Nevada Assembly Passes Lottery Bill, Gaming Reform Clears Committee

April 18, 2023
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Despite opposition from the casino industry, the Nevada Assembly on Monday approved a constitutional resolution to legalize a lottery, the latest effort over the decades to add the Silver State to the list of 45 states that have lotteries.

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Despite opposition from the casino industry, the Nevada Assembly on Monday (April 17) approved a constitutional resolution to legalize a lottery, the latest effort over the decades to add the Silver State to the list of 45 states that have lotteries.

Assembly Joint Resolution 5 (AJR5) would remove a section of state constitution that has prohibited lotteries in Nevada for the past 159 years.

The Assembly, without debate, passed the resolution by a vote of 26-15 with one member absent, sending it to the Nevada Senate for further consideration.

AJR 5 is co-sponsored by Assemblywoman Daniele Monroe-Moreno and Assemblyman Cameron Miller, both Democrats. Monroe-Moreno and Miller said lottery revenue would be used to fund youth mental health programs.

“While we agree more needs to be done today to address our youth’s mental health challenges, the Nevada Resort Association remains opposed to a lottery,” Virginia Valentine, president and CEO of the Nevada casino industry's main trade body, said on Monday. “No other state’s economy is as dependent on gaming and tourism as Nevada.”

The commercial gaming industry is Nevada’s largest employer with more than 386,000 jobs, paying $2.1bn in industry-specific taxes and fees in fiscal year 2022. Unlike other states with lotteries, Valentine said, 35 percent of Nevada’s general fund revenue comes from the gaming and resort industry.

“Any effort to amend Nevada’s constitution, particularly one that would be such a significant shift in Nevada’s public policy, should be well understood and carefully vetted for impacts to the state and its residents,” Valentine said.

“AJR 5 only removes the prohibition from the state’s constitution. It does not provide any details or language on how the lottery would be structured and what types of lottery games are allowed.”

Most importantly, Valentine said, the resolution “does not guarantee that the funding would be put towards mental health programs.”

Should the legislature pass AJR 5 this session, Nevada lawmakers would also need to pass the resolution again in 2025 before it could go to the voters after that, and then subsequently the legislature would establish by law how the lottery was operated and regulated.

Culinary Union secretary-treasurer Ted Pappageorge praised the passage of AJR 5, saying Nevada deserves a permanent mechanism in place to fund the desperate need for youth mental health and education.

On Friday, the Assembly Legislative Operations and Elections Overview Committee approved AJR 5, sending it to the full Assembly for their approval.

“I can’t tell you how much I appreciate our gaming industry,” said Monroe-Moreno. “We are a hospitality state. It is not going to change because we have a lottery.

“The reason I signed on as a co-sponsor was that my constituents and resident throughout this state asked for it.”

Republican Assemblywoman Jill Dickman voted against AJR 5 on Monday. Dickman expressed her opposition to the resolution on Friday, saying she believed that lotteries “usually turn out to be sort of a voluntary tax on poor people.”

Revised Gaming Regulation Bill Passes Committee

Friday April 14 was the deadline for legislative measures to make it out of committee, and before adjourning for the weekend, the Senate Judiciary Committee unanimously approved an amended version of Senate Bill 14 that proposes various changes to the state’s gaming statutes.

Lawmakers approved SB 14 without debate. The measure was not listed on Monday among the bills to be considered during the Senate’s next floor session.

The bill, which has been authored by the Nevada Gaming Control Board (NGCB), was amended to incorporate several proposals from a separate NGCB-backed measure, Senate Bill 7, that was pre-filed in November but was tabled during the early days of the session by the Judiciary Committee.

However, the amended version of SB 14 did not include a more controversial provision within SB 7 that would allow for the temporary registration of gaming manufacturers in Nevada.

Had SB 7 been enacted as proposed, it would have enabled “a person who holds such a temporary registration to manufacture and deploy a gaming device, associated equipment, a cashless wagering system or an interactive gaming system" without obtaining a license or other authorization required by regulators.

Currently, gaming equipment suppliers in Nevada are generally required to wait for the outcome of a license application before doing business with a casino or other gaming operator, whereas in other states, including New Jersey, it is possible to obtain a waiver to enter into the transaction after applying for a license and undergoing an initial review.

Among the provisions of SB 14 approved in committee is one granting the control board chair the “sole and absolute discretion” to appoint the spouse or next of kin of a deceased or incapacitated gaming license holder to assume those operations or receive revenues without procuring a state gaming license.

The NGCB chair may condition or limit an approval in any manner they deem necessary and appropriate. The temporary licensee also must comply with all provisions of state gaming regulations or face disciplinary action for any violation.

The bill also authorizes the NGCB to designate as bad debt any amount of debt it assigns to the Nevada Controller that the control board determines is impossible or impractical to collect.

The bill further provides that any judicial review or judicial determination of a NGCB decision can be made only in the state's First Judicial District Court in Carson City.

If adopted, the bill would also amend the definition of gaming employee to help ensure the NGCB does not need to return to the legislature every two years to amend the definition. Those whose duties do not involve gaming activities, such as serving food or beverages, will not need to be licensed.

“This will bring clarity to the industry on which employees need to register on a more consistent basis,” the amendment taken from SB 7 reads.

Other proposals added to SB 14 would modernize statutes regarding the oversight of cloud services providers related to interactive gaming, clarify which entities involved in the operations of a race book or sports pool need to be licensed, and allow for the governor to appoint a retired employee as NGC commissioner under emergency conditions.

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