DOJ: News Release

Gambling Control Division, LGS Reach Agreement

HELENA – The Gambling Control Division of the Montana Department of Justice today announced that it has reached a settlement agreement with Lodging and Gaming Systems (LGS) of Reno, Nevada, in relation to the development of the state’s Automated Accounting and Reporting System.

The Automated Accounting and Reporting System (AARS) was authorized in the final days the 1999 Legislature with the passage of House Bill 109. Passage of the legislation was the culmination of several years of consideration of the system that began with a recommendation from the Legislative Auditor in 1994. Such a “dial-up” system was intended to allow GCD to monitor video gambling machines throughout the state.

Gambling Control and LGS originally signed a contract in September of 2000.

In the following months, however, Gambling Control paid approximately $930,000 for development of the AARS, but a dispute arose over delivery of the system and the required plan for the system. In April 2001, the Gambling Control Division told LGS the contract would be terminated unless some progress was made in developing and delivering the system. On June 5, 2001, GCD terminated the contract and demanded the return of equipment it had purchased and shipped to LGS offices for use in designing software.

On July 27, 2001, GCD sued LGS in the District Court in Helena, alleging that LGS breached the contract and seeking unspecified damages. The case was scheduled for trial in early 2003.

Under the new settlement agreement:

  • LGS will deliver the portion of the system that had been previously paid for.
  • Upon successful testing of the system, the Gambling Control Division will pay LGS an additional $350,000 to transfer to the state the technology necessary for installation and operation of the system.
  • LGS will continue to be involved with field-testing of the system.
  • Upon the completion of testing the state will assume the ongoing installation and operation of the system.

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