

KIRK B. LENHARD

TAMARA BEATTY PATERSON

3773 Howard Hughes Parkway

First Floor South

Las Vegas, NV  89169

Counsel for Shuffle Master and the Individual Defendants

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Inquiries may be made to Robert Weiser, Esq. of  The Weiser Law Firm, P.C., 121 N. Wayne Ave., Suite 100, Wayne, PA 19087, telephone (866) 934-7372 or to Rick Nelson, c/o Shareholder Relations, Robbins Geller Rudman & Dowd LLP, 655 West Broadway, Suite 1900, San Diego, CA  92101, telephone (800) 449-4900.

DATED:  _____September 3, 2010 BY ORDER OF THE COURT

EIGHTH JUDICIAL DISTRICT COURT

FOR THE STATE OF NEVADA

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