Gaming Laboratories International, one of two companies that tests and certifies gambling products and technology for casinos worldwide, recently became the first independent testing lab ever disciplined by Nevada gaming authorities.
The company, which is headquartered in New Jersey but has offices in Las Vegas, agreed to pay $125,000 in a stipulated settlement signed in July with the Nevada Gaming Commission. The agreement covered a three-count complaint issued against GLI by the Gaming Control Board over testing and certification that the company performed on a product for Interblock.
In agreeing to settle the complaint, GLI outside legal counsel Dan Reaser, of the Fennemore Craig law firm, told the commission on July 26 in Las Vegas that the company has “evaluated” more than 8,500 projects for Nevada in the last six years, and the incident with Interblock means the company had a .00012 error rate.
“While it is important to understand that we have agreed to the allegations of the complaint, had this matter gone forward, we would have vigorously defended (ourselves), and we believe we may well have prevailed on some of the counts,” Reaser said, according to a transcript from the hearing.
The Gaming Control Board operates its own test lab but relies on GLI and other companies to help certify and test a multitude of gaming products. Gaming Commission member Philip Pro, a former federal judge, said he viewed the settlement differently than other disciplinary actions because of how much the state depends on GLI’s game reviews.
“This is kind of a special category,” Pro said. “I would only observe, at least in my mind, that GLI really needs to be mindful of the scrutiny that they have. From my perspective, I don’t think repeat violations would be very favorably viewed, by me certainly. I can’t speak for others.”
The Control Board charges covered testing of Interblock’s Pulse Arena system, which includes wagering terminals tied to a central system for slot machine and automated table games. The Pulse system is also integrated with a system from International Game Technology. GLI certified the product in December 2016.
However, the Control Board complaint alleged the company issued the approval prior to integrating the system with IGT’s system and did not act independently from Interblock, as evidenced by emails between GLI and Interblock personnel that date from November to December 2016. GLI was also alleged to have provided Interblock with multiple sample reports that they had completed for other licensed manufacturers, in doing so failing to maintain Nevada certification matters as confidential.
Reaser told the commission that GLI wanted to avoid litigation with the Control Board because it would be “anathema to the culture of the company.”
He said GLI paid the settlement two days before the commission hearing because the company wanted to put the matter behind it.
GLI General Counsel Kevin Mullally, who signed the stipulated settlement, briefly told the Gaming Commission the settlement was the best way to resolve the matter.
“We do not litigate with clients,” Mullally said. “The Nevada Gaming Control Board is our client. We take direction and control from them, and we want to do things exactly the way they want it done. Sometimes family disagrees.”
Gaming Commission Member Debrorah Fuetsch told Mullally that even though it was just one error, the complaint “bothered” her. GLI, she said, is brought up in every meeting with new applicants that are bringing games into Nevada. Fuetsch said the settlement allows regulators to have more checks on the testing lab.
“We depend on you,” she said.
Gaming Commission Chairman Tony Alamo Jr. said he was comfortable with the settlement agreement, adding there needs to be a higher scrutiny on testing labs.
“You kind of don’t want to be the first of any settlement agreement, but you are,” Alamo said. “Me, personally, I wouldn’t want to see a second one like this going forward.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
