As Nevada regulators continue their review of the state’s gaming approval process, the co-founder and co-CEO of Sightline Payments has urged them to consider expanding the agency’s technological expertise.
Sightline co-CEO Omer Sattar admitted that as a business person he wants less bureaucracy but “technocrats are not a bad thing because technocrats can also be experts.”
Sattar used blockchain technology as an example during his testimony last week before the Nevada Gaming Control Board (NGCB).
“We can go to 20 regulators around the country and ask them what a blockchain is and I would be surprised if one out of those 20 knows what it is,” he said.
“You can ask them about generative artificial intelligence, know-your-customer (KYC) technology and computer vision (AI). When you talk about how product enhancements and improvements that are going to change the casino business, the vast majority don’t know.”
Sattar told the control board there is value in adding technology expertise in the agency’s structure, especially in the licensing division.
“We bring new technology. Would it help us if there was a computer vision expert that could evaluate that technology? Certainly,” he said.
He told the NGCB that he could talk for hours about the payments business but the understanding of the business and its nuances by regulators is minimal.
Sattar was one of a half-dozen industry executives and lobbyists who testified last Tuesday (March 21) during a workshop hosted by the three-member control board to gather ideas of how to modernize Nevada’s gaming technology approval process.
NGCB chairman Kirk Hendrick has tentatively scheduled a second regulatory workshop on the issue for April 12.
The purpose of these workshops is to meet Republican Governor Joe Lombardo’s Executive Order 2023-003 that freezes the issuance of new regulations and requires a review of existing regulations.
Hendrick told the Nevada Gaming Commission (NGC) on Thursday (March 23) that the governor has asked regulators to recommend ten regulations for possible removal. Lombardo set a May 1 deadline for state agencies to submit their list of regulations.
Lombardo also said in his State of the State address in January that he wanted to prioritize the streamlining of casino game approvals.
Hendrick asked Sattar if those experts needed to be added to the state government or whether the independent testing labs that gaming companies use to certify their technologies would instead hire them.
“Either way,” Sattar said. “Either way, we are going to pay for it.”
During the workshop that lasted almost three hours, gaming executives also discussed issues surrounding the regulatory steps that were last modified in 2015 that are required to bring a product from design to operation on a casino floor, including white papers.
“We like the process of white papers,” Sattar told the control board. “It allows us to really think about what it is we are building. We are working on three of those right now with the control board. We are going to submit them, and we are going to build products around them.”
He said that Nevada generally having a higher standard than other jurisdictions is a good thing.
Sattar also blamed a lack of innovation in the gaming industry to the difficulty start-ups have in raising money.
“Less than tenth of a basis point of all venture capital funding comes to gaming today,” Sattar said.
“If I go to Menlo Park or Silicon Valley and say I have an idea around generative AI and I want to bring it to analyze slot data, the VC says how much do you need. I say $5m and by the way it is going to take me two years to get licensed to try the product out and then [I] don’t know if there will be a return on that capital.”
Sattar said he was familiar with the process because he tried for years to raise money.
“I’ve used this example publicly before,” he said. “We were trying to raise venture capital of $20m, we couldn’t. We downsized to $15m, we couldn’t. We downsized to $10m and downsized to $5m. In that round of capital raise, we raised $700,000.”
So the only companies innovating or bringing new technologies to the industry, Sattar said, are those like Acres founded by executives who have built businesses previously and are financing the innovations themselves, or those such as Sightline that are effectively able to secure financing themselves or through friends and family.
“If there is an ability to change a law to allow venture-backed companies to try products in Nevada now, we would see real innovation open up,” Sattar said.