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Powerhouse pull tab machines back in the game

Powerhouse pull tab machines back in the game

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The gambling license of a California-based manufacturer of electronic pull tabs was reinstated Wednesday after the company admitted it violated state gaming regulations, according to the North Dakota Attorney General.

Powerhouse Gaming Inc. agreed to pay a $25,000 fine and an additional $25,000 fine is suspended for two years if the company does not violate any other gaming laws or regulations in that time, according to a statement from Attorney General Wayne Stenehjem.

Stenehjem on July 8 ordered the shutdown of about 500 machines built by Powerhouse because the company failed to show it purchased a software license for each device. Since then the company has “provided satisfactory proof that it has purchased and deployed the required software licenses on all the devices operating in North Dakota,” the statement said. The agreement also states Powerhouse must complete all electronic pull tab reporting requirements within 90 days.

Powerhouse sued in mid-July, saying it was unfairly targeted. It sought money damages and a restraining order that would have allowed it to continue operating. The two sides in August entered into an agreement to dismiss the suit. Powerhouse “maintains it purchased licenses in advance of deployment of all devices and has overall demonstrated it purchased a total of 1800 licenses between April 2018 and May 2020,” the agreement states.

The suspension order cost Powerhouse $60,000 per week and threatened 69 jobs in five states, the company said at the time. Powerhouse attorney Paul Sanderson was not available for comment on Wednesday.

Charitable gaming organizations have been notified that they can resume using the devices that were shut down by the suspension, according to Stenehjem’s statement.

Stenehjem in an interview said no other specific investigations are ongoing. His office regularly inspects and audits machines, and steps were taken after the Powerhouse investigation to assure all other machines were in compliance. Powerhouse won’t have any additional restrictions or stipulations during the two-year period.

Gaming is “a highly competitive industry,” Stenehjem said, and the investigation of Powerhouse machines started with a tip from a local attorney.

“That’s when we looked into it,” he said. “We take tips and do investigations.”

It’s unclear until more reports come in what the losses to charitable gaming organizations might have been during the shutdown, Stenehjem said. Other factors could play into any fluctuation in gaming revenue, too, such as people not going to bars and other establishments to avoid crowds during the COVID-19 pandemic, he said.

Reach Travis Svihovec at 701-250-8260 or Travis.Svihovec@bismarcktribune.com

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