DOJ: News Release

State: Contractor Fails to Deliver Electronic Reporting System for Gambling Machines

HELENA – The Montana Attorney General’s Office Friday filed a complaint in district court against Lodging & Gaming Systems, Inc., GAMET and Steve Urie, president of both corporations. The suit follows months of state efforts to get the Reno, Nevada company to fulfill its contract obligation to deliver a system to connect video gambling machines to a central computer system.

“The legislature authorized the Department of Justice to develop an automated accounting and reporting system that would link video gambling machines to our offices,” Gene Huntington, administrator of the department’s Gambling Control Division explained. “The system is critical to efficient tax collection and effective regulation of video gaming, but the contractor has failed to deliver the system and consistently refused to provide us with a plan or schedule for delivery of the system.”

Huntington said that the department has an obligation to taxpayers and video gaming operators who volunteered for the system to take the legal action necessary to assure that the State gets what it has paid for. The complaint also asks for the State to be reimbursed for revenue because development of the system has been delayed.

“If LGS can’t or won’t deliver a working system, we will pursue alternative means of developing a system,” Huntington said.

The filing was the latest chapter in a legal dispute that began in April, when the Department sent LGS a letter indicating that the state would terminate the five-year contract unless some progress was demonstrated in developing and delivering the system. On June 5, the Department terminated the contract and demanded the return of equipment it purchased and had shipped to LGS offices for use in designing the software. To date, LGS has been paid over $900,000 for development of the automated accounting and reporting system.

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