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Cy Ryan

Aruze Wins Nevada Approval

18 June 2004

CARSON CITY -- Steve Wynn, who is building a megaresort on the Las Vegas Strip, says he and others are in the process of developing a "radical" new slot machine.

Wynn testified before the Nevada Gaming Commission Thursday in support of the application of Aruze Corp., a Japanese company headed by Kazuo Okada, to buy Universal Distributing Company of Las Vegas that is now solely owned by Okada.

Okada is one of the major investors in Wynn's Wynn Las Vegas megaresort to be opened next year on the site of the old Desert Inn. Aruze is an electronics company that produces gaming devices in Japan.

Wynn told the commission that he is "taking advantage" of the knowledge and expertise of Aruze to develop a "breakaway device" of a slot machine. He did not disclose details.

But the commission was told Aruze produces more gaming devices than International Game Technology, the leading slot machine company in the United States.

The commission approved the deal for Aruze to purchase Universal Distributing Company but not before commissioners complained about the lack of candor and slowness of the company in providing documents to the gaming investigators.

Okada pledged through an interpreter to change that in the future. He said the problems were due to "cultural differences and the language barrier."

This application has been before the gaming regulators for five years. It was first heard in 2000 and referred back for further investigation.

Commissioner Arthur Marshall said, "I don't have a lot of patience" with the explanation of cultural differences. "You (Okada) didn't do anything wrong but you failed to disclose point after point after point. That doesn't wash with cultural differences."

Commissioner Augie Gurrola said, "We can't stand for any more failures of this type."

Okada said he will comply with the regulations.

But Commissioner Sue Wagner said Okada promised in 1997 to do better and failed to do so.

Bob Faiss, a Las Vegas attorney representing Aruze and Okada, said Okada has hired Yoshiyuki Shoji, who speaks both Japanese and English, to be the executive to provide information and documents to the state Gaming Control Board and its agents when they ask for it.

Faiss said there was a failure of Aruze to timely produce requested information and documents. But these failures occurred in the earlier period of this five-year investigation. He said the problems have been corrected and the staff members responsible are no longer with the company.

Faiss said Aruze has spent more than $181,000 in translating documents requested by the board in the past year.

Wynn, in testifying in support of Okada, said the Japanese businessman put up more than $400 million for projects in Las Vegas and Macau.

He said Okada believes in principals more than money. "We take the high road," Wynn said.

Shoji was questioned extensively by commission Chairman Peter Bernhard about his relations with Okada, if he had access and how he would advise him.

Shoji said he is a door away from the office of Okada in Japan. If Okada does not take his advice to comply with regulations, Shoji said he would continue to talk to Okada until he convinced him to follow the rules.

Bernhard said one of the "overriding themes" of the investigation has been the "candor, disclosure and cooperation" of Okada and the company. And he wanted to make sure this does not happen again.

Aruze plans to manufacture devices and then distribute them through Universal Distributing in Las Vegas. The manufacturer's license is limited to two years, when a new application will have to be filed.