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Cy Ryan

Gaming Commission issues license to CEO with short leash

22 June 2009

CARSON CITY, Nevada -- The Nevada Gaming Commission has granted a license to Jon D. Berkley as president and chief executive officer of Las Vegas Gaming, Inc., but it's going to keep him on a short leash.

The commission limited the license to one year to see if the company that operates in 12 states can improve upon following the rules.

Commission Chairman Peter Bernhard told Berkley "We have had bigger problems" since he joined the company two years ago. "It's almost a disregard for the compliance plan," Bernhard said.

Bernhard suggested the one-year limited license to "show us what he has done in compliance."

Commissioner John Moran Jr. said it "would be easier for me to vote for the license if we had more controls." And Commission Tony Alamo said he wants Berkley on a "short leash," to see if the company complies with the rules.

Berkley said he didn't realize his directions to company employees were not being carried out. "I didn't realize we were out of compliance," he said, and added he has hired two former agents of the state Gaming Control Board to get the company back on track.

One of the former agents, Gregg Schatzman, told the commission the company "has a lot of deficiencies." He said "We will have to do a lot of overkill" to make sure the firm is following its rules.

These compliance plans include such things as making sure the appropriate reports are filed with the control board; seeing that the firm deals only with purveyors that don't have disciplinary problems and ensuring its key personnel have not had trouble with the law in the past.

Berkley said he will "make sure the company walks the line."

Las Vegas Gaming Inc. has a manufacturers and distributors license and also operates on 38 Indian reservations. It is a supplier of bingo games and keno systems and it operates Nevada Numbers and Million Dollar Ticket.

Berkley left some information off of his gaming application. And the company failed to do background investigations on people it hired.

Commissioner Joe Brown said he was "very troubled" that the investigative report showed Berkley was "less than truthful" in dealing with the board agents. But board members said they did not think it was on purpose.

Attorney Anthony Cabot, representing Berkley, said this has been a "learning experience" for him, having never been in the gaming industry before.

The company was fined $10,000 by the state this year when its bankroll twice fell below the required minimum. And it paid a $30,000 fine in 2007 for issuing a false press release that gave the impression it operated a lottery, which is illegal in Nevada.