Gaming Commission rejects slot machines at cash registers

By Richard N. Velotta

Thursday, March 18, 2010 | 6:38 p.m.

The Nevada Gaming Commission has rejected a new game concept that would have enabled convenience store customers to take their change from a transaction as a credit on a slot machine at the cash register.

Commissioners today voted 3-2 to reject a proposal from Mickey Roemer, president of Las Vegas-based Roemer Gaming, which would have allowed the entrepreneur to continue developing details of the concept. The state Gaming Control Board had asked the commission to review the concept as a policy matter before allowing the developer to set up a system for a field test.

"It's not a question of can it be done, but should it be done," said Commission Chairman Peter Bernhard during the concept review.

Commissioner John Moran Jr. led the effort to deny the concept, remarking that he envisioned "five Little Leaguers with Slurpees in line at the convenience store" waiting for an attendant to activate the "Change Game" slot machine at the counter for another customer. Nevada law prohibits children from loitering near slot machines.

Regulators weren't worried that underage players would try to gamble. But they were concerned with the proximity of a slot machine to children. They noted that even in grocery stores, slot machines are required to be placed in alcoves away from checkout stands.

Roemer described the system as a "low-risk, high-reward" slot machine and the proximity of the gaming would be akin to the keno runner who takes wagers in casino restaurants.

Bernhard and Commissioner Radha Chanderraj sided with Moran in the 3-2 vote. Commissioners Tony Alamo and Joe Brown wanted to see the concept explored further, knowing that they would have had the opportunity to adopt additional regulations if needed.

In other business, the commission unanimously approved a slot-route license for Henderson-based Coxman Gaming, which once operated payday loan stores that were shut down voluntarily after regulatory problems arose.

Coxman had been recommended for approval by the state Gaming Control Board on March 3, after questioning the management's lack of oversight of Cashbox LLC, a subsidiary that grew to operate 10 payday loan stores in Southern Nevada.

The loan stores - all located separately from Coxman's gaming interests - were closed in December.

The commission approved a limited slot-route and distribution license so that Coxman will be able to operate slot machines in seven convenience stores and two small sports bars, in Henderson and North Las Vegas. Coxman, operated by Chet and Karla Cox, has held five restricted gaming licenses in Nevada over the last 15 years, last appearing for licensing in 2008. The slot route would include only properties owned by the Coxes.

Commissioners said the Coxes learned a hard lesson in the operation of the Cashbox stores, which were investigated by the state's Financial Institutions Division.

Regulators found the operation illegally made loans greater than 25 percent of the customer's gross monthly income, made multiple loans to the same customer at the same time, made title loans without regard to the customer's ability to repay and charged interest and late fees on loans that had been rescinded or in default.

Stores also made title loans larger than the fair-market value of the vehicles used as collateral and began repossessions on vehicles before the end of the terms of some loans. Regulators also uncovered a variety of accounting errors and omissions.

Cashbox was fined $50,000 and the department ordered the operations closed, but the Coxes shut the stores down themselves. Cashbox managers engaged in fiscal misconduct, the Coxes said, and were fired.

Chet Cox told the commission today that all payday loans have been forgiven, all titles have been returned to their owners and only one property lease is unresolved. The company has requested waivers on penalties and interest from the Internal Revenue Service. He said the resolution of the issues has come at great personal financial cost to him and his company.

His wife, Karla, added that her "trust in people has been annihilated" as a result of the activities of the unscrupulous managers they hired to run the loan operation.

The commission approved a limited license, meaning that the company would have to appear before the board again in 2012 to continue being licensed.

Commissioners approved the license despite an unusual last-minute twist - the 16-year manager of the company's operations is leaving this week to take a job with a competitor.

Attorneys for the company said they could not disclose the company that had hired longtime manager Brenda Franklin. Commissioners questioned the Coxes' son, C.J., who is expected to take over Franklin's position. In his role, he would not be required to get a gaming license.