February 23, 2012

Three casinos hit with state fines for violations

The Iowa Racing and Gaming Commission hit the Riverside Casino with a $20,000 fine this week for allowing an underage person to get onto the gambling floor. It was the second recent violation for the facility.

General manager Dan Franz spoke to the commission. “We certainly regret that this happened, we take it very seriously, we take our responsibility to maintain the integerity of the gaming floor very seriously. And quite frankly to be up here again the second time within a year regarding a violation, we’re embarrassed by that, and don’t feel good about it at all,” Franz said.

Franz says this case was a simple mistake as the minor had a paper I-D and it couldn’t be scanned by the security officer. Franz says the man looked at the I-D and immediately started looking at the height and weight listed and missed the date of the person’s birth. “There’s really no other excuse for it, other than he made a mistake,” Franz said.

Riverside also paid a $20,000r fine for the first instance, and would have to pay $30,000 if there is another problem before April.

The Racing and Gaming Commission also fined Harrahs Casino and the Horshoe Casino, both in Council Bluffs, $3,000 each for allowing someone who had banned themself from gambling to enter the casinos. Commission administrator Jack Ketterer says the casinos have to be vigilant in preventing people who “self exclude” themselves from gambling.

“People do that all the time, and there’s not any way for the licensees to catch all these people, but what we do want them to do is when they have a taxable jackpot….that they compare that person’s name with the name on the self exclusion list and their Social Security number,” Ketterer said. He says these two casinos did not catch the self exclusions and allowed the people to collect jackpots.

Any jackpot over $1,200 requires identification before it can be paid out.

Racing and Gaming commissioners confident in selection of new administrator

The Iowa Racing and Gaming Commission Thursday accepted the resignation of commission administrator Jack Ketterer and then appointed Ketterer’s successor at the same meeting. The commission is believed to be the only one allowed by the Iowa code to appoint its own administrator.

The commissioners voted unanimously to appoint racing director Brian Ohorilko to succeed Ketterer who is retiring. He will have to be confirmed by the Iowa Senate. Commission chair, Toni Urban of Des Moines, says they consulted with the governor on the choice, and feel Ohorilko has the experience needed.

Urban says one of the factors in the decision is the possibility the legislature may decide to start internet gambling this year and Ohorilko is a nationally known expert on internet gambling who wrote the commission’s report on the issue for the governor. “So the transition is perfect, and I think that he’s gonna prove that he’s gonna do a wonderful job for the State of Iowa. And we’re excited about that,” Urban says.

Commissioner Greg Seyfer has been on the commission the longest, and said Ohorilko was the logical choice to fill the position.

“If we were to open the thing wide up and accept resumes, his would come to the top,” Seyfer says. “And we have the added benefit of at least myself working with him for six years, going through the licensing process a couple of years ago. And I think he’ll do a great job.”

Some may be critical of the decision not to open up the position, but Seyfer says they should see how Ohorilko performs. “He’s filling out the rest of Jack’s term, which I think is almost ideal in that it’s kind of a testing period and it’ll come up again in two years and at that stage if people want to open it up, that’s fine. If Brian proves himself like we all believe he will, then I think it’ll prove out that we’ve done the right thing,” Seyfer said.

During the commission meeting and discussion of the appointment, Seyfer said one of the things he also liked about Ohorilko is that he is a registered high school official. Ohorilko’s resume says he is registered to work football and basketball games and has been selected to officiate the football playoffs from 2008 to 2011, and the 2011 girls state basketball tournament.

Ohorilko has been with the Iowa Racing and Gaming Commission since 2004. He will begin his job in the lowest pay range, between 120 and $130,000. Ketterer is paid $180,000, but he says that is not the top of the salary range.

Racing and Gaming Commission administrator to retire in March

Jack Ketterer

The man who has overseen most of the major advances in the casino gambling industry in Iowa announced today that he is retiring.

Iowa Racing and Gaming Commission administrator, Jack Ketterer, says he has been considering retirement for the last couple of years, but there were major issues that had to be completed.

“You know we were tied up with the applications of the facilities (for gambling licenses) in 2010, and then last year we had the (online) poker report and the advance deposit wagering, and I really didn’t want to dump that on the staff,” Ketterer says.

The 64-year-old Ketterer led the commission in the early 1980′s when casinos, horse racing and dog racing were introduced, then left for a job in Arizona in 1988. He returned to the state in 1993 and says his 20 some years on the job have been interesting.

 ”It’s a vast industry that we regulate because most states have two separate commissions for parimutuel racing and for gaming, and we have everything, so you deal with a lot of different people,” Ketterer explained.

Ketterer says he has been lucky to always have great commissioners to work with and said he’s always had great support from the governors he’s worked with. The development and expansion of gambling has been controversial, but Ketterer is pleased with the way things have gone under his leadership.

“We had a lot of trying times,” Ketterer said and laughed. “But I think the main thing is that we, we regulated the industry, we never had any major scandals, we upheld the integrity of the industry. And at the same time we had a climate that fostered a lot of economic development in Iowa.”

Ketterer said the economic impact of the industry on the state may be the thing he is most proud of. “When you look at all of the racing and gaming facilities, the number of jobs that they created, and the number of amenities and suppliers around them that they supported, I think in trying to minimize what many people feel are the negative impacts of gambling, I think I probably remember that.”

Greg Seyfer of Cedar Rapids has the longest tenure on the current commission. He says Ketterer brought a lot to the industry.

“His knowledge is I think just unsurpassed in the country. He does a very good job of not being an advocate, but giving us all the information we need to be able to make a decision,” Seyfer says.

Ketterer will leave the job on March 30th, and the commission today appointed its director of gaming, Brian Ohorilko to succeed him.

“You know these are big shoes to fill, Jack Ketterer is man of great integrity, great character and is an exceptional regulator. You know, I am fortunate I’ve had the opportunity to work with Jack over the years and learn from him,” Ohorilko told reporters.

Ohorilko doesn’t anticipate any major changes when he takes over. “My goal is really…with that knowledge that I’ve learned from Jack and my experiences as a fan in both the racing and gaming industries and working in the industry to just continue to maintain and serve the citizens in Iowa with the highest integrity of gaming,” Ohorilko. “You know we have great leadership by the commission and we have great staff, and I am confident we can fulfill that goal.”

Ohorilko is 31, and an Iowa State University graduate who lives in Mitchellville. He must be confirmed by the Iowa Senate. If confirmed, he would start in April and serve out the remainder of Ketterer’s term which expires on April 30, 2014.

Supreme Court upholds ruling in Clinton casino development

The Iowa Supreme Court has ruled a $10-million settlement awarded a casino consultant in a dispute with a developer is all the company can collect. Signature Management Group successfully sued Wild Rose Entertainment and developer Gary Kirke after Wild Rose received a gaming license for a casino in Emmetsburg in 2005, and then terminated its consulting contract with Signature.

The court ruled the action by Wild Rose was a breach of contract and awarded the $10-million to Signature. While the Emmetsburg lawsuit was still going on, the Racing and Gaming Commission awarded a license to Wild Rose to build another casino in Clinton.

Signature then sued, saying the contract with Wild Rose included any casino development and the company should also be compensated for a breach of contract in the Clinton casino development. The district and appeals courts ruled settlement over the Emmetsburg casino precluded any further court action against Wild Rose.

The Iowa Supreme Court reviewed the lower court rulings and found that Signature knew that Wild Rose had won a license for the Clinton casino before the Emmetsburg case was decided, and had plenty of time to amend the case to seek additional damages. But since Signature did not amend its case, the Supreme Court says it did not find any reason to approve a new lawsuit.

Report details possible revenue, technology for state on-line poker

The Iowa Racing and Gaming Commission’s report on internet poker released today shows there are several ways the state could set up and regulate the on-line gambling in the state. The Iowa legislature asked for the report to determine the feasibility and possible income that could come from the enterprise.

Commission gaming director, Brian Ohorilko, says they used three national surveys on potential profit to try and project Iowa’s take. “The range is pretty wide, based on those projections it was anywhere maybe 2.9 million to 13.2, and we did include that in the report,” Ohorilko says.

Estimates given to the legislature last year said revenue could total between 30 and 35-million dollars, but the commission report says privacy concerns prevent those estimates from being verified. there are not on-line operations that can be used to directly compare the potential revenue that could be generated in Iowa, making the projections a best guess.

 ”It is just speculation, and so I think it would be difficult to really get a good handle (on the income),” Ohorilko says. The published studies used in the report varied widely in their projections of potential nationwide income.

 The report also examines a number of systems for regulating internet poker. He says there are different levels the state could regulate and the report identifies those levels and tries to explain what could be regulated and what could not.

Ohorilko says for example, some type of “geo-location” technology is recommended to ensure gamblers are actually in the state. “There are a number of companies that provide technology to identify the I-P address for individuals when they are using their computer, so that was one of the recommendations, or one of the ideas of how you would regulate that area, is you would use geo-location technology,” Ohorilko explained.

The geo-location technology is not the perfect answer for keeping tabs on players, as they could use what’s called a “spoof” I-P address. Ohorilko says the system also can have a range of error that could be as much as five miles. The report suggests a layered approach that would use other types of technology to follow up the geo-location system.

The report also outlines some of the things that cannot be controlled. An example according to Ohorilko, is an adult who sets up an account and gives the password to a minor. There would be no way for the state to know the minor was using the account illegally. The report does not make a recommendation on whether or not the state should move ahead with internet gambling as that is not what the legislature asked.

Ohorilko says it simply gives the legislature information to work with if they decided to look at creating an internet gambling system in the next session. The report also did not examine how much it might cost to set up the on-line system within the state.

See the report at: www.iowa.gov/irgc.

Report on on-line gambling due on December 1st

The Iowa Racing and Gaming Commission is just about three weeks away from releasing its report on internet poker. Division administrator, Jack Ketterer, says the report will give information, but not advice.

Ketterer says the legislature asked them to look at internet gambling in the state and a regulatory framework for it. He says lawmakers did not ask for a recommendation on moving ahead with internet gambling. Ketterer says they want to provide the information to let the legislature make its own decision on the issue.

Ketterer says their role is to gather information and collect facts so the legislature is up to speed when bills are introduced so “they can make an informed decision on what’s the best public policy for Iowa.” Ketterer says the issue of internet gambling is one that’s hot nationwide.

“It’s somewhat fascinating in that you see something on it about every day, it changes,” Ketterer says. He laughed and said there may be changes to the report. Ketterer says nailing down one key factor on the impact of internet gambling has not been easy.

He says one of the things the legislature and everyone else wants to know is how many people would do it and how much money it would bring in. Ketterer says the answer to that is “pretty speculative.” He says they are getting information from the sources they feel are the best informed and they will reveal those in the report.

Ketterer says they did see a survey of some of the people who play poker in state-licensed casinos and about half of them said they would play on-line if it was available, and half said they wouldn’t. The report will be released to the legislature on December first.

Two casinos pay fines for illegal gambling

The Iowa Racing and Gaming Commission issued penalties for two casinos Thursday for gambling violations. Lakeside Casino in Osceola agreed to a penalty of three-thousand dollars after a man who had signed an agreement blocking him from gambling was allowed to conduct a cash transaction at the casino to obtain $15,900.

The man later cashed in $11,400in chips. Casino spokesman Jim Quilty told the commission they made changes to prevent this from happening. He says mistakes are made as the result of human error and they are making efforts to be sure they learn from those mistakes.

Quilty says the employee who allowed the transaction to happen was disciplined. Quilty says all of the personnel were trained so they better understand their obligations.

The Mystique Casino in Dubuque agreed to a penalty of $20,000 after an underage person was allowed onto the gambling floor four times and was able to gamble. Roger Hager of the Mystic Casino spoke to the commission.

Hager says they have re-trained all the employees involved in the incident and says they have been disciplined as well. The penalties were handed out at the Racing and Gaming Commission’s meeting in Johnston.