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Slot Machine Holds Are Not Trade Secrets

The Supreme Court of Nevada ruled that the Nevada trade secret law does not preclude a defendant from demonstrating that information is readily ascertainable and therefore not a trade secret even when the defendant acquired the information by improper means. MEI-GSR Holdings, LLC v. Peppermill Casinos, Inc., Case No. 70319 (Supr. Ct. Nev., May 3, 2018) (en banc) (Cherry, J). The issue arose when Ryan Tor, a Peppermill employee, went to the Grand Sierra Resort owned by MEI-GSR Holdings and was caught using a slot machine key to access several of GSR’s slot machines. The Nevada Gaming Control Board investigated the matter and found that Tor had accessed the machines to obtain their “par value.” A par value is a gaming industry term for the theoretical percentage that the casino should retain. The information for a single machine at any point in time is essentially worthless, but the par value of an entire casino floor can be very useful to a competitor. After the investigation, the Gaming Board found no evidence that Peppermill used the information to adjust its own machines. GSR then sued Tor and Peppermill for violating the Nevada Trade Secret Act. The Nevada statute defines a trade secret as information that “[d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other persons who can obtain commercial or economic value from its disclosure or use.” Peppermill admitted to improperly obtaining GSR’s par values.

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