Judge Rules Casino Machines Were Wrongly Classified

Wednesday, December 5th 2007, 9:43 am
By: News On 6

OKLAHOMA CITY (AP) _ An Oklahoma County judge has ruled that two popular models of gaming machines have been wrongly classified, which could mean the state has not received money it was due since compacts between American Indian tribes and the state took effect in 2005.

How much the state might have lost is not known because a protective order that is part of the lawsuit keeps confidential information about the total number of gaming machines involved in the suit. It also is not known if any money the state lost can be recouped.

The ruling by District Judge Noma Gurich stems from a suit between two vendors of Class II games, which are based on bingo. Diamond Games, which has few machines in Oklahoma, sued Multimedia Games, which historically has been Oklahoma's largest Class II vendor.

Gurich ruled that the gaming machine models, MegaNanza and Reel Time Bingo, fit the definition of Class III games. Under the compacts, the state derives no income from Class II games, but it generally receives 6% of the amount left in each Class III machine after winnings have been paid.

Class III machines are similar to Las Vegas-style slot machines. About half of the machines in Oklahoma casinos are Class III machines.

According to industry experts, an average gambling machine makes about $175 a day.

Gurich said her order is not binding on tribal governments and that the ruling should not be interpreted as trying to regulate Indian gaming.

But the ruling is at the center of a dispute between tribes, casino vendors and federal gambling regulators. While the National Indian Gaming Commission has tried for years to establish rules about the difference between Class II and Class III games, vendors and tribes have lobbied against any changes.

State Finance Director Tony Hutchison said Gurich's ruling likely has no bearing on the state. He said the ruling does not provide the Office of State Finance with the authority to take compliance action.

``We would need additional information and perhaps a ruling from the federal government to take any compliance action regarding this issue,'' Hutchison said.

Diamond Games President Jim Breslo said Hutchison's reaction surprised him.

``I would be surprised if the state would not at least look into the issue if this ruling is affirmed on appeal. Certainly millions of dollars are at stake,'' Breslo said.