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Gaming boxes seized
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January 2, 1998: 2:43 p.m. ET
U.S. Attorney confiscates electronic gaming stations from tribal bingo halls
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NEW YORK (CNNfn) - Agents of the Federal Bureau of Investigation and the U.S. Attorney for the Northern District of Oklahoma searched the Tulsa headquarters of Multimedia Games, Inc. on Wednesday to gather evidence relating to the company's networked MegaMania bingo game, Multimedia said in a statement Friday.
The search, which began around 9 a.m. CST, caused a temporary disruption in the company's MegaMania networked bingo game, a popular attraction in tribal gaming halls.
MegaMania player stations were confiscated in two bingo halls operated by the Cherokee Nation and one bingo hall operated by the Senaca Cayuga tribe, all in Oklahoma. According to the company, the stations had been seized as evidence by the U.S. Attorney's office.
"This is a sad day for justice for the people of Oklahoma and the thousands of customers throughout the country that play and enjoy MegaMania," said the company's legal representative, Larry Sandel of the Tulsa firm of Hall, Estill, Hardwick, Gable, Golden & Nelson. "It is especially sad for the sovereign Indian tribes that depend upon revenues from bingo to meet the needs of their citizens."
A Multimedia spokesman said that the dispute between the company and the U.S. Attorney centers on whether computerized bingo constitutes a Class II or Class III game.
Under the 1988 Indian Gaming Regulatory Act (IGRA), Class II games, which include bingo, lotto and related number-matching games of chance, fall under tribal jurisdiction and are legal on reservation lands. Class III games, on the other hand, are illegal on reservation territory except when strictly regulated by both tribal and state governments.
The IGRA explicitly includes "electronic or electromechanical facsimiles of games of chance" in the Class III category.
However, the spokesman said that MegaMania only uses computers to communicate information from player station to player station and should not be placed into the same category as slot machines or other electronic games.
He added that the IGRA encourages tribal governments to make full use of technology in their gaming activities.
The National Indian Gaming Commission (NIGC) had originally classified the game as Class II in July of 1996, the spokesman said. In October of that year, the U.S. Attorney informed the company that the game was being investigated to determine its proper classification.
Multimedia said it made changes to the game after discussion with both the Attorney's office and the NIGC. The NIGC later ruled that the revised game "constituted Class II gaming and that tribes may play the revised game without risk of enforcement action by the NIGC," the company said.
The U.S. Attorney's office only objected to the computerized aspects of the game and had no issue with the ability of MegaMania games to cross state lines and jurisdictions, the Multimedia spokesman said.
No representatives from either the U.S. Attorney's office, FBI or the NIGC were available for comment.
Sandel said the company was "shocked" and surprised by the search and resulting confiscation of gaming machines and company records.
Multimedia said the other bingo operations were not affected by the temporary disruption, which the company said will not have an adverse material impact on revenues.
Multimedia (MGAM) shares were down 3-78 to 11-1/8 in Nasdaq trading.
-- by associate producer Scott Martin
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