Galaxy Gaming CEO issues shareholder letter over California licensing

Robert Saucier, chief executive of Las Vegas-based Galaxy Gaming Inc., issued a four-page letter to shareholders on Friday to explain the issues associated with the company surrounding a recent decision by California gaming regulators.

The four-member California Gambling Control Commission on July 11 upheld an administrative law judge’s ruling describing Saucier as unsuitable to do business in California.

“The proceedings did not directly involve Galaxy but rather a predecessor entity that ceased business operation in 2009 and dissolved,” Saucier wrote. “At Galaxy, it is business as usual as we continue to provide our products and services without any interruption.”

Galaxy, which is licensed by individual tribes in California, manufactures table games, including side bets that can be played with such games as blackjack. The company also distributes TableMax, an automated table game that offers blackjack without a live dealer.

Saucier assured shareholders that the company’s gaming license with California tribes is unchanged and in good standing.

“Likewise, our status in all other jurisdictions we serve is also unchanged and remains in good standing,” he wrote. “In fact, we continue to seek and acquire new licenses and approvals in additional jurisdictions.”

Galaxy recently signed a deal to install its games on 61 of approximately 100 tables at Harrah’s Cherokee Casino Resort in Asheville, N.C.

But the company also faces questions over the accuracy of statements made over several years to gaming regulators in Washington state.

The recommendation made in April to the California gaming commission was the result of a three-year investigation of his business license applications.

Saucier was accused of withholding or misstating crucial information to state officials about his past, including his schooling, criminal record, business dealing and lawsuits.

“Saucier was evasive and, in some instances, intentionally dishonest and misleading in his response to questions,” according to Administrative Law Judge Catherine Frink’s April 26 recommendation. “In a highly regulated industry such as gaming, the failure to be forthcoming with relevant information was inexcusable.”

Saucier denied the allegations against him.

He told shareholders that he’s been involved in the ongoing process in California for more than a decade. Saucier said he responded because his “personal credibility is being questioned.”

A gaming commission spokeswoman in Sacramento said the decision means Saucier cannot operate in California as a tribal vendor under the company Galaxy Gaming LLC.

Saucier can request reconsideration only if there is new evidence, she said.

The unanimous decision in California to uphold the ruling prompted the Nevada Gaming Control Board to focus on the need for Galaxy to apply for a Nevada license.

Saucier’s letter didn’t address Nevada gaming regulators’ licensing decision or the “notice of administrative charges and opportunity for an adjunctive proceeding” complaint being considered by the Washington State Gambling Commission over “numerous false and misleading statements in its renewal and other applications” between 200 and 2011.

As of Friday, the commission has scheduled no hearing date. Saucier’s letter also criticized media coverage of his problems in California.

“Not for the first time, however, media reports neither fully explained nor even clearly summarized the California proceedings,” he wrote. “Although we are keenly aware that sensationalism sells, much of this journalism is removed from reality and lacks an obligation to the truth.”

Saucier strongly denied allegations he failed to report details of his personal or business life accurately to California regulators.

He said he does not have a criminal record, nor did he fail to disclose any of his business dealings, or fail to previously report that he paid child support.

Shares of Galaxy Gaming closed up 2 cents, or 8 percent, to 27 cents on Friday. In the past year, they have ranged between 12 and 32 cents per share.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.
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