Confidential documents contradict Gaming Control Board’s claims to lawmakers

Confidential documents contradict Gaming Control Board’s claims to lawmakers

Character, honesty, and integrity. That’s what Nevada’s gaming regulators demand of applicants and licensees. But the Gaming Control Board is declining to talk about documents obtained by the Current, which indicate at least one top GCB official, IT Division Chief Jim Barbee, failed to come clean during testimony before the Senate Finance Committee last month.

Nevada’s new Gaming Control Board chairman Kirk Hendrick, appointed in January by Gov. Joe Lombardo, told members of the Senate Finance committee at a May 15 hearing on Senate Bill 490 that he was falling on his sword when the GCB augmented its budget request for a new information technology system from $3.6 million to $13.5 million.

“Through nobody’s fault that I’m aware of, and certainly through no fault or misuse of state funds, it’s come to our attention that a further scope of work, and deeper dive analysis needed to be done on how much money is actually required to finish this project,” Hendrick told lawmakers, adding the augmented figure came to light as a result of his “tough conversations” with vendors replacing the 40-year-old system. “How did this happen? I unfortunately don’t have an honest answer for you, because I’ve done some research into it.”

But a budget planning document provided to the Current by a state official who asked not to be named indicates the GCB was aware in 2021 that it would require another $10.1 million to $12.8 million in payments to the vendor, Ciber, to complete the switch from its dated system to new technology. Yet a budget request submitted in 2022 by Barbee seeks $3.6 million to complete the upgrade by 2025.

“As this will be the last biennium we will be requesting AMP (Alpha Migration Project) funding, this request will allow us to complete the project and have minimal functionality remaining to be developed,” Barbee wrote in the email.

Hendrick did not respond to an email asking whether he was aware of the earlier estimate, and declined to address the documents because they may be confidential and/or privileged under state law, and I will not arguably waive such protection.”

Barbee did not respond to emails asking why his budget request was $10 million less than the GCB’s 2021 estimate to complete the migration to Ciber.

If not implemented, “Ciber will continue to drain the resources that could otherwise be allocated for other Board needs,” Barbee wrote in a confidential five-year budget planning document that details extensive shortages in staffing, expertise and technology at the GCB.

“IT staff are woefully undertrained,” Barbee wrote in the document dated March 2022, adding he’d like to “implement ongoing training for each member of the team.”

“The Board’s information security infrastructure is insufficient to protect the Board from modern cyber security threats,” Barbee wrote. “Given the impact a cyber security incident would have on the Board and its overall ability to effectively regulate the gaming industry on a daily basis, the Board must improve its cyber security infrastructure.”

Members of the Senate Finance Committee indicated they were caught off guard by the GCB’s last minute request for $13.5 million instead of its budget requested amount of $3.6 million to complete a system integration.

“This is like an extra $10 million that we didn’t contemplate and I’m just trying to figure out how was that overlooked from February to now,” Sen. Dina Neal said during the hearing.

“Am I clear that not nobody, none of you know why this happened in the budget and why we need to expand this revenue, this money amount?” committee chairwoman Sen. Marilyn Dondero Loop asked Hendrick, Barbee and Deputy Chief of Administration Nathan Riggle, who joined the GCB this year.

“Let me fall on that sword and tell you that the three of us sitting here do not know that…” Hendrick said, adding the GCB, which is severely lacking in essential IT personnel, according to the confidential documents, thought it could complete the project on its own. “I don’t know why it was represented that we would only need $3.6 million from the Legislature this biennium and then after that, any future maintenance or development could be handled internally.”

Barbee took over the project in January 2022, according to an email from then-Chairman Brin Gibson announcing he was moving the IT Division “including ultimate responsibility for the AMP (Alpha Migration Project),” to the Technology Division.

“I understand this move will unsettle some. I regret this. After a year of frustration with Ciber, several heated Q&A sessions with them and clear demand for measurable timelines and benchmark, even their latest update PPT is inadequate,” Gibson wrote. “I need someone with thick skin and the ability to disregard the technobabble Ciber feed us to oversee Ciber’s work.”

Gibson, who left his post in November 2022, did not respond to questions about whether he directed Barbee to request less than the amount needed to finalize the transition. Current and former state officials say the project’s total cost of approximately $13 million was widely known among staff.

Senators did not respond to requests for comment on the budget documents that indicate the GCB has known the cost of the project for two years.

The Senate Finance Committee voted Saturday to pass the measure, but with an amendment awarding the GCB $8 million now and the potential to receive another $5.5 million during the interim.

“It’s not lost on any of us that the gaming industry is our industry,” Sen. Marilyn Dondero Loop, the committee chairwoman, said. “And so it’s important that we spend this money, but we want to make sure it’s done judiciously.”

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