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Gaming Guru

Richard N. Velotta

Commission Delays Action on Club's Slots

27 September 2004

A Las Vegas topless dance club won a reprieve for the shutdown of its 13 video poker machines Friday when the Nevada Gaming Commission voted to postpone action on a state Gaming Control Board complaint over alleged violations of state gaming laws.

But next month the Olympic Garden could find its machines sealed by Control Board agents if commissioners determine that an unlicensed partner is sharing in the proceeds of those machines.

Commissioners voted unanimously to postpone action on the complaint until more information is received on the ownership role of OGLA LLC, a 50 percent partner in the club with Peter Eliades.

Deputy Attorney General Jennifer Carvalho, arguing on behalf of the Control Board, told commissioners that when Eliades sold half of his interest in the club to OGLA -- described by an Olympic Garden attorney as a consortium of individuals and investment groups -- the club was in violation of gaming laws.

She said that OGLA has no licensing application on file with the state and that none of the company's officers has been investigated.

But Olympic Garden attorney Richard Wright told commissioners the deal with OGLA was subject to the company's receiving licensing, not just a gaming license but liquor and business licenses as well. Eliades said he continues to supervise the day-to-day operation of the club, and that representatives of the company had no operational control.

Carvalho countered that tax records indicate OGLA already is sharing in the proceeds of the club.

Carvalho said the state was prepared to seal the club's machines Friday night, but commission Chairman Pete Bernhard said he wanted to be completely certain that the state had the authority to do that.

"I'm about 95 percent sure -- maybe 98 percent sure -- that we could take this action," Bernhard said. "One more month isn't going to hurt the state's position."

The matter is expected to be revisited at the commission's October meeting in Carson City.

In other business Friday, commissioners approved settlements and fines against Station Casinos Inc. and operators of Peppermill Casinos Inc. and Wendover Casino Inc., and placed two people on the state's list of people excluded from casinos.

Las Vegas gaming attorney Frank Schreck delivered two checks, one for $2.2 million and the other for $173,621 to cover fines and compensatory payment for costs and expenses incurred by the state in the investigation of Station Casinos Inc.

It was the second-highest fine assessed by the state for a violation of a financial reporting complaint, with the largest paid by MGM Mirage in 2003 when former company compliance officer Christopher Morishita failed to file a series of financial reports. MGM Mirage paid a $5 million fine in that case.

In the Station incident, Control Board investigators found similar circumstances but determined that the violations were administrative in nature and there appeared to be no attempt to intentionally circumvent reporting requirements. Investigators also said that there was no evidence of money laundering and that no criminal charges were to be filed.

The incident began as a series of alleged irregularities in reporting at Station's Santa Fe Station property. The company alerted the Control Board and conducted its own internal audits and the investigation ultimately led to reporting problems at the company's Sunset Station and Fiesta casino properties.

In Friday's meeting, Station Chief Financial Officer Glenn Christenson indicated the cost to the company was considerably greater than the $2.4 million it handed over to the state. He said the company spent $3.9 million to assure the company would stay in compliance with reporting requirements and that it expects to pay an additional $1 million a year to maintain the effort.

Christenson said a $1.4 million document retrieval system was acquired and nine compliance officers and seven internal auditors were hired. He also said some personnel had been fired over the incident, but he wouldnt say how many people lost their jobs.

Commissioners also approved settlements and fines for Albert Seeno Jr., a licensee and director of Peppermill Casinos Inc., and Albert Seeno III, a licensee with Peppermill Casinos and Wendover Casino Inc.

Seeno Jr. was fined $775,000 and his son was fined $25,000 for their association with convicted felons.

Neither man was at Friday's commission meeting.

Commissioners also added two persons to the state's "black list," or the List of Excluded Persons, prohibited from entering Nevada casinos.

Dennis Andrew Nikrasch, also known as Dennis McAndrew, who has served two prison terms for slot-cheating scams that totaled about $16 million, and Eugene Bulgarino, one of Nikrasch's associates who authorities said used a concealed hand-held computer to program slot machines to pay big jackpots, were banned from state casinos in unanimous votes.

Neither was present at Friday's meeting to contest allegations against them.