Vegas gaming firm wins legal fight over software

Friday, March 20, 1998 | 11:19 a.m.

American Wagering bought Autotote's Las Vegas subsidiary in 1996.

A federal judge in Reno ordered Autotote to return sports betting software licensed from American Wagering at the time of the 1996 sale. Autotote had provided the software to one of its customers, The Caliente Group, which runs the Agua Caliente racetrack in Tijuana, Mexico.

The dispute erupted when Autotote, looking to exit the Mexican market, tried to sell its license outright to Caliente.

American Wagering is barred by Nevada regulators from doing business with Caliente. To prevent a software transfer that might cause licensing problems, American Wagering won a temporary restraining order against Autotote. This week's court decision made that order permanent.

"They have an obligation to retrieve our software from Caliente," said Bob Ciunci, chief financial officer at American Wagering.

An Autotote official said the company is mystified by American Wagering's action.

"We're a little bit confused ourselves," said John Elliott, Autotote's director of corporate development. "Our position is we have not transferred any software in violation of any agreement with American Wagering."

Autotote lawyer Frank Schreck has told Nevada regulators that an agreement with Agua Caliente to help maintain the software and related equipment used to process bets ends this month.

But while Autotote is trying to get back the property and end dealings with Agua Caliente, the track itself has the equipment and believes it has the right to buy it, Schreck said.

Autotote also wants the state Gaming Control Board to let it withdraw an old bid for a license as a gambling device manufacturer.

But action on that request has been deferred, efffectively keeping pressure on Autotote to end its link with Agua Caliente - or face the prospect of the board going ahead with a licensing hearing certain to focus on Agua Caliente owner Jorge Hank Rhon.

Hank, known as the "gambling king of Northern Mexico," reportedly has ties to the Arellano Felix drug cartel based in Tijuana, according to documents provided to the Control Board.

The documents also recount that two members of Hank's racetrack security staff were convicted of murdering a newspaper columnist in Tijuana.