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Jersey regulators still cleaning house

Jan 29, 2008 6:01 AM

These are not the best of times at New Jersey’s Division of Gaming Enforcement. A senior employee in the DGE’s slot lab has been fired — "escorted from the building" — is the way one source put it. The agency has been plagued by image-related issues that suggest some employees have been marching to the beat of a drummer only they can hear.

Three separate sources confirmed that the unnamed slot lab official (unnamed because I could not reach him for comment) was escorted from the DGE office complex in Atlantic City "within the last couple weeks" because he accepted financial assistance from what was described as a "licensed manufacturer" in making arrangements for what was variously described as a "piano recital" or "party" for one of his children. 

Not exactly what many people would consider big time corruption, particularly since the individual involved appeared to enjoy a "straight arrow" reputation.

But a top Atlantic City gaming executive was quick to disagree. "This IS a big deal because getting games through the lab in a timely fashion has always been an  important issue and anything that suggests one company might have a leg up on the competition can be counted on to not go over well."

What this story also suggests is that Gov. Jon Corzine has adopted a zero tolerance approach to people found on the wrong side of rules about how DGE employees should conduct themselves.

Attorney General Anne Milgram, a former federal prosecutor, recently cracked down on moonlighting activity by DGE agents after it was disclosed in this column that agency personnel working for a private research company helped produce reports on worldwide gaming activity. Information in some of those reports fell into the hands of private sector interests competing with MGM in Singapore and opposed to MGM Mirage’s Macau partnership with Pansy Ho.

This occurred as the DGE continues its probe aimed at determining whether Pansy  (because she is her controversial father’s daughter) is a suitable partner for a New Jersey licensee. The investigation is two or three years old now and unofficial sources say the report will be complete in 30-60 days.

Some would wonder how much any of it matters now since it is clear MGM has no interest in abandoning the Macau partnership that opened its casino last month. There is even talk of more Macau projects to come involving the same partnership.

Meanwhile, back at the Division, DGE is on its way to having its third director in less than a year. Milgram has taken steps to further limit freelancing by Division Agents following disclosures that suggested evidence of possible conflicts.

Corzine has named Assistant AG Josh Lichtblau as the Division’s newest acting director. He replaces former acting director Yvonne Maher who stepped in last spring when the former DGE director took a top job with Penn National. Maher hoped to get the permanent job.

Late last month the Casino Control Commission that rules on recommendations made by the DGE decided Maher did not go far enough in recommending a heavily conditioned license for the owner of the Atlantic City Tropicana. The Commission yanked the Trop’s license and ordered it sold. 

That process is now slowly winding its way forward.

Future of Vegas Trop in limbo

The Nevada Gaming Control Board remains about 30 days away from deciding how it will respond to the challenge created by Tropicana owner Columbia Sussex losing its license in New Jersey.

Nevada agents have recently spent time in New Jersey going over the record created during the several days of testimony that suggested operators of the company’s Tropicana in Atlantic City had misled the state agency.

There is no current sign that Sussex expects to sell its Las Vegas Tropicana to make a more attractive buy for whoever ends up with the Atlantic City Trop. But that could change even though Sussex’s Las Vegas attorney Jeff Silver has a solid reputation for steering his clients through dangerous waters.

The matter would be taken out of the company’s hands if Nevada regulators also decide to yank the license. That kind of action has no modern precedent in Nevada. The state booted owners of the Aladdin and Stardust out of the industry in 1979 and 1983, respectively, but those actions were precipitated by evidence of illegal hidden influence.

Simple incompetence is another matter

Sussex is not the first Nevada company to get little respect as an operator, but state officials have usually been content to let such operators sink themselves by filing for bankruptcy.