New gaming chief assumes hot seat

John Porretto

Friday, April 5, 2002 | 9:19 a.m.

JACKSON, Miss. -- If Larry Gregory was looking for a challenge when he took the helm at the Mississippi Gaming Commission, he hit the jackpot.

Gregory, named executive director in December, took over an agency that only a few months earlier was criticized by a legislative watchdog group for not thoroughly enforcing the state's gaming regulations.

To make matters more difficult, Gregory has less money to do his job. The Legislature this week approved a $9.6 million Gaming Commission budget for fiscal 2003, $600,000 less than this year.

In an interview with the Associated Press, Gregory discussed his priorities as director, his prediction for more casinos in Mississippi and what he considers one of the his biggest challenges -- preparing for Internet gambling.

Gregory, 43, has spent most of his career in state government. He worked for the state Personnel Board and Department of Transportation before being recruited to the Gaming Commission in 1996.

The 9-year-old commission, which has about 125 employees, regulates 30 dockside casinos, which last year won $2.7 billion from gamblers.

In July the Joint Legislative Committee on Performance Evaluation and Expenditure Review noted critically that the agency had yet to complete compliance reviews at a dozen casinos. PEER also made nearly 30 recommendations on matters such as vehicle use and gambling machine testing.

Gregory, the agency's deputy director under Chuck Patton before his December promotion, said he's spent the first few months of 2002 working on PEER's recommendations.

He said he submitted an agency reorganization plan to the Personnel Board and asked the state auditor's office to examine the commission's books. A spokesman for State Auditor Phil Bryant said the office did a limited internal control and compliance review in February and gave the commission overall good marks.

The following are excerpts from Gregory's interview with the AP:

Q. Was the PEER report an indication that the agency was being mismanaged?

A. I don't think it was being poorly managed ... This was a review of the last several years. Reacting to an industry that was growing at such a rapid pace, sometimes we just didn't follow every rule and regulation ... set forth in personnel or with the Department of Finance and Administration. Since that time we've realized the importance of being a state agency and working with all the other regulatory agencies.

Q. Do you have enough regulators and investigators to police the state's casinos?

A. I could always use more people. That's common sense. But I recognize the state is experiencing severe budget times. I have to live within those guidelines, and we're OK at this point. But I can't be cut any further. At this time we're able to do a good job where I think the industry is tightly regulated -- not only in enforcement but also in the compliance area, where revenue comes in.

Q. What are the biggest challenges you face regulating the industry?

A. The biggest challenge -- and I'm trying to get the word on the street -- is Internet gambling. That's going to be one of the biggest issues that hits this industry since gambling came to this state or Nevada. I can't tell you the problems we're looking at. Several years ago, at all the gaming regulatory conferences, the agencies from Nevada to New Jersey said, 'No, no, no, we're not going to deal with Internet gambling.' That's kind of turned around. The Nevada Gaming Control Board is looking at the possibility of regulating that industry. Their Legislature mandated they draw up rules and regulations. New Jersey is looking at that possibility now. You could imagine some of the issues facing us -- taxation, interstate commerce, who receives the money, who is actually playing. It makes it very difficult.

Q. What's your first step?

A. We're trying to be proactive because I think in a relatively short time it will be here ... I think the Legislature, our commission, everyone is (against) Internet gambling in this state. That's basically our stance. I have a team of people -- from our legal people to our computer people to our engineers -- looking at everything dealing with Internet gambling, trying to tear it apart to see what kind of approach we're going to take. We have to face the fact that most of the companies that are interested in it are doing business in the state. All those companies are basically on the water's edge. They're afraid if they're not out of the chute when this thing comes, they're going to lose significant profits. On the other hand, they don't want to jump in the water and drown because no one is quite sure what Internet gambling is going to bring.

Q. What type of growth do you see in the industry at home in the next three to five years?

A. I don't see any closings in the foreseeable future. I think all the casinos are relatively healthy right now. If any closings were to take place, it would probably be some type of a merger ... As far as growth, I don't think we've reached the saturation point, but there's not going to be the type of significant growth we've witnessed over the past four or five years. I'm always talking to people. People come in and show me blue prints who are interested primarily in the coast and Tunica ... I think we're going to see several opening up over the next year or two on the coast or in Tunica.