Sigma Asks Missouri Court for Restraining Order Against Gaming Commission; Company Charges Commission Violated Its Constitutional Rights in an Abuse of Regulatory Authority.

Business Editors & Gaming Writers

LAS VEGAS--(BUSINESS WIRE)--Feb. 10, 2003

Sigma Game Inc. today asked a Missouri state court for a temporary restraining order to prevent the state's Gaming Commission from not renewing its supplier license. Sigma asserted that the non-renewal was an unlawful and abusive exercise of regulatory discretion that would jeopardize Sigma and the livelihood of its 130 employees.

Sigma's complaint, filed in Cole County Circuit Court, charged the Commission with violating the company's Fourteenth Amendment due process rights. It also challenged the constitutionality of Commission hearing rules that "uniquely and illegally confer upon the Commission the power to take away property without sworn testimony or due process of law."

According to the complaint, "The Commission has acknowledged that the non-renewal of Sigma's license ... is being undertaken to pressure a third party lender to make disclosures that the lender has no statutory obligation to make."

The third party is Aruze Corp. and its CEO Kazuo Okada, from whom the owner of Sigma's parent company, KM Inc., once borrowed $20 million to retire Sigma bank debt.

"The Commission doesn't have a rule that compels Aruze and Okada to make disclosures," said Sigma CEO Jim Jackson. "We are powerless because Aruze and Okada are not employees or agents of Sigma, so our repeated pleas for disclosure have gone unheeded.

"We accept that the Commission is frustrated," Jackson continued. "But they simply cannot ignore the Constitution and destroy a law-abiding business to get information they have no authority to obtain. That's why we are in court ... to put a stop to this injustice."

Donna B. More, Sigma's attorney and former general counsel to the Illinois Gaming Board questioned the Commission's actions in the Aruze and Okada matter.

"As we noted in the complaint," More said, "this Commission seems to think it has the power to suspend constitutional due process rights, inflict irreparable damage and take away property as a means to an unlawful end.

"Talk with gaming regulators anywhere in the U.S. and they will tell you that their regulations must adhere to the principle of due process where people -- and companies -- have a right to an impartial hearing," More asserted. "The Commission has denied that right to our client, and presumably could do the same thing to any other licensed company or to any one of the more than 10,000 licensed gaming employees in Missouri if they are not challenged."

Sigma's injunction request asserts that the Commission's decision not to renew Sigma's license is based on facts already at issue in a pending disciplinary hearing. More said that the courts have held that while an administrative review is pending, the grounds for that review cannot be used as the basis for not renewing a license.

She also contested Commission Executive Director Kevin P. Mullally's assertion that the non-renewal decision makes the disciplinary hearing "moot."

"Sigma has a constitutional right to a hearing on the facts," she said, "and neither Mr. Mullally nor the Commission is in a position to `moot' our rights."

In addition to halting the non-renewal action, Sigma wants the Circuit Court to enjoin the Commission from "conducting any hearings or proceedings against Sigma based on Commission hearing rules that violate the Fourteenth Amendment to the United States Constitution and Article I Section 10 of the Missouri Constitution."

According to the complaint, no other entity in the United States possesses the authority granted to the Missouri Gaming Commission -- the authority to suspend due process arbitrarily.

Sigma Game Inc. is a leader in the manufacture, distribution and service of technologically advanced reel slot and video gaming machines. Sigma serves every casino market in the United States and is established in Canada, Central and South America and the Caribbean.