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Gaming Guru

Howard Stutz

Nevada gaming regulators back to debating tavern rules

23 August 2013

LAS VEGAS -- The Nevada Gaming Commission and Control Board on Thursday found itself debating potential changes to a regulation governing the operation of slot machines inside the state’s tavern industry.

Several commission members were clearly unhappy that Regulation 3.015, which underwent several changes and faced extensive scrutiny in 2011, was back in front of them once again.

“We don’t want to see the rules changed every two years,” Gaming Commission Chairman Pete Bernhard said at the outset of the three-hour hearing.

“One of the worst things regulators can do is to provide un­certainty. I thought we resolved this issue in 2011.”

Initially, the changes were made to outlaw slot machine parlors, such as the business model associated with the Dotty’s chain of taverns.

Rival tavern operators and the Nevada Resort Association claimed Dotty’s was nothing more than a glorified slot machine parlor, offering snack food and minimal alcohol while focusing solely on gaming.

The commission made changes in the regulation requiring Dotty’s and similar small businesses with gaming to have a nine-seat bar, 2,000 square feet of public space and a kitchen operating at least half the time the business was open.

Senate Bill 416, which was approved by lawmakers last spring, designated a tavern to have 2,500 square feet of space for customers, as well as a bar area and working restaurant in order to qualify for a restricted gaming license to operate 15 or fewer slot machines.

The Attorney General’s Office said the bill needed to be merged with Regulation 3.015.

Also, tavern operators needed to prove the revenues produced by the slot machines were incidental to the tavern’s primary business.

Bernhard said he disagreed with the attorney general’s interpretation of the changes.

Gaming Commission member John Moran Jr., said 2011 changes should have eliminated slot machine parlors from the state.

“I thought we resolved this problem,” Moran said.

The tavern industry’s trade organization also disagreed with the attorney general.

Attorney Sean Higgins, representing the 1,450-member Nevada Restricted Gaming Association, said an incidental test on revenues is not spelled out in any Nevada Revised Statute.

“This battle never seems to end for us,” said Higgins, a lobbyist who was part of the negotiations over the changes in 2011.

Higgins blamed the Nevada Resort Association for the matter returning.

“We went through this issue, we vetted it and it was done,” Higgins said. “Un­fortunately, the group standing next to me thought it wasn’t good enough.”

Nevada Resort Association President Virginia Valentine said the organization said all small businesses operating slot machines in Clark County and Washoe County should be required to meet an incidental test on revenues.

Tavern owner Randy Miller, whose eight operations include restricted and nonrestricted locations, said he would support a revenue test.

However, he is tired of the constant changes to the state’s restricted gaming laws.

“All we are asking for is some guidance,” Miller said. “We don’t want you to tell us how to operate our business. We’re concerned that the rules change before we can even open up location.”

In other commission action, a company partly controlled by retired tennis great Andre Agassi was fined $15,000 for failing to report several ownership changes.

The company, Flamingo Investments, owns and operates the Sedona Lounge on West Flamingo Road near the Las Vegas Beltway.

The three-count complaint named Agassi and Adam Corrigan.

Neither party appeared at the hearing.

In a stipulated settlement, the ownership agreed to pay the $15,000 fine for failing to receive gaming regulatory approval when ownership interest was transferred in the property.
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