Board recommends approval for diamond slot developer

Thursday, Oct. 4, 2001 | 9:01 a.m.

CARSON CITY -- The state Gaming Control Board on Wednesday recommended approval for a permanent license for a company that has developed a slot machine that gives diamonds as payouts.

Sierra Design Group, with offices in Las Vegas and Reno, has held a two-year limited license that expires this month but is now headed for a permanent permit.

Robert A. Luciano Jr. president of the company, said his machine -- "Raining Diamonds" -- has been on trial at the Rio. He said, "It has out-performed every game on the floor. There is high reception."

The nickel slot pays off in coins in the smaller wins but gives out diamond rings, bracelets and necklaces for the bigger prizes. "The biggest mover last month was men's rings," Luciano said.

When a player wins one of these prizes, an attendant comes over to unlock the compartment on the machine and award the customer with the diamond that is encased in a sealed container.

The customer is not permitted to trade the diamond for cash, but he can exchange it for other merchandise, said Luciano.

The same company that makes the diamonds for Tiffany's in New York produces the diamond prizes for this slot machine. Luciano detailed the security in handling the diamonds and said the quality of the merchandise is certified.

The diamond prizes are valued at below $1,200 so as not to require reporting to the Internal Revenue Service. The slot machine also dispenses 50,000 coins on one of its jackpots.

Board member Bobby Siller told Luciano that, "Your creativity and your ability to think outside the box has given you a competitive edge."

Board Chairman Dennis Neilander asked Luciano whether the casino liked the idea of slowing slot play while an attendant unlocks the machine to get the prize. Luciano said the players like the attention given them.

Sierra Design operates 6,000 video lottery machines in the state of Washington at Indian reservations and has a working relationship with the Indian tribe at Barona in California.

The company has grown from a handful of employees to 106 workers in the past two years, and its revenue has increased by 700 percent, said its lawyer Dan Reaser.

The state Gaming Commission meets Oct. 18 in Carson City to give final approval. The board also recommended approval for Paul Rubeli as president, chief executive officer and chairman of the board of Aztar Corp., which has six casinos, including the Tropicana in Las Vegas and the Ramada Express Hotel and Casino in Laughlin.

The board asked Rubeli how business was in Las Vegas during this national economic downturn. "Things are picking up," he said. "We had a good week."

The rooms at the Tropicana were sold out Friday and Saturday, although the room rates were lower, he said.

He said there were some cancellations, including two large conventions, shortly after the terrorist attacks Sept. 11. "There have been no major long-term cancellations, and that is good news," Rubeli told the board.

The company, he said is "exploring redevelopment" at the Tropicana, where parts of the building are 44 years old. The location at Las Vegas Boulevard South and Tropicana is "one of the most attractive sites in the industry."

But he said the company does not want to get into a situation experienced by some other firms that built large hotels but didn't realize the profits they expected.

The board also gave preliminary approval for a permanent license to Mountaineer Park, Inc., to continue its gaming operation at the Ramada Inn and Speedway Casino in North Las Vegas.

Mountaineer, which operates a race track in West Virginia, had a two- year temporary license. Company officials were questioned about problems in supplying gaming agents with the names of lobbyists and consultants it contracted.

Neilander said investigators for the board would be keeping a close eye on the company, which operates out of Chester, W.Va.

The board also recommended approval for the Casablanca Oasis in Mesquite to conduct off-track pari-mutuel race watering; Michael Luzich as a member-manager of Cambridge Gaming of Nevada in Las Vegas and Atlantic City Coin and Slot Service Company of Atlantic City to place restrictions on the transfer of equity securities.