Commission rejects gaming license applicant using new law

The Nevada Gaming Commission on Thursday rejected a licensing request for an applicant using for the first time an option enabled by a new law.

In a 3-1 vote, commissioners rejected the application of Brian Hinchley as an officer and director for Minnetonka, Minnesota-based Table Trac Inc., a casino systems manufacturer that was licensed in Nevada earlier this year.

Commissioners grilled Hinchley for nearly two hours in a licensing hearing for which the three state Gaming Control Board members had recommended a denial of licensing.

A denial has severe consequences for a gaming license applicant. Denied applicants aren’t allowed to conduct business with any Nevada licensee and regulators in other jurisdictions often pick up on Nevada denials and take similar actions in their own states.

But in June, the Nevada Legislature approved a law giving commissioners a new option when dealing with recommendations of denial. Prior to the passage of Assembly Bill 75 — which was heavily lobbied for approval by Commission Chairman Tony Alamo — the commission could affirm the denial, reverse the Control Board’s recommendation only with a unanimous vote or refer the matter back to the Control Board’s staff.

The rejection of an executive’s licensing request enables the company to continue to operate, but with a high level of scrutiny. The Control Board could revoke a company’s license or fine the company if it’s determined that a rejected applicant is making key decisions for the company.

Regulators were concerned that Hinchley was conducting business in the state prior to being licensed. He was warned by Commissioner John Moran in August 2016 not to communicate with Nevada casinos companies on contracts.

But Control Board investigators discovered emails from Hinchley to prospective customers after the warning.

In a contentious dialogue between Hinchley and his attorney and commissioners, the board was not convinced that Hinchley could be trusted.

In the 3-1 vote, Moran voted against rejection, preferring to accept the Control Board’s recommendation of denial.

Earlier in the meeting, the commission unanimously approved licenses for Novomatic AG, Gumpoldskirchen, Austria, and for it to invest in Ainsworth Game Technology Ltd. of Australia.

Novomatic, with 25,000 employees, has 260,000 machines at 2,100 locations in 45 countries, manufactures slot machines and also provides lottery terminals and sports wagering systems worldwide.

In February, the company announced it was acquiring a controlling interest of 52.2 percent of Ainsworth from founder Len Ainsworth for $473.3 million Australian ($363.3 million U.S.).

Ainsworth opened a new Las Vegas headquarters in 2016.

Commissioners also agreed to manufacturing and distribution licenses for Tokyo-based Sega Sammy Holdings Inc. and Sega Sammy Creation Inc., subsidiaries of the giant Japanese video game company.

Sega officials told commissioners they’ll explore the Nevada market, particularly now that the state has legalized skill-based games. That could open the door to offering pachislo, a video slot machine on which a player can control the stoppage of spinning reels.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.