New Sheriff In Nevada Governor's Mansion Seeks Regulatory Changes

April 4, 2023
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Facing a deadline set for the end of the month, the Nevada Gaming Control Board will host a workshop next week to receive industry input on whether a selected group of gaming regulations should be deleted or updated before a final list is eventually submitted to the governor’s office.

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Facing a deadline set for the end of the month, the Nevada Gaming Control Board (NGCB) will host a workshop next week to receive industry input on whether a selected group of gaming regulations should be deleted or updated before a final list is eventually submitted to the governor’s office.

“I am confident that this is a good starting point compiled by all of the divisions of the NGCB,” the body's chair Kirk Hendrick told VIXIO GamblingCompliance via email on Monday (April 3).

“Input from industry representatives and the public will help focus the list of recommendations to the commission,” Hendrick said. “Additional input will be taken during a future regulation workshop before any final decisions are made by the commission.”

Hendrick scheduled the workshop to review proposed regulatory deletions for April 12. He said his goal was for more revisions to be proposed during the process.

Republican Governor Joe Lombardo stressed during the 2022 campaign and in his initial days in office the need for Nevada to reduce its regulatory burden on businesses, including licensed gaming operators.

Among Lombardo’s first decisions as governor was to sign Executive Order 2023-002, freezing the issuance of new regulations and requiring a review by all state agencies of existing regulations. The order also seeks details on how regulations can be streamlined, clarified, reduced, or otherwise improved.

Lombardo, who is the former sheriff of Clark County, Nevada, asked that all agencies submit their recommendations by May 1.

“The governor’s proposal addresses more specific and obvious cost and time savings for the casino industry and appear well founded,” Anthony Cabot, distinguished fellow in Gaming Law at the University of Nevada, Las Vegas’ William S. Boyd School of Law, said Monday.

“However, they are not a significant revision of the regulations or how Nevada regulates the casinos,” Cabot said.

“What the state ought to be considering is having a portion of the regulations reviewed on an annual basis.”

Once the control board signs off on which regulations will be scrapped or updated, the list will be sent to the Nevada Gaming Commission for final approval.

In a notice to licensees issued on Friday (March 31), the NGCB stressed that this meeting was to solicit comments on regulations to be included in the report submitted to the governor’s office.

The three-page notice contained about 15 regulations identified for removal, including eliminating outdated surveillance standards, as well as regulations surrounding the use of promotional devices, and certain approvals by the chair of the control board.

Among the 31 pages outlining why a particular regulation can be deleted is removing the requirement that licensees notify the control board if any portion of their surveillance system changes from analog to digital video recorder format. NGCB staff noted that this regulation was no longer necessary as a vast majority of licensees use digital recording formats.

To reduce the regulatory burden on licensees, the NGCB also proposes to eliminate the requirement that licensees submit wagering account rules before they are amended or adopted to the chair of the control board.

There is also a proposal to remove Regulation 5.025, which requires written approval by the NGCB chair to operate a keno game that exceeds a $250,000 payout. Control board staff noted that this is a “requirement that is not present in any other revenue area.”

“The NGCB estimates a possible positive economic impact on licensees since they will not need to request the written approvals from the chair … to operate keno games that offer a payout exceeding $250,000 on any one game,” according to the agency's proposal.

The proposed changes also eliminate certain actions and required information to be provided to the control board, including submitting a list to the NGCB of all persons who may access the main computer or data components prior to beginning operations of a gaming system.

NGCB staff also recommended eliminating a regulation regarding the requirements to monitor and record activities occurring in slot change booths for a Category A gaming license, with $40m or more in annual gross revenue, and a Category B gaming license, or casinos with $15m or more but less than $40m in annual revenue.

A slot change booth is a structure on the casino floor which houses a coins counting device used to redeem coins from patrons. Staff noted that licensees “no longer use slot change booths; therefore, the surveillance requirement is unnecessary.”

Cabot explained that the problem “with having a regulatory system in place for 60 years is that it accumulates a lot of deadwood,” and that regulations are “rarely revisited unless they become significant issues.”

“I think the regulators ought to implement a rolling process where they review several regulations each year to modernize and eliminate those whose burden now exceeds their value,” he added.

The NGCB also plans to submit proposed updates to eight regulations. Among the 15 pages of proposals, the control board proposes to update Regulation 5.110 to increase the threshold amount from $1,200 to $5,000 at which licensees are exempt from recording a progressive log on a recurring basis.

Regulators are also proposing to remove “nonrestricted” so that all licensees can record the progressive amount at least every seven days, so long as they have an NGCB-approved online slot metering system.

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