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With about four months left before he steps down as chair of the Nevada Gaming Control Board (NGCB), Kirk Hendrick is lobbying state lawmakers to approve a bill to allow the control board to administratively approve new casino games without waiting for further sign-off from the Nevada Gaming Commission (NGC).
The proposed statutory change is one of the various provisions of Assembly Bill 58, a gaming regulatory reform bill submitted to the Nevada legislature based on recommendations of the NGCB.
In addition to AB 58, the NGCB also has submitted Senate Bill 46 to allow the three-member board to investigate and initiate a hearing if a license holder previously found unsuitable has not divested their ownership in a gaming operation, among other changes.
AB 58 received a hearing before the Assembly Committee on Judiciary on Monday (February 17), while SB 46 has been assigned to the Senate Committee on Judiciary but has not yet been scheduled for a hearing.
“These revisions are sought to more efficiently handle technology processes that are essential for the success of Nevada’s gaming industry,” Hendrick told assembly members of AB 58.
Hendrick’s testimony focused on sections two and six of the bill that would allow the NGCB chair to administratively approve new casino games and devices without additional approval from the Nevada Gaming Commission.
“That might sound significant at first blush, but it is important to note that no new game has been rejected in recent memory by the control board or commission,” Hendrick said. “The commission has also put all new games on its consent agenda for the past several years.”
Nevada has a two-tiered regulatory system consisting of the NGCB and the NGC. The control board is a full-time agency that administers the Nevada Gaming Control Act, but new regulations and both licensing and product approvals must be ratified by the part-time, five-member commission.
Hendrick stressed that the time delays for gaming manufacturers are real but there are minimal risks due to internal and external product reviews conducted by NGCB staff and independent testing labs (ITL).
Additional approvals from the NGC might add 60 days to the overall approval time for a new slot machine or casino game, according to the NGCB chair.
When new games are submitted to the control board, they generally take between three to six months to go through the process that culminates in commission approval.
It remains unclear if every Nevada gaming regulator will support the proposed streamlining of approval of new games and gaming devices, such as slot machines.
Previously, NGC chair Jennifer Togliatti questioned proposed regulations that would have granted additional authority to the NGCB chair to expand the use of wagering accounts in Nevada casino-resorts.
Togliatti specifically opposed language in an amended regulation approved in December to enable payments via wagering accounts for “any other uses approved by the [NGCB] chair.”
“What if we have a chair that feels it should be opened to all purposes?” Togliatti said. “What review is there of any of this? That’s concerning to me.”
Togliatti said she was not concerned that Hendrick would allow the use of wagering accounts state-wide, but was concerned that the commission would lack the authority to grant final approval.
Both the Nevada Resorts Association (NRA) and the Association of Gaming Equipment Manufacturers (AGEM) expressed their support for AB 58.
“We understand the board’s proposal in AB58 is aimed at streamlining that process,” Daron Dorsey, president and CEO of AGEM, said of the approval of new casino games. “At AGEM, we have no issues with the proposal and welcome any efforts to streamline processes in Nevada.”
Virginia Valentine, president of the NRA, said major casino-resort operators support the bill “both because it streamlines the approval of games and gaming devices and allows for faster approvals which will make new games and devices available sooner”.
In recent years, Hendrick said, the average number of new games submitted for approval each year has ranged between six and eight, while between one and three new gaming devices are submitted for approval.
“These numbers are down quite a bit from where they might have been several decades ago,” Hendrick said. “The administrative approval by the board chair proposed in sections two and six would facilitate the quicker deployment of new games and gaming devices.”
Hendrick stressed that the administrative approval of a new game or device “does not absolve these products from a thorough review.”
He explained that when a new game or gaming device is proposed to the control board, a manufacturer or developer is required to send the products to an independent testing lab (ITL).
“In the case of a new game, the testing lab ensures that the product has a theoretical payback threshold of at least 75 percent and the game rules must be reviewed,” he said. “In the case of a gaming device, the independent testing lab must verify the product complies with the appropriate technical standards.”
“These sections arose because the board has heard for Nevada to remain competitive with other gaming jurisdictions, new innovations must be reviewed as quickly as possible to allow customers to have that technology on the floor,” Hendrick added.
Hendrick explained that new games could be variants of blackjack, such as Blackjack 22, while new gaming devices typically refer to the next generation of slot machines based on the latest software that may be available.
Hendrick noted that when the control board drafted AB 58, the intent was to group together all technical matters into one bill, while Senate Bill 46 attempted to group together all technology matters.
Last month, Hendrick announced that he would step down after Nevada's 120-day legislative session that ends in early June.
“My only plan is to get a lot more done in the next four months,” Hendrick told attendees at the beginning of the control board’s February 12 meeting held in Boulder City.
“We have accomplished so much in the two years since [fellow NGCB member Judge George Assad] and I got here, and now that I have a shot clock facing my remaining time it just adds more pressure on me to get more done in the interest of time,” the chairman said.
