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Gaming Guru

Richard N. Velotta

Gaming Regulators Nix Wireless Cash Machines

19 November 2004

LAS VEGAS -- Nevada gaming regulators on Thursday blocked an effort to allow gamblers to take cash out of their bank accounts while gambling on the casino floor.

The Nevada Gaming Commission says wireless technology that would make it easier for a gambler to draw funds from bank accounts or credit cards while in a casino may be too risky to implement on a trial basis without a study showing the possible detrimental impacts on problem gamblers.

Commissioners rejected a proposal to try a new technological concept in Nevada by Cash Systems Inc., Burnsville, Minn., and Las Vegas-based Mikohn Gaming Corp.

Cash Systems and Mikohn proposed field-testing a portable wireless device that could be brought to a player in a casino and operated by an attendant to arrange for the transfer of cash debited from a bank account or advanced and charged to a credit card.

People requesting funds through the device would pay a fee split by the casino, the bank and the system operator.

Because use of the device would constitute a policy issue -- whether a portable automatic teller machine could contribute to problem gambling -- the state Gaming Control Board asked commissioners to consider how the Cash Systems-Mikohn proposal should be resolved.

The Control Board normally authorizes field trials on new games and devices, primarily to observe their technological performance. Matters of policy are left to the commission.

Representatives of Cash Systems and Mikohn said a local casino had agreed to test the device. They also said if a field trial were authorized, they would contract with Harvard University's medical school to conduct a study on whether use of the wireless device contributed detrimentally to gamblers by making cash more accessible.

But commissioners decided, in essence, that they didn't want Nevada gamblers to be guinea pigs in the field trial. Instead, they recommended that Cash Systems and Mikohn commission the Harvard study in tribal casinos where the wireless device already is in use.

Chris Larson, chief financial officer of Cash Systems, said the device is being used in tribal casinos in Florida and Minnesota and in the Bicycle Club, a California card room. Mikohn, a gaming equipment manufacturer and distributor, has an agreement to market the device for Cash Systems and Mikohn vice president Mike Dreitzer said the companies will follow the commission's recommendation.

Dreitzer said it hasn't been determined how much the Harvard study would cost, nor how it would be conducted. Howard Shaffer, director of the Division on Addictions for the Harvard Medical School, has conducted research on addictive behavior and pathological gambling through the National Center for Responsible Gaming. NCRG board member Paul Harvey, a retired general, appeared on behalf of Cash Systems and Mikohn Thursday.

Gaming commissioners indicated that they would be receptive to revisiting the Cash Systems proposal if problem gambling research were presented with the request. But as the proposal was presented Thursday, commissioners said they were not comfortable with a plan to make funds more accessible to gamblers after the Nevada Legislature, in 1995, banned incorporating ATM-like cash advance devices onto slot machines

ATMs are already allowed in casinos, but they aren't allowed to be part of the slot machine or at a gaming table. Larson and Dreitzer said the device merely made it more convenient for players to access cash.

Carol O'Hare, executive director of the Nevada Council on Problem Gambling, who was at the meeting but did not make a presentation, said she was pleased that the commission takes the issue of problem gambling seriously enough to consider its ramifications, even though technological advancements have made a service more convenient to players.

In other business Thursday, commissioners: Unanimously approved settlement of a complaint by the Gaming Control Board against the Hard Rock Hotel. The action brings an end to a 10-month controversy involving the Hard Rock's racy advertising campaigns.

Under terms of the settlement, the Hard Rock admitted to no wrongdoing but agreed to pay a $100,000 fine -- the maximum allowable by law.

A three-count complaint had been leveled against the Hard Rock, but two counts specifically addressing ad content were dismissed. The third alleged that the Hard Rock failed to comply with an agreement that the property have advertising and promotional materials reviewed by a compliance committee. The settlement agreement clarifies that Hard Rock management -- not a compliance committee -- is ultimately responsible for how its advertising messages reflect on the gaming industry's image.

Approved the extension of licenses allowing Caesars Palace and Mandalay Bay to operate private international gaming salons in their casinos, even though the rooms have yielded little financial benefit to the casino companies or the state.

Jim Hoskins, senior vice president of finance, and Rosalind Krause, senior vice president of casino services, for Caesars Palace, told commissioners that in the two years the salons have been open, Caesars has invested $15 million on preparing the room, but took in only $6.4 million from two customers who played behind closed doors there.

Hoskins said he just returned from a marketing trip to Asia and Caesars is continuing to market the room to Far East players. He said Caesars believes China to be a key market in the future and that the salon would be a selling point for attracting high-rollers to the Las Vegas property.

Terri Porcaro, vice president and general manager of Mandalay Bay, said her property does not heavily market its salon but wants to have it as a competitive measure. She did not disclose financial details of the salon's play.

Approved a series of exemptions on licensee suitability restrictions for Gaming Partners International Corp., formerly known as Paul-Son Gaming Corp., which will enable the local subsidiary to continue to manufacture and distribute roulette wheels in Nevada.