Seeno family casino chain fined $1 million over slot machine shenanigans By Matthias Gafni Contra Costa Times

Posted: 02/19/2014 04:50:30 PM PST1 Updated: 02/19/2014 07:38:49 PM PST The Seeno family's Nevada casino operations have agreed to pay a $1 million fine , admitting that since 2011 their director of slots used a slot machine key to o btain important competitive data from 10 rival casinos, according to a tentative settlement reached last week by the East Bay developer's company and gaming reg ulators. For at least two years, Ryan Tors, a Peppermill Casinos Inc. executive, had been going into competing casinos as part of his job for that casino chain, opening slot machines with an unauthorized key and capturing the diagnostic and payback percentages, according to the proposed settlement filed Feb. 13 -- the same day the Nevada Gaming Control Board filed a three-count complaint against the compan y co-owned by the Seenos. In a separate lawsuit, Grand Sierra Resort, a Peppermill rival, sued the Seenos' chain and got a judge to ban Tors from entering any of its properties. Tors has not been criminally charged, according to Reno police, but he is named in the l awsuit, in which the Grand Sierra Resort claims the Reno casino used the proprie tary information to gain a competitive advantage. On Thursday, the Nevada Gaming Commission will vote on whether to accept the fin e settlement. The agreement specifies that there is no evidence Peppermill used rivals' slot machine data to its own advantage, but if any new information arise s, it can issue further punishments. A Seeno spokesman distanced the family from the fine. "The Seenos were not involved in the incident and have not been involved in the negotiations with the Nevada regulators resolving the matter. The settlement was negotiated and entered into by Peppermill management," said Sam Singer, a spoke sman for the family. "This is an issue involving those that have managed the Pep permill casinos before and during the Seenos' ownership. The Seenos' only unders tanding is that management did not believe they were engaged in inappropriate co nduct. The Seenos have since been advised that the conduct did not violate any c riminal laws but did violate certain gaming regulations which resulted in the co mplaint and settlement." The settlement and lawsuit are the latest legal twists for the powerful Contra C osta County family, who own stakes in seven Nevada casinos in Las Vegas, Reno, W endover, Henderson and Sparks. William Paganetti Jr. is the president and co-own er of the Peppermill chain; however, various Seeno family members own 15 percent pieces of each casino, adding up to majority control of the individual properti es. Neither the lawsuit nor the settlement mention the Seenos by name, referring onl y to Tors' affiliation with "management." "The Board's investigation revealed that Peppermill Casinos' management knew of, approved of, and directed Mr. Tors' conduct of obtaining theoretical hold perce ntage information from the slot machines of other casinos using a 'reset' key," according to the settlement, which was signed by Paganetti. The Peppermill Casinos released its own statement: "This is certainly a regretta

ble situation and the Peppermill apologizes for the obvious lack of judgment on the part of its executive staff. The Peppermill has never been subject to regula tory action in all of its 43 years and does not intend on being subject to censu re again." It would not be the Seenos' first run-in with gambling regulators. In 2002, the gaming board fined Albert Seeno Jr. $775,000 for various character issues, inclu ding destroying red-legged frog habitat in a Pittsburg housing development and b ecause family members were consorting with what the gaming board considered "uns avory" characters, such as felons and Hells Angels associates. The slot machine spying allegations came to light after Grand Sierra Resort file d a lawsuit Aug. 2, 2013, in Washoe County court, asking for more than $30,000 i n damages for the theft of trade secrets. On Nov. 15, Washoe County Judge Patric k Flanagan granted the restraining order against Tors. According to the lawsuit, on July 12, Tors entered Grand Sierra Resort, used a k ey to open up six slot machines and accessed the "confidential and proprietary i nformation contained within the machines, including each machine's diagnostic sc reens and payback percentages." Security agents spotted Tors and detained him, according to the documents. Tors said the slot probing was "part of his employment duties" and he would "visit ot her gaming establishments to obtain information concerning the marketing strateg ies of those casinos," according to the lawsuit. A Grand Sierra Resort attorney and Tors' attorney declined to comment. The settlement states Tors used the key to access slot machines in at least 10 c asinos from Reno to Wendover to Sun Valley and Sparks. A gambling expert said a slot machine can provide a competitor with a wealth of information, including how often machines pay off players, how often they are pl ayed and how much is paid out. "It definitely makes it unfair if one person knows what the competition has," sa id professor David G. Schwartz, director of the Center for Gaming Research at Un iversity of Nevada in Las Vegas. "The payback rate, for a lot of casinos, especi ally in Reno, is something they promote." The gambling historian said he has never heard of such a scheme and called the f ine "significant."