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HOME > NEWS > Investor News > Peppermill Casino owners agree to $1 million fine over use of slot machine "reset" key

Peppermill Casino owners agree to $1 million fine over use of slot machine "reset" key

14 February 2014

By Howard Stutz

Owners of the Peppermill Resort Spa Casino Reno agreed to pay a $1 million fine to state gaming regulators after an employee was caught using a common slot machine “reset” key on games operated by competing Northern Nevada casinos to steal proprietary information.

According to a stipulated settlement filed Thursday, Peppermill management condoned the employee’s activities and encouraged him to gather the information.

A three-count complaint against the Peppermill was filed at the same time as the agreement. The Nevada State Gaming Control Board Gaming Commission is expected to rule on the matter when it meets next week in Las Vegas.

The Peppermill is privately owned by a multiple family partnership and is one of Reno’s largest casinos. The property has 1,600 hotel rooms, an 80,000-square-foot casino, 106,000 square feet of convention space and 10 restaurants.

In the complaint, the Control Board said the Peppermill was operating in “an unsuitable manner” when Ryan Tors, a corporate analyst for the casino, was caught in July using a reset key on several slot machines at the Grand Sierra.

By using the key, the Peppermill employee was able to learn certain diagnostic information about the slot machine, such as play history, hold percentages, event logs and game configuration.

During the investigation, the board found that Tors gathered information on slot machines at the Grand Sierra and at 10 other Northern Nevada casinos, including the Eldorado, Circus Circus Reno, Siena, Atlantis, Rail City in Sparks, and two casinos in Wendover.

According to the complaint, Tors had been gathering the information since 2011.

The investigation revealed that Peppermill management approved and directed Tors to obtain the theoretical hold percentage information from the competition’s slot machines using the “reset” key.

Board members said the Peppermill’s actions “constitute a failure … to exercise discretion and sound judgment to prevent incidents which might reflect on the repute of the state of Nevada and act as a detriment to the development of the industry.”

Peppermill President William Paganetti signed off on the settlement.

The fine, if approved, would be the second seven-figure penalty handed down in less that month by the agency. In January, CG Technologies, formerly Cantor Gaming, agreed to pay a record $5.5 million fine after a former company executive was caught accepting illegal wagers.

Jim Barbee, chief of the Control Board’s technology division, said the key — known in the industry as a 2341 key — is a common tool used by slot machine technicians to gather information or reset a game following verification of large jackpot. Most keys are generic and work on slot machines of all manufacturers.

Using the key doesn’t allow access to a slot’s inner workings and won’t change the outcome of a game.

“The key gives the technician access the device’s program information,” Barbee said. “The key allows you to read that information. It’s a generic key in the industry.”

It’s also an item available to the public, but not through normal channels. A check on eBay.com found more than a dozen listings for a “slot machine reset key” or a “2341 key” for several manufacturers, including International Game Technology, Bally Technologies and WMS Industries. Prices ranged from $2.99 for a single key to nearly $100 for 72 keys.


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Howard Stutz
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