Gambling software bill en route to Governor

Software developer VGT Technologies now seems destined to move jobs from Virginia to Tennessee

Email | Print By Milt Capps

VGT's Yarbrough

There may be a little hand-wringing during the next ten days or so, until Gov. Bredesen actually signs legislation that would open the door to coveted high-tech employment in Rutherford County.

House Speaker Jimmy Naifeh on Monday affixed his signature to legislation that would allow Tennesseans to design and produce software for gambling machines, with the caveat that the software may not legally be installed or used in any machines in Tennessee.

Provided Gov. Phil Bredesen signs the bill, Smyrna-based Video Gaming Technologies Inc. could soon begin relocating up to 80 software-development jobs paying an average $80,000 per year to Middle Tennessee, from its current site in Virginia.

A year ago, VGT Chairman, President and CEO Jon Yarbrough said he was likely to create a facility for the software team adjacent to the Smyrna airport. Yarbrough has not yet responded to a NashvillePost.com query.  VGT legal counsel Courtney Pearre indicated in an e-mail exchange this morning that the company prefers not to comment on the matter while awaiting the governor's signature.

The Tennessee Bureau of Investigation again this year expressed some resistance to the measure, though less intensely than it did last year. Last year, the TBI refused to endorse the legislation in any manner. A TBI spokesperson explained that endorsing such legislation would be inappropriate for TBI and could lead to embarrassment.

This year's bill was greatly simplified to make clear that it would remain illegal to integrate gambling software into gambling equipment — as opposed to exporting software to states and tribal reservations where gambling and assembly of gambling equipment are legal.

Under broader legislation proposed in 2006, VGT could have moved as many as 200 manufacturing, software-design and related jobs to Tennessee, but that bill failed to gain traction, due in part to TBI's wary eye. This year, however, under lead sponsorship of Rep. Charles Curtiss (D-Sparta) and Sen. Bill Ketron (R-Murfreesboro), a more tightly defined bill passed the House in final form on May 17, 87 to 0. In the Senate, the floor vote went 22 to 4.

VGT handles roughly $1 billion per year in wagers, with revenues projected at roughly $200 million for the year ahead, all drawn from shares of betting proceeds at American Indian-owned casinos. Inc. magazine has ranked VGT among the nation's fastest-growing companies and Ernst & Young named Yarbrough "Entrepreneur of the Year 2006" in the media, entertainment and communications sector.