State regulators are to some extent accepting the word of casino operators about the take from thousands of coinless slot machines on which millions of dollars in state revenue are based, a Division of Special Revenue official acknowledged.
But Michael Janusko, the assistant chief of the division’s integrity assurance unit, also said he is “comfortable” with how the state verifies the casinos’ haul, calling its methods comparable to those of regulatory agencies in other states.
“We really have a really good take on how much money is coming out of those slot machines,” he said. “We’re comfortable with the way we get the information.”
The official’s comments came in response to questions raised by some division employees concerning the newly implemented “ticket in/ticket out” system under which slot machine players who win are rewarded with a paper voucher instead of coins.
Connecticut is home to two of the world’s biggest casinos that reportedly together operate about 13,000 slot machines.
More than $5.3 billion went into “selected video facsimile/slot machines” at the Foxwoods Resorts Casinos in Ledyard between July 2006 and January 2007, when players won $472.2 million, division data show.
The state, entitled to 25 percent of that amount, took in $118 million.
Players over the same period deposited $6.3 billion in video facsimile/slot machines at the Mohegan Sun casino in Montville, winning $543.7 million, the data show.
The state’s share was $135.9 million.
The Mohegan Sun casino announced last week that all of its slot machines would be coin-free by May 1, and Foxwoods is expected to be coinless by year’s end.
The division employees, who insisted on anonymity because they fear retribution, said the ticket in/ticket out system eliminates the use of casino personnel to sell change and fill the hoppers on slot machines, but poses an accounting problem.
They said that while the division can review computer tapes of those transactions, there is only occasional audit testing, which is done “after the fact.”
The employees also charged that the division has not assigned accountants on a regular basis to either Foxwoods or Mohegan Sun and that there are no routine, daily checks on the system. Division accountants do conduct random audits, they said, but only after the fact.
Finally, the employees questioned why the division doesn’t have 24-hour staffing at the casinos, saying the Mohegan Sun sometimes does “drops and buys” - in which money is emptied from machines and added up in the counting room - when no division “liaison officers” are present.
Janusko confirmed that no division accountants are assigned to either casino on a regular basis, saying that instead there are “liaison officers up there close to 24/7.”
He said some of those officers may have financial backgrounds or experience, but that they were regular personnel and “not accountants.”
Asked if some were present at the casinos at all times, Janusko demurred, saying he couldn’t “speak to that” because the liaison officers came from a different unit than his.
“They try to keep everyone on, but with the staff they have it is not always a possibility,” he said.
Janusko said division auditors, on the other hand, “go out in the field on a monthly basis, for three or four days a month,” and that they “randomly sample days” at the casinos.
“It might be anywhere from five to 10 days of activity,” he said. “They look at some reports on the tickets that have been redeemed or issued, making sure the information on those reports is matching up with what’s on their ledgers.”
Janusko said it was “maybe partially fair” to say that the state was taking the casinos’ word about how much money was generated by their slot machines.
“We have access to the system reports on how much the ‘tickets in/tickets out’ are,” he said. “We’re certainly not looking at anything in real time, but we’re probably auditing a couple of months after the fact.
“We’re verifying what they have reported - the initial amounts are reported by the casinos and we verify.
“We’re happy doing it this way,” he added. “I guess from an auditing perspective I think it’s pretty consistent with the way other regulatory bodies do it, as far as I know.”
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