WMS looks to rebuild in wake of slot woes

Friday, Feb. 22, 2002 | 10:54 a.m.

CARSON CITY -- A major slot machine manufacturer told Nevada gaming regulators Thursday it is "rebuilding the company" after the discovery that its machines were easy targets for some slot cheaters.

Brian R. Gamache, president and chief executive officer of WMS Gaming, told the Nevada Gaming Commission that efforts are being made "to stabilize the (software) system" that runs the Chicago company's slots.

Due to an "abnormality" in the software, the machines could potentially be manipulated by patrons. Preventing that required a change of software on 60,000 WMS machines. But that "opened another faucet that needed fixing," Gamache said.

WMS went through a tremendous growth spurt in which it increased its share of the market from zero to 16 percent, Gamache said. And the machines that were developed "didn't deal with today's technology.

"We made our name getting great games. Now we must balance the technology."

The company "didn't have the infrastructure -- it didn't have the proper documentation in software," he said.

WMS was fined $100,000 by the Michigan Gaming Control Board for not reporting the problem to authorities. "The issue was informing authorities," Gamache said.

The company operated in 157 jurisdictions and was not able to promptly notify each of them of problems. Since then, he said, additional staff has been hired to ensure prompt notification.

Dennis Neilander, chairman of the state Gaming Control Board, said after the meeting that regulators here required WMS to retrofit the machines to prevent the possibility of cheating.

Gamache also apologized to the commission and the board for failing to list a drunken driving arrest in Atlanta on his application. He had disclosed the arrest to regulators in another state previously, but he failed to include it on his Nevada application.

It was an oversight, he said. He noted that he brought the arrest to the attention of Nevada investigators during interviews.

"There is no way I hid the incident," he said. But gaming officials said Gamache should have amended his application to reflect the arrest and disposition of the case.

Despite this, the commission voted unanimously to award Gamache a license.

The commission also agreed to send the application of Innovative Gaming Corp. of America back to the board for further investigation.

David Arrajj, attorney for Innovative of Las Vegas, told the commission that the Securities and Exchange Commission wanted further information on the merger with GET, an Australian company. And there have been some changes in the financing, he said.

Arrajj said the board should have a chance to review the new details.

GET would infuse $5 million into the company and receive 49 percent.

The board earlier this month recommended approval for the Las Vegas slot machine manufacturing company to issue 13 million share of common stock. There was testimony that Innovative Gaming was on the verge of folding without the ability to issue this stock.

The commission did approve the application of Thomas Foley to be chairman of the board and chief executive officer of Innovative Gaming.

Other non-restricted applications approved from Southern Nevada included:

Mark L. Yoseloff, licensed as chairman and chief executive of Shuffle Master Inc. of Las Vegas.

Scott Nielson's sale of his 25 percent stake in the Wildfire Casino in North Las Vegas to brothers John and James Bauchman, who now own 100 percent of the Rancho Road casino. Nielson is an executive vice president and general counsel of Station Casinos Inc.