Nevada Legislature Approves Key Revisions To Gaming Regulations

June 6, 2023
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As the 2023 Nevada legislative session ended late Monday, lawmakers had passed two gaming-related bills that revised several of the state’s gaming statutes, including an industry-supported overhaul of the state’s “foreign gaming” reporting requirements.

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As the 2023 Nevada legislative session ended late Monday (June 5), lawmakers had passed two gaming-related bills that revised several of the state’s gaming statutes, including an industry-supported overhaul of the state’s “foreign gaming” reporting requirements.

During the 120-day session in Carson City, lawmakers also approved Senate Bill 14 that will make various changes to the state’s gaming statutes, as well Assembly Joint Resolution 5 (AJR5) that would legalize a lottery in Nevada.

Senate Bill 266 was approved by a 40-2 vote in the Assembly on the final day of the session. The bill revises the “foreign gaming” statute to eliminate the current requirements that Nevada gaming licensees submit copies of all documents filed with regulators in other jurisdictions.

Licensees are also required to report annually regarding their compliance with gaming regulations outside Nevada. Instead, the document requirement would be replaced with a requirement to file a notice with Nevada regulators upon initiating gaming operations in another jurisdiction.

The bill also eliminates taxes on tournament and contest entry fees collected from events held on-property. The “foreign gaming” statute was first approved in 1977 and amended in 1997.

Greg Gemignani, an attorney with Dickinson Wright in Las Vegas and an adjunct professor at the University of Nevada, Las Vegas (UNLV) International Center for Gaming Regulation, believes there is a lot more room to reduce gaming regulations in Nevada.

“The Modern Gaming Control Act was enacted in 1959 and it was a direct result of a national focus on gaming, high profile criminal activity occurring in Nevada, and a threat by the federal government to end Nevada’s experiment with authorized gaming,” Gemignani said.

“Today, Nevada is not the primary destination of criminals and organized crime,” he added. “Nevada is no longer the only state with broad-based regulated and authorized gaming.”

Gaming of some legal form can be found within the borders of 48 states.

“The challenges of the 1950 through the 1990s regarding criminal infiltration and the threat of federal action are long since gone,” Gemignani said. “The new challenge is to be the preferred gaming jurisdiction for players, operators, inventors, and investors. This new challenge is fundamentally different from the old challenges.”

Anthony Cabot, a distinguished fellow in gaming at UNLV’s Boyd School of Law, agreed, saying SB 266 was only one example of the need to consistently revisit the gaming law and regulations to revise or eliminate archaic requirements.

“Regulations, by their very nature, have economic effects. Most times, the burdens imposed justify the licensee’s and the state’s burden of complying or enforcing the laws or regulations,” Cabot said. “But circumstances change, and technology develops that reduce or eliminate the value of those laws and regulations.”

Therefore, he said, the state should remain consistently vigilant to revise the gaming laws to best maintain the balance between an efficient economy and achieving the policy goals behind the laws.

“Nevada has a more substantial task because it has been around for so long and its gaming laws have ballooned in size and scope,” Cabot said. “They should update regularly the laws and not just when their burden is substantial, and their benefit is small or eliminated.”

Senate Bill 14, 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 prefiled 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.

In other words, 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 regulatory changes in SB 14 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 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.

Silver State Lottery

A bill to create a lottery in Nevada is set to return to the legislature in 2025, after Assembly Joint Resolution 5 (AJR5) passed in both the Senate and Assembly during the session.

The resolution passed in the Assembly on April 17 with a 26-15 vote and then passed in the Senate on May 26 with a 12-8 vote. The joint resolution will get a second vote in the next legislative session in 2025 and, if passed again, the bill will be on the general election ballot in 2026.

The Nevada Resort Association, the casino industry’s main trade group, made it clear after the Assembly’s vote in April that it was opposed to a lottery.

As ratified in 1864, the Nevada Constitution prohibited the state from authorizing a lottery and prohibited lottery tickets from being sold. Nevada is one of only five U.S. states without a lottery.

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