LAS VEGAS -- Nevada gaming commissioners approved a $1 million fine against the Seeno family's Nevada casino operations Thursday, after the Peppermill chain admitted to ordering an employee to steal proprietary data from rivals through a slot machine spying scam.
The Nevada Gaming Commission voted 3-0 to approve the steep fine, which Peppermill's ownership agreed to pay last week. One commissioner recused himself from the vote and another abstained, according to Karl Bennison with the regulatory agency.
Peppermill President William Paganetti read a brief statement at the Las Vegas hearing, apologizing for the casino's action, according to the Las Vegas Review-Journal.
"I'm sorry for the embarrassment this has caused," Paganetti said. "It was inappropriate of the Peppermill to be involved in this type of action."
Members of the powerful Seeno family, who own stakes in seven Nevada casinos, own 15 percent pieces of each casino, adding up to majority control of the individual properties. However, Paganetti, who is also a co-owner, runs the casinos. The Seenos were not named in the complaint or in a related lawsuit against Peppermill by a rival casino. Grand Resort Resort has accused the Peppermill of stealing competitive secrets by ordering an employee to use a slot machine key to capture proprietary data, such as the percentage of players who will win money at machines.
In the settlement, the Peppermill -- which runs the second largest casino in Reno -- acknowledges Ryan Tors, its director of slots, has stolen such information since 2011 from at least 10 rival casinos, at the request of Peppermill management. The employee still works for the casino chain but is on paid leave, according to attorney Frank Schreck, who was representing Peppermill ownership. He stressed Tors did not commit a crime, according to the Las Vegas newspaper.
"I'm not trying to make excuses of the seriousness of the action," Schreck said. "It was abject stupidity on their part. This wasn't a crime, but it was felony stupid."
The attorney added that the information was not used for a "competitive advantage," according to the Review-Journal. "It was to satisfy curiosity," Schreck told commissioners.
Paganetti told commissioners he apologized to other Nevada casino owners, the paper reported.
Meanwhile, Gaming Control Board Chairman A.G. Burnett told the trustees the significant fine was "high enough to send a message," but not intended to "financially harm or bankrupt the Peppermill," the Review-Journal reported.
A spokesman for the Seenos, who have had a previous brush with gaming regulators, 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 spokesman for the family, in an earlier statement. "This is an issue involving those that have managed the Peppermill casinos before and during the Seenos' ownership. The Seenos' only understanding is that management did not believe they were engaged in inappropriate conduct. The Seenos have since been advised that the conduct did not violate any criminal laws but did violate certain gaming regulations which resulted in the complaint and settlement."
The Review-Journal reported that the Washoe County District Attorney declined to prosecute the casino or Tors.
Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.