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Galaxy Gaming, a Las Vegas manufacturer of casino table games, has been deemed unsuitable to do business in California by a judge, a recommendation that could call into question the company’s Nevada gaming license.
The recommendation, made last month to the California Gaming Control Commission, stems from a three-year investigation of business license applications by Galaxy Gaming CEO Robert Saucier, according to documents obtained by VEGAS INC.
“Saucier was evasive and, in some instances, intentionally dishonest and misleading in his responses 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.”
Galaxy manufactures table games, including side bets that can be played with common games such as blackjack. The company’s titles include Player’s Edge, Emperor’s Challenge, Deuces Wild and Texas Shootout. Its side bet offerings include Bonus Craps, Bust Bonus and Lucky 8.
The company also developed TableMAX, an automated table game that offers blackjack without a live dealer.
Saucier is accused of withholding or misstating important information to state officials about his past, including his schooling, criminal record, business ventures and involvement in lawsuits.
He also allegedly inked licensing deals with several California Indian tribal casinos — collecting as much as $2,000 a month from each in licensing fees — without state approval.
Saucier denied the accusations against him.
“We strongly believe that the allegations cited in the report are inaccurate, immaterial and do not apply to us,” Saucier said in an emailed statement to VEGAS INC. “We remain confident that after the California Gaming Control Commission examines all of the facts, including our unblemished track record of performance and compliance, we will be granted a finding of suitability as we have been in over 100 gaming jurisdictions. This is still very much an ongoing matter that will ultimately result in our favor.”
The California Gaming Commission is scheduled to consider Frink’s recommendation July 11. If the Commission accepts it, Saucier could be forced to withdraw his products from casinos in California.
The decision also could affect his standing in Nevada.
“We’d look at that and find whether there’s an issue related to the company in Nevada in terms of integrity or suitability,” Nevada State Gaming Control Board Chairman A.G. Burnett said. “If the denial in the other jurisdiction means the same thing as a denial here, we certainly have the ability to take action against that company in one form or another, depending on what the denial is.”
Saucier came into the focus of California officials in 2002, when he applied for a gaming license with the Tule River Tribe Gaming Commission to provide games for the Indian casino. Tule River investigators reviewed the application, then asked for help from the Bureau of Gaming Control, a branch of the Attorney General’s Office.
A state investigator discovered inaccuracies in Saucier’s application, according to Frink’s report.
“There are a lot of reasons that this guy should not be licensed to do business anywhere in California,” the investigator wrote on a fax cover sheet detailed in the report.
Tule River officials denied Galaxy’s license.
“After reviewing the investigative findings and considering the applicant’s prior activities, criminal records, reputation, habits and associates, the Gaming Commission has come to the decision that your application should be denied,” regulators wrote in a Dec. 13, 2002 letter included in Frink’s report.
Among the concerns regulators had, according to Frink’s report, Saucier:
• Failed to mention that he was ordered to pay a $1.5 million judgment to Sherron Associates, a creditor in a hotel-casino project.
• Did not reveal gambling taxes his Mars Hotel and Casino owed to the city of Spokane, where it was located. Saucier developed the property and named it after a Grateful Dead album. It ultimately failed.
• Claimed that a past drunk driving charge had been dismissed, when in fact he had been convicted of a misdemeanor.
• Failed to list a valid address. He filed his personal federal income tax returns in Washington, listed a condominium in Mexico as his home and had a license for a home-based business in Las Vegas.
• Failed to disclose multiple businesses: Galaxy Gaming of Nevada, LLC; Galaxy Gaming of Oregon, LLC; Bonus Blackjack, LLC; Intergalactic; and others.
• Failed to mention gaming licenses from other states, including Washington and Nevada.
• Did not reveal that he pays child support.
• Did not disclose his involvement in past lawsuits. For instance, he sued the Mars Hotel for $1.6 million in 1998. “In essence, he sued himself and received a default judgment,” Frink wrote.
• Failed to mention a foreclosed house and two personal credit card bills that were sent to collections.
• Had no Nevada business license, as required, from 2001 to 2004. He blamed the missing license on an “oversight by staff.”
• Claimed to have graduated from UNR, but he did not.
“The evidence, taken as a whole, painted a portrait of a man who believed that the rules that applied to others did not apply to him,” Frink wrote.
During the first half of 2002, Saucier licensed gaming equipment in eight California casinos. It is unclear whether those license agreements still are valid.
It’s also unclear how many licenses and contracts Galaxy has in Nevada. Saucier declined to share that information.
In addition to being nixed by the Tule River Tribe, Saucier was denied a license from the Colusa Indian Gaming Commission. Officials said Galaxy did “not meet the minimum standards or requirements for issuance of a license,” according to Frink’s report.
The California Bureau of Gaming Control investigated Saucier in 2002 and 2003. Agents traveled to Spokane, Wash., and Las Vegas to conduct interviews and study court records.
In December 2005, investigators sent a letter to the California Gaming Control Commission recommending that the commission deem Saucier unsuitable to operate in California as a gaming supplier.
The case was assigned to the Attorney General’s Office in 2007 for prosecution. It still is pending. The lawyer in charge, Deputy Attorney General William Williams, Jr., was not available for comment.
The judge’s examination also looked into Saucier’s history in Washington, where he operated the Mars Hotel and Casino. He eventually left Spokane, causing some officials to suggest he skipped town, according to media reports.
“Saucier’s problems can be traced back to his activities in the gaming industry in Washington,” Frink wrote.
Saucier has been mired in lawsuits against creditors of the Mars since the early 2000s.
The casino-hotel went bankrupt in 1997 and later closed. In 1999, it burned down. Fire investigators later called it arson; no suspects have been identified. The property was uninsured.
Creditor Sherron Associates, of Bellevue, Wash., charged that Saucier failed to pay an $825,000 judgment for a defaulted loan for the Mars. The judgment grew into a $1.6 million claim by 2008 because of interest and costs.
Creditors also claimed that Saucier created at least 24 companies to avoid liability for the Mars debt and to protect the revenue he generated from games he leased to casinos.
“The revenue from the games is funneled through the various companies in such a way that Saucier claims it never comes into his possession and therefore is unavailable to his creditors,” one of the companies suing him charged in a 2006 court filing. “Saucier is misusing each of the defendant Galaxy Gaming companies to avoid his financial responsibilities.”
In 2008, Sherron Associates accused Saucier and his companies of fraudulently transferring two patents between themselves to frustrate a court order that required the patents to be sold. Saucier was supposed to turn them over to Metro Police for auction to satisfy the judgment Sherron won.
The cases settled out of court last year when Galaxy Gaming agreed to pay Sherron Associates $150,000 and Saucier agreed to pay $350,000 out of his own pocket.
Others who had business dealings with Saucier also railed against him.
Melissa Beckett, a former CPA who worked as the Mars’ controller, said Saucier “had no respect for authority and regulatory bodies and did not have respect for rules and regulations,” according to Frink’s report.
Michael Piccolo, an assistant Spokane city attorney during the time Saucier operated the Mars, said Saucier “came as close to lying as a person could” in bankruptcy court proceedings, the report says.
Burnett, Nevada’s Gaming Control Board chairman, said a company’s actions in another state wouldn’t necessarily have repercussions in Nevada, but it could.
“Other states sometimes have vastly different laws and regulatory standards than we do,” Burnett said. “There are cases when a ‘denial’ doesn’t mean the same thing as it does in Nevada. For example, in some states in the Midwest, there have been denial proceedings but they’re for various transactions and don’t necessarily relate to the integrity or the suitability of the company itself.”
Burnett wasn’t familiar with Galaxy as a company — although company officials appeared before the Control Board in November — and said he wasn’t aware of Saucier’s regulatory issues in California.
Burnett said Nevada investigators would contact California agents to find out more about the allegations and see if they warrant further probing here.
As for licensing, the Nevada Control Board did investigate Galaxy when the company initially received a license in 2010 but found no problems.
As an associated gaming equipment provider, Galaxy is not required to submit to extensive background investigations and isn’t required to make recurring appearances before regulators.
“Approval (for equipment providers) is different than a regular gaming licensee,” Burnett said. “They aren’t investigated or vetted to the extent a regular licensee is.”
If investigators find issues, the company could have its approval revoked or face closer scrutiny, Burnett said.
Much like was done in California, investigators could probe Saucier’s financial filings, tax returns and personal records.
Those who have been through such a scrub say it is one of the most detailed examinations they’ve experienced.