The Nevada Gaming Commission has signed off on a settlement deal in which Reno’s Peppermill Casino will pay a million fine in connection with a complaint filed by rival Reno property Grand Sierra concerning corporate espionage.
The case involved Peppermill corporate analyst Ryan Tors, who, according to the settlement, used a common slot reset key to access slots at the Grand Sierra, gathering diagnostic information such as play history, hold percentages, event logs and game configurations.
After the Grand Sierra’s complaint, the gaming commission’s investigation found that Tors gathered information on slots at 10 other Northern Nevada casinos as well, including major properties such as the Eldorado, Atlantis, Circus Circus Reno, the Siena and Rail City, and that he had been doing so with the knowledge and consent of Peppermill management.
The Washoe County District Attorney declined to prosecute the casino or Tors, saying the action did not constitute a crime. Peppermill attorney Frank Schreck told the commission that the casino’s executives realize the serious nature of the charges. ““I’m not trying to make excuses of the seriousness of the action,” Schreck said at the hearing on the settlement. “It was abject stupidity on their part. This wasn’t a crime, but it was felony stupid.”
Scheck also told the commissioners that the information was never used to gain a competitive advantage, saying the effort was meant to “satisfy curiosity” on the slot policies of other area casinos.
Peppermill President William Paganetti also appeared at the settlement hearing, apologizing for the casino’s action. “I’m sorry for the embarrassment this has caused,” Paganetti said. “It was inappropriate of the Peppermill to be involved in in this type of action.”
The commission voted 3-0 to accept the settlement, with one abstention.
Tors has been placed on administrative leave with pay by Peppermill since the investigation began last summer. Since he was not a licensed employee of the Peppermill, he is not subject to disciplinary action by the Gaming Control Board.