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December 21, 2014

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Nevada sports, race book operator facing regulatory complaint

The state Gaming Control Board has filed a complaint against the old Leroy's race and sports book chain over problems including the alleged unauthorized acceptance of bets on the 2012 Kentucky Derby from certain locations.

The violations alleged in a complaint dated Nov. 29 and made public today appear to have been self-reported and occurred before Las Vegas-based Leroy's Horse and Sports Place was acquired by U.K. betting giant William Hill PLC.

The William Hill takeover was approved by the Nevada Gaming Commission on June 21.

The three-member State Gaming Control board, which administers Nevada gaming law and investigates reported violations, is asking that the Gaming Commission impose an unspecified fine on Leroy's for the alleged violations spelled out in today's complaint.

The complaint says that on May 9, Leroy's reported to the board that on May 5 it had accepted Kentucky Derby bets at four locations licensed to accept sports wagers but not race wagers — Colorado Belle in Laughlin, Hooters in Las Vegas, Poker Palace in North Las Vegas and Stockmen's in Elko.

The complaint says this appears to be a repeat of an incident in 2003 in which Leroy's also allegedly accepted Kentucky Derby bets at unauthorized locations.

Today's complaint separately says that when Leroy's discovered a scheme targeting betting kiosks at more than 30 Las Vegas-area locations including PT's Pub sites owned by Golden Tavern Group LLC, it modified the kiosks' software to stop the scheme but failed to gain approval of the modifications in advance from the Gaming Control Board.

The scheme, discovered during the NCAA men's basketball tournament in March, involved exploitation of a weakness in the kiosks. The schemer or schemers would repeatedly hit the deposit button on the kiosks immediately after inserting cash, causing the wagering account to be credited for twice the amount of cash inserted. This resulted in ''cash on hand'' shortages in the accounting journals for the affected kiosks, the regulatory complaint says.

The allegedly unauthorized Kentucky Derby bets that were accepted and the unauthorized kiosk software modifications amount to "an unsuitable method of operations and are grounds for disciplinary action,'' the complaint says.

A request for comment on the complaint was placed with William Hill. While such complaints can be contested, they are typically settled.

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