The Nevada Gaming Control Board (NGCB) heard from representatives of various gaming industry suppliers as well as industry trade organizations on Tuesday (March 21) as regulators took an initial step to address concerns over the time it takes to approve new gaming technology for deployment in the U.S.' largest casino market.
“What we want to focus on is the future,” said control board chairman Kirk Hendrick. “What we are really hoping to get out of this meeting … is the chance that you can tell us from the industry side what is not being done that could speed up the process.”
Hendrick made it clear that the workshop was only the first step in modernizing Nevada’s gaming technology approval process.
Although Nevada’s record of regulating gaming has helped the state earn its prestige and leadership position for many decades, those who testified on Tuesday agreed that the approach to overseeing gaming technology has not kept up with some more advanced approaches that have been adopted by other states.
Daron Dorsey, executive director with the Association of Gaming Equipment Manufacturers (AGEM), noted that regulations overseeing gaming approvals were updated in 2015 but still lag behind those developed by other states and tribal gaming authorities in the U.S. over the last couple of decades.
“Those jurisdictions adopted a prudent approval methodology that recognizes gaming technology is a national and global marketplace and sought to make their jurisdictions preferred venues for early and initial introduction to compete with Nevada for operators,” Dorsey said.
Dorsey testified that the result is many new gaming products and innovations of all types actually developed by companies based in Nevada are first deployed, enhanced and utilized outside the state.
He said it might be months or possibly years before those products are being enjoyed by Nevada customers and gaming establishments.
“Our gaming technology industry believes modernization of our approval and deployment process can greatly improve Nevada’s marketplace.”
Dorsey suggested several ways to improve the process, including a more collaborative instead of bureaucratic approach to make Nevada a place where gaming innovations are first introduced.
He also suggested adopting a framework whereby independent testing laboratories conduct all necessary testing and certification of products in the state, as well as a significant overall of Nevada’s field trial processes so they conform with modern standards where unnecessary and duplicative trials are eliminated and any required ones provide a clear, objective path forward.
Hendrick asked Dorsey how the NGCB could change the way field trials of new casino games and other technologies are conducted.
“I think there would be an identification of a wide variety of items where field trials are not applicable,” Dorsey said. “That could be products that have been deployed in other jurisdictions for a period of time before they are brought to Nevada. That product is in the field elsewhere and a field trial here may be … unnecessary.”
Conversely, Dorsey said, if it is an innovative product that is being brought to the market for the first time in Nevada, it does need to be put in the field “so you can beat it up and see how it works in a real world environment.”
Among those who testified on Tuesday were: Virginia Valentine, president of the Nevada Resort Association; Richard Primus, chief information officer with Penn Entertainment; and Omer Sattar, co-CEO of Sightline Payments.
Primus said Penn has rolled out cashless wagering at its casinos nationwide, but has been struggling in Nevada because of the regulatory process and the regulations themselves.
“I think some of the regulations and the interpretations are written based on technology that was created a generation ago,” Primus told the control board.
In 2015, the control board and Nevada Gaming Commission adopted several regulation modifications that were viewed as ways to streamline the gaming technology approval process.
Among the list of current requirements is for potential licensees to submit a white paper outlining the technology or concept, then consult with the NGCB’s Technology Division, followed by product development, then obtain a verification that a product complies with state gaming regulations, and finally receive NGCB approval.
In a notice to licensees dated October 20, 2015, then NGCB chairman A.G. Burnett wrote the adopted amendments to three state gaming regulations would “facilitate the efficient entry of new concepts and technology into Nevada.”
“Things were changing when I was chairman and continued to change after that,” Burnett, a partner at McDonald Carano law firm in Reno, told VIXIO GamblingCompliance on Friday.
“COVID-19 forced the conversation of cashless payments, the repeal of PASPA led to an explosion of new sports-betting companies with new sports-betting ideas, and of course Moore’s Law prevails: Technology increases its capacity and power exponentially with time.”
Burnett noted that the technology approval process in Nevada as in other jurisdictions has to keep up with that, forcing a re-evaluation of risk types and levels.
“Consumers of course have changed as well, and there are expectations that must be met in a sensible and reasonable manner,” he said.
In terms of biometrics and Artificial Intelligence (AI), Burnett said those technologies may have their place in gaming, but must be utilized with care and responsibility.
“I think the regulators in Nevada and the industry share that opinion and can successfully move forward with those technologies,” he added. “I always felt that conversations with all of the stakeholders involved were the best way to tackle these types of issues.”