Nevada Considers Temporary Supplier Registration To Remain Competitive

December 20, 2022
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When members of the Nevada legislature begin their 120-day session in early February 2023, among the bills they will consider is a proposal to change the way gaming manufacturers and system providers are licensed.

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When members of the Nevada legislature begin their 120-day session in early February 2023, among the bills they will consider is a proposal to change the way gaming manufacturers and system providers are licensed in the state.

Senate Bill 7 (SB 7), which was pre-filed last month by the Senate Judiciary Committee on behalf of the Nevada Gaming Control Board (NGCB), revises state gaming regulations relating to the registration and oversight of employees, fining an applicant or licensee who is late or deficient in making certain filings and repealing provisions concerning global risk management.

Also within the bill is a provision to allow the Nevada Gaming Commission (NGC) and NGCB to adopt regulations to allow for the issuance of a temporary registration as a manufacturer.

If adopted, the regulations would enable “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.

“Part of the policy of the state is to ensure that Nevada’s gaming industry remains competitive,” NGCB board member Phil Katsaros told VIXIO GamblingCompliance of SB 7 in an email.

“The control board has proposed section four of Senate Bill No. 7 to bolster Nevada as the gaming industry’s center for innovation, where new products and technologies may be deployed in the market while still being held to the highest of standards,” Katsaros said.

Under the bill, if the commission eventually adopts temporary registration, any person wanting to be registered would need to submit an application to the control board, along with a non-refundable fee “not to exceed $100,000”.

The application would have to contain a description of any gaming device, associated equipment, cashless wagering system or interactive gaming system proposed for manufacture or deployment in Nevada. Applicants would also be required to inform regulators of any criminal conviction, or any suspension or loss of a professional license within the last five years.

The bill also would allow the NGCB to establish a period for which the temporary registration is valid. That detail would be decided as part of the final regulations.

The ability to extend the registration by 180 days is meant to be a backstop in the event the full licensing investigation take longer than normal.

“I think what you see now as the industry has grown, matured, is in some cases the licensing hasn’t caught up to it,” said Jonathan Michaels, senior vice president of strategic development and government affairs at Sightline Payments.

“I don’t envy [our principals] for what they have to go through for the licensing process,” Michaels said. “So how do you make that more efficient? And it’s really great to see Nevada say, 'how can we do things different with the support of the control board and commission'.”

Michaels said he believed the proposed statutory change would not “reduce any of the integrity, but you can streamline things and can allow innovation to come to market quicker.”

According to the bill, the control board chair would be authorized to terminate or impose a condition on the temporary registration as a manufacturer at any time, while requiring a manufacturer to remove any equipment or systems in use should the registration expire or be terminated.

Among the other proposed regulatory changes in SB 7 is eliminating the current requirement that prohibits anybody from being employed in the Nevada gaming industry, unless they are temporarily registered or registered as a gaming employee. Instead, the bill calls for employees to simply register and pay a fee to the control board. This fee has not yet been determined.

Another section of the bill allows for fines to be issued against an applicant or licensee “who is late or deficient in making any filing … in addition to any fees and costs associated with the filing.” The measure also eliminates the current definition of gaming employee and requires the NGC to define the term “gaming employee” by regulation.

The Senate Judiciary Committee has also introduced Senate Bill 14 that proposed additional changes to the state’s gaming regulations, including rules to allow a spouse or personal representative of a licensee who has died to temporarily represent them without a state gaming license, and revising provisions relating to delinquent debt owed to the NGCB.

The Nevada 2023 legislative session begins February 6 and ends on June 5.

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