Gamers nix bid in slot case

In a decision that may end up attracting federal scrutiny, the Nevada Gaming Commission has rejected Frank Romano's latest bid for vindication in a celebrated slot-cheating case.

The commission decided Wednesday it had no jurisdiction to allow Romano to present evidence alleging that the State Gaming Control Board knew he wasn't involved in a scheme to rig slot machines at 60 Clark County locations.

Romano surrendered his gaming license and agreed to pay a $275,000 fine rather than contest the 1989 allegations. He now contends his former lawyer gave him poor legal advice and that newly discovered evidence proves he was innocent.

Romano's current lawyer, Edward Coleman, indicated he may challenge the decision in federal court. If successful, a federal suit could dilute the power of states to regulate gaming.

To date, courts have upheld Nevada's right to regulate the gaming industry without affording certain due-process rights to licensees. But there has never been a decision based on civil-rights issues.

While there's no certainty federal courts would accept jurisdiction in such a case, Coleman said he is considering filing one.

Gaming's foes in Congress may also try to use the Romano decision to push for federal controls of the industry, claiming that state oversight isn't adequate to ensure gaming's integrity.

Romano alleges the Gaming Control Board covered up exculpatory evidence and collaborated with a competitor to put him out of business.

The Control Board denies the allegations and says he was an active participant in the cheating scheme and the 1989 negotiations that resulted in his ouster from the gaming industry.

The dispute has been followed by aides to Rep. Frank Wolf, R-Va., one of gaming's most ardent foes and a sponsor of legislation to create a federal gaming study commission. The bill passed Congress Wednesday.

The aides reportedly have told potential witnesses from Nevada that the congressman wants the federal government to license gaming operators.

If Romano's allegations of a cover-up prove credible, the aides said, it would bolster Wolf's bid for federal oversight.

While cognizant of the broader issues, the Nevada Gaming Commission wrestled with a narrower one Wednesday: whether it had the authority to revisit the seven-year-old case.

It began with what Romano now alleges was a Gaming Control Board sting operation financed by a competitor who wanted to put slot-route operators American Coin Machine Co. and American Coin Machine Enterprises Inc. out of business.

Romano was partners with his brother-in-law, Rudolph M. LaVecchia, and father-in-law, Rudolph LaVecchia, in the two businesses, which made and distributed slot machines at bars and other locations throughout Clark County from 1986 to 1989.

Romano alleges the competitor approached Control Board agents and offered to fund a sting against American Coin. Romano says he has a tape recording of an undercover agent talking about altering programs on video poker machines with the LaVecchias.

In July 1989, the Gaming Commission suspended the licenses of Romano and the LaVecchias and seized their video poker machines. The slots had been "gaffed" to prevent players from winning jackpots by drawing to royal flushes when the maximum coins were bet.

Following negotiations with the Control Board, Romano and the LaVecchias agreed to give up their licenses and pay fines.

Romano later sued the LaVecchias in federal court and won a judgment that now totals about $13 million against them. During the case, the court granted discovery motions that led to disclosure of evidence that Romano contends clearly proves the Control Board knew he was innocent.

The evidence allegedly includes internal Control Board memos and a deposition from informant Larry Volk, who was murdered in October 1990. While police reportedly believe they know the killer, no charges have been filed against her.

In the deposition, Volk testified that Romano didn't know about the computer programs used to fix the machines.

Earlier this month, the Gaming Commission quashed Coleman's bid to subpoena current and former Gaming Control Board members until it determined whether it had jurisdiction in the case.

Coleman argued it has "absolute power and authority to deal with licensees."

"Both the United States and Nevada Constitutions say that no person shall be deprived of property without the due process of law," he said. "Due process means a full and fair hearing ... and the ability to present your case."

But Deputy Attorney General Charlotte Mantanane said the Control Board didn't violate due process because it followed the appropriate civil procedures and didn't have to disclose confidential evidence.

"The board didn't want to disclose the names of witnesses and informants and elected to delete certain counts in its complaint," she said. "We weren't hiding evidence, but protecting informants. As you're well aware, a key informant in this case was murdered."

Coleman, though, argued that the commission should hear the new evidence.

"The Gaming Control Board had a duty to see that justice was done, not to convict Mr. Romano without sufficient evidence," Coleman said.

Coleman said the Bankruptcy Court affirmed Romano "had no part, no knowledge, no nothing with respect to the criminal conduct of the LaVecchias."

"If the Control Board has evidence that tends to negate his culpability, why shouldn't it produce it? We aren't asking for the whole record, just evidence that goes to his guilt or innocence."

Coleman said he could produce testimony from two Control Board agents that board members "absolutely knew Romano had nothing to do with it."

"Something went askew here," he said. "This man's constitutional rights were violated and you took an oath to uphold the Constitution.

"We're merely asking you to listen. If you think we didn't prove our case, then rule that way.

"But if you find our evidence is true, we ask you to take the appropriate action, whatever that may be."

Matanane argued that Romano is seven years too late.

"He chose to settle the case," she said. "He cannot now say he's not responsible for the violations when he could have said that at the time of the original proceedings."

Curran spoke about the commission's dilemma.

"We're torn between what seems like a harsh application of the laws that would preclude Mr. Romano from having his day in court," he said. "He's just sort of lost in space, with no remedy for what he alleges is a grievous wrong.

"On the other hand, Ms. Mantanane clearly points out what the law requires."

Commissioner Bob Lewis said, "I think Mr. Romano and the LaVecchias all had their opportunities for a day in court at that time and I don't know how or why we should unravel that."

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