Aruze Gaming Global Given 5-Year License in Nevada
Aruze Gaming Global has been granted a five-year limited gaming license by the Nevada Gaming Commission, following a closely scrutinized application process influenced by financial concerns and an unresolved federal lawsuit. The company, also known as AG2, had initially sought an unrestricted license to operate in the state but was instead given a time-limited approval, requiring it to reappear before regulators in 2030 for renewal.
LISTEN TO THIS ARTICLE:The decision was reached by a 4-1 vote during a commission hearing last week, with one commissioner opposing the issuance of any license. The majority of commissioners expressed ongoing concerns about the company's financial health and legal entanglements.
Aruze, whose assets were acquired out of bankruptcy in 2023 by Empire Technological Group, has struggled to return to profitability after sustaining substantial financial losses since 2022. The current license also extends the same five-year term to Aruze President Linyi (Frank) Feng and Director Tiehui Qiu.
During the hearing, Aruze representatives, including attorney Scott Scherer, emphasized the company's future potential and argued that a limited license could hinder efforts to secure the financing necessary for expansion and operations. Despite those arguments, regulators maintained reservations over the company's transparency and financial sources, especially in light of ongoing litigation involving Hong Kong-based Paradise Entertainment Limited and its subsidiaries.
Paradise, controlled by Jay Chun, who is also the brother-in-law of Aruze President Feng, has filed a federal lawsuit alleging copyright infringement and claims to have an exclusive agreement with Empire. In response, Empire has asserted that Paradise has no ownership stake in the company and was not entitled to approval for its purchase of Aruze's assets during bankruptcy proceedings.
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One Commissioner Rejects Licensing
Commissioner Rosa Solis-Rainey cast the lone dissenting vote against the license entirely, citing confusion over the separation of entities and unresolved concerns about past funding sources. She stated that misrepresentations had been made regarding the origin of funds linked to Chun and questioned whether the applicant had been fully transparent with the Nevada Gaming Commission. While noting that the employees of Aruze have been doing commendable work, Solis-Rainey indicated that her decision was based on integrity issues at the leadership level.
Commissioner Abbi Silver, a former Nevada Supreme Court justice, stated she had reviewed the federal complaint and believed that the allegations merited further observation. She noted that the outcome of the litigation could impact the suitability of Feng to maintain a gaming license, particularly if allegations of taking employees and trade secrets from his brother-in-law's company are substantiated.
Silver said the five-year limitation was justified due to the uncertainty surrounding the lawsuit's claims, indicating that the facts of the case could not be definitively resolved without further legal proceedings.
In response to the concerns raised, Scherer argued that Paradise no longer maintains any claim of ownership over Empire and, if such a claim were asserted, it would conflict with prior public disclosures made by Paradise to its shareholders on the Hong Kong stock exchange. He also challenged the credibility of the lawsuit, stating that most of the allegations were unfounded and lacked factual support.
The company is currently in the process of securing $30 million in funding for daily operations and research and development initiatives. Aruze aims to finalize its capital raise by the end of the year. Commissioner Brian Krolicki expressed support for the limited license, stating that while concerns remain, the five-year timeframe provides an opportunity for the company to stabilize its finances and demonstrate compliance with regulatory standards.
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