Nevada, Illinois differ on slot problem

Friday, July 26, 2002 | 10:56 a.m.

The discovery of an obscure flaw involving IGT and Bally slot machines led to two very different reactions by gambling regulators in Nevada and Illinois.

At issue is how the machines dispense jackpots. An independent lab test conducted for Illinois regulators within the past two months found that certain machines made by International Game Technology and Bally Gaming and Systems could potentially fail to lock up when they hit a jackpot, according to a spokesman for the Illinois Gaming Board.

That could create a scenario in which players could continue to play or would leave the game, thinking they hadn't won anything, spokesman Gene O'Shea said.

It was not clear today whether the problem is with individual slot machines or with system software that links several machines together, which could similarly affect machines from different manufacturers.

Reno-based IGT, the world's largest slot maker, confirmed the problem but said the possibility of a malfunction -- which it said never occurred with any of its machines -- was remote.

A malfunction still wouldn't prevent the player from hitting a jackpot in the first place, and the game would still show the player had won, said Ed Rogich, vice president of marketing for IGT. The problem only affects "progressive" machines that collect wagers from several machines into a single jackpot, machines that are likely not in use in Illinois, Rogich said.

A representative for Bally Gaming and Systems, a division of Las Vegas-based Alliance Gaming Corp., could not be reached for comment.

Nevada regulators have not ordered repairs to the machines and continue to study the problem. Rogich said IGT notified Nevada casinos of the issue but is not fixing any Nevada slots while it awaits direction from the state Gaming Control Board.

Nevada regulators said they initially determined that the problem with IGT machines was minor, in part because it didn't skew the outcome of the games themselves. The state Gaming Control Board has received copies of notifications IGT sent to its casino customers, informing customers how to fix the machines by setting them up in a certain manner before play. Details on Bally machines were not available.

Illinois regulators took a different approach. Last month, the Illinois Gaming Board, required the slot makers to replace the flawed computer chips responsible for configuring the games. The companies failed to meet a 30-day deadline Monday, prompting the state to shut down nearly 600 games in question -- about 6 percent of the slots in that state.

Gaming equipment makers typically self report any potential problems or changes with their machines to regulators in every state where the devices are located.

It's not unusual for glitches to show up after the games have been approved by regulators, IGT's Rogich said. While serious problems will result in pulling the machines, more remote programming issues -- which have little potential to affect players and can be solved by showing casino operators how to fix them -- may not warrant regulatory action.

Machines that pass muster with regulators in one state can't automatically be approved everywhere else, though the information requested from manufacturers is often the same, said Bill Eadington, an economics professor and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

"Boards in different jurisdictions want to preserve their autonomy," Eadington said. "In an efficiency sense ... there's an argument to be made for a single standard."

Differences in how states handle the same investigation can become politically embarrassing, he said, especially if one state is accused of overreacting to an issue while another is accused of underreacting.

In the end, effective regulators must balance potential consumer risks against a host of other factors, such as the cost of pulling the machines, the disruption to the manufacturers and the potential loss of state tax revenues, he added.

"It's a tradeoff. You could present the same issue and regulators could each come up with different decisions."

The Illinois Gaming Board had no proof that any of the machines in question malfunctioned. Still, regulators are mandated to protect the integrity of the gaming industry, O'Shea said. The state gave the companies a 30-day deadline to fix the problem because it wasn't serious enough to warrant more drastic action, he added.

Last year, Illinois regulators immediately shut down more than 1,600 WMS slot machines when they discovered players could receive free credits by jamming bill acceptor mechanisms.

Rogich declined to comment on the differences in regulatory oversight between the two states. IGT's reputation requires that it comply with whatever regulators decide, he said. "Even if it's the remotest possibility (of a problem), we will deal with it."

"We have to make sure the games are fair to the player, as designed."

IGT makes thousands of regulatory submissions each year to license slot machine computer chips worldwide. The company's products are licensed in more than 200 jurisdictions.