Peppermill Casino in Reno Fined $1 Million for Regulatory Snafus

Posted on: February 16, 2014, 05:30h. 

Last updated on: April 7, 2014, 03:59h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

The Nevada Gaming Commission (NGC) is discovering what the U.S. Department of Justice has known for a while now: huge regulatory misdeeds mean big bucks for the oversight agencies in question. In the outfit’s second seven-figure punitive action in just the past few weeks, the NGC will be getting a cool million bucks from Reno, Nevada’s Peppermill Casino for encouraging an employee in gathering competitor information illegally by using a well-known “slot key” code.

Following a January indictment by the NGC for CG Technologies to the tune of $5.5 million when a former executive was charged with accepting illegal bets during his tenure with the company (formerly known as Cantor Gaming), it’s looking like the NGC Christmas party will  be really, really nice this year.

Second-Biggest Regulatory Fine This Year

If it gets final approval status, the Peppermill’s owners will be forking over $1 million to the NGC, after one of the company’s employees was intercepted using a well-known slot machine reset key on various competing Northern Nevada casino games, allegedly with the goal of stealing proprietary information.

The settlement agreement – filed late last week – says that Peppermill’s upper management encouraged and approved of Ryan Tors’ actions in using the reset key on several Grand Sierra slot machines. Tors is a corporate analyst for the Peppermill. The three-count complaint was filed in tandem with the settlement agreement, and the NGC says they will make a final decision on the issue this coming week in Las Vegas.

The NGC complaint notes that Tors and his employer were operating in “an unsuitable manner” by having Tors use a reset key on the Grand Sierra slots.

Although caught this past July, the actions were allegedly ongoing since 2011. The  reset key allowed Tors to discern diagnostics about various slot machines – including their play history, hold percentages, event logs and even the games’ configurations.

Besides the Grand Sierra, the investigation uncovered another 10 Northern Nevada casinos in which Tors allegedly gathered similar types of info on slots. The targeted casinos included Circus Circus Reno and Atlantis, among many others; besides Reno, the properties were in Sparks and Wendover, Nevada.

The NGC Board noted that the actions of Thor with the backing of Peppermill executives –  “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.”

2341 Reset Key

NGC technology division chief Jim Barbee explained that the industry reset key known as “2341” is frequently used by all slot techs as a way to reset a game once a large jackpot has been hit and verified, as well as to gather in-house information on slot machine stats. As the keys are generic and universal to all manufacturers, they can be easily accessed by anyone who knows the codes.

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

Barbee did emphasize that the reset key cannot affect a game’s outcome, nor does it allow the user to see the inner machinations of a slot device.

Perhaps even more alarming is the reality that anyone can apparently get these reset keys simply by going on sites like eBay. More than a dozen listings show 2341 key codes for major manufacturers like IGT and Bally Technologies, ranging in price from just $2.99 for one key code all the way up to $100 for 72 different key codes.

The 1,600-room, 800,000-square-foot Peppermill Casino is one of Reno’s largest, with an additional 106,000 square feet of convention space and 10 eateries. The casino is privately owned; president William Paganetti has officially signed off on the settlement.