Thursday, March 6, 1997 | 11:59 a.m.
A son's loyalty to his errant father may have cost him a lucrative state gaming license.
Citing Nevada's need to protect gaming's integrity, the State Gaming Control Board voted unanimously Wednesday to deny a manufacturer-distributor license to Donald Jones, whose father, Daniel, developed the popular casino game Caribbean Stud.
Donald Jones owns Progressive Games Inc., which bought certain patent rights for Caribbean Stud from his father after the elder Jones' legal woes led the Control Board to call PGI and its principals forward for licensing.
Though acquitted of criminal charges relating to a methamphetamine ring that allegedly included two other sons, Daniel Jones has a long criminal record, Control Board Chairman Bill Bible said.
Noting that Daniel -- "a man of great notoriety" -- allegedly attempted to hide his ownership of the Grand Holiday Casino in Aruba, birthplace of Caribbean Stud, board member Steve DuCharme said, "I can't get comfortable that he isn't lurking in the shadows someplace," exercising control over PGI.
After buying certain rights from his father, Donald used PGI to issue sub-licenses to third parties such as Casino Technology Inc., which in turn sub-licensed Caribbean Stud video poker rights to Casino Data Systems Inc., the slot manufacturer.
After grilling William Donaldson, also known as William Parrish and the owner of CTI and a former consultant to PGI, on his role in the convoluted dealings, the board granted his bid for a license, with certain restrictions.
The board's action against Donald Jones, which is subject to review by the Nevada Gaming Commission, isn't likely to affect CTI, Casino Data or other licensees. If upheld, though, the decision could force Donald Jones to sell PGI.
The Control Board members were upset with what they perceived as Donald's attempts to hide his father's influence in PGI between 1993 and 1995 and were concerned with the possible source of his financing.
The elder Jones was arrested in Montana -- though later acquitted -- for allegedly operating a methamphetamine lab in Louisville, Ky., and using two other sons to transport the speed throughout the country. One son died of a heart attack allegedly caused by a drug overdose.
Donald Jones wasn't charged, and his attorneys at Wednesday's hearing offered statements from Kentucky and Montana law-enforcement officials as well as an FBI agent who conducted surveillance of the drug-running operation indicating there was no evidence whatsoever that the younger Jones was involved.
Yet his reluctance to turn against his father didn't serve Donald well at the Control Board, which criticized his "evasiveness" when asked about certain events. And the reason became clearer when former PGI consultant Donaldson testified at his own licensing hearing -- after Donald Jones was denied.
Donaldson said that Daniel Jones was a disruptive influence at PGI, creating problems with PGI suppliers and sub-licensees. Donaldson said he had several discussions with the younger Jones about cutting ties with the father, arguing that valuable royalties and license fees were at stake.
"He would say, 'Well, he's my father and I can't turn my back on my father,'" recalled Donaldson.
Attorneys Jeff Silver of Las Vegas and Lloyd Levinson of New Jersey argued that Donald Jones has severed ties with his father and hired at least three former Control Board employees to help clean up PGI and ensure it complies with gaming regulations in states throughout the country.
"Daniel Jones was involved until 1995 because this was his patent, this was his company," said Silver. "But if you're going to visit the sins of the father on the son, we shouldn't have had this long and expensive investigation. You should have just denied us outright."
"You've performed the most extensive investigation ever of a gaming supplier," said Levinson. "The whole face of this company has changed. There's nobody left in that place other than people you can be proud of. All we're asking for is a chance to prove ourselves."
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