Owner of failing casino blames slots

RENO -- Siena Hotel Spa Casino owner Barney Ng says his casino's downward spiral started with faulty slot machines he purchased from International Game Technology.

But a judge tossed out his evidence, which Ng says he obtained from a former IGT employee who was fired by the Reno-based slot machine maker because he stole the information. The 2005 decision was part of a back-and-forth series of lawsuits about the Siena's lack of payment on the slots and whether the slot machines were faulty.

"That would have changed everything," Ng said about the information tossed from court.

But casino industry experts say even if the accusations were true, other factors, including Ng's inexperience and a massive loan, have put the downtown Reno casino on the brink of going out of business.

The boutique hotel-casino faces bankruptcy, with debts that could be as much as $100 million. It struggles to pay basic expenses such as power bills, room taxes and employee health insurance costs.

Gambling experts say factors in the Siena's downfall date to its 2001 opening and go deeper than a judge's decision.

"Well, the location is terrible, the market was declining, 9/11 came into play," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. "It was an orphan casino with no ties to any other casinos. Ng had no experience. The whole facility was too small in comparison to what the standard was for successful casinos, even in Northern Nevada.

"There were inconsistencies between the hotel rooms and casino floor. It was in a bad neighborhood. The list goes on and on. And to blame it on a software glitch, in my opinion, is not at all credible."

The back-and-forth lawsuits between IGT and the Siena is where the evidence emerged that Ng says could've changed his casino's fate.

In 2004, IGT sued the Siena for nonpayment of monthly bills for the slot machines that the company had installed in the casino. The lawsuit also accused the Siena of not paying IGT's cut from the progressive slots.

The Siena countersued, claiming the casino didn't pay IGT because the slot machines were faulty.

As the lawsuits snaked through the court system, Ng's evidence to back up his claims against the slot maker emerged from former IGT employee Baljit Saini.

Before he was fired in 2004, Saini allegedly stole and in 2005 sold IGT's secrets to Ng, according to court papers. Ng acknowledged receiving information from Saini but denies paying for it.

Ng said the secrets proved computer chips used in the machines were faulty, and estimated it cost the Siena about $200 million in the first five years of operation.

"We would have won outright," Ng said, if the data and testimony would have been allowed.

In August 2007, a judge ordered the Siena to pay IGT about $4 million for missed slot machine payments and revenue owed to IGT from progressive slots. A month later, the Siena filed for a new trial, and it was granted in February 2008.