Nevada Gaming Commission denies license to game developer

A leading proponent of skill-based video game slot machines and video game gambling in the state will need to regroup after the Nevada Gaming Commission on Thursday denied him a gaming license.

GameCo LLC CEO Blaine Graboyes (his legal last name on the state application is Goldman) was denied licensing in a 4-1 vote after four hours of sworn testimony and deliberations by the commission.

The denial prevents Graboyes from operating in Nevada or collaborating with gaming licensees in the state. Graboyes said he has 12 video gambling machines operating in Nevada and four in Oklahoma.

Graboyes’ attorney, Sonia Vermeys of Brownstein Hyatt Farber Schreck, did not return calls or emails inquiring about whether Graboyes would appeal the commission decision.

Graboyes had big plans for GameCo.

After receiving a temporary license for two years in Nevada in 2019, GameCo developed video game titles that encourage young players to move to casino versions of the same game.

Among GameCo’s slot titles are Nothin’ But Net, Steve Aoki’s Neon Dream and Terminator 2. All have a skill-based component to them that give players an edge to win more money if they play the game strategically.

Graboyes said his next project would be to establish an esportsbook in Colorado that would enable gamblers to wager on the outcomes of video game tournaments and matches.

Graboyes went through hard times to get to licensing consideration.

In testimony Thursday, he described how he cut off power to his own house to save money in his effort to develop GameCo’s video game gambling that would attract more GenX, millennial and GenZ customers to casinos with his machines.

He was hired as a consultant to a small Toledo, Ohio, company, Beyond Gaming, in 2014, and top investors eventually named him the company’s CEO. He said Beyond, teetering on bankruptcy, never paid him.

Graboyes was accused in a social media post of taking intellectual property from Beyond Gaming for GameCo when he worked as consultant and CEO.

That’s what led to Thursday’s denial vote. Beyond Gaming eventually filed to liquidate under Chapter 7 bankruptcy, and gaming commissioners couldn’t reconcile Graboyes’ taking abandoned intellectual property from Beyond to GameCo. Graboyes said he offered to pay $50,000 for software codes, though he was skeptical that he could use them for GameCo.

At the start of the Feb. 3 Gaming Control Board meeting and Thursday’s commission meeting, Beyond Vice President Justin Yamek, during public comment periods, accused Graboyes of driving Beyond into bankruptcy and taking the company’s software assets. Graboyes has denied the allegations. No lawsuits have been filed, but commissioners said Graboyes had a conflict of interest in his roles as consultant and CEO for Beyond and CEO of GameCo.

“There appears to have been self-dealing throughout your tenure with this company, and that’s troubling to me,” Commissioner Rosa Solis-Rainey said during the commission’s deliberations.

“I inferred self-dealing. I inferred conflict of interest,” Commissioner Steven Cohen said during the deliberations. Cohen was critical of the GameCo CEO’s actions regarding Beyond Gaming, saying it appeared that “by your course of conduct you basically were jockeying to get control of these assets.”

Commissioners based the denial on failure to meet standards in state statutes addressing licensing and suitability. Commissioner Deborah Fuetsch cast the vote against denial, agreeing with the Control Board’s recommendation that Graboyes should be given a year of temporary licensing to build a case for suitability.

Graboyes had applied for a finding of suitability as a trustee, beneficiary and officer and director of GameCo LLC and for a license as a manager and key executive of the company.

The Nevada Gaming Control Board, on Feb. 3, voted unanimously to give Graboyes a one-year temporary license to allow him to resolve concerns about his role in the 2014 bankruptcy of Beyond Gaming.

Graboyes was licensed in Nevada in February 2019 with a two-year restriction after board members questioned his treatment of tax liabilities years ago and his failure to report lawsuits and liens resulting from those liabilities during his licensing suitability investigation.

He succeeded in satisfying regulators on the tax problems and lawsuits and had expressed excitement about the prospect of getting a license this month.

Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter.

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