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Kevin Smith

Progress Shown at AB 296 Hearing, but not without Friction

30 March 2001

Legalized Internet gambling took a step closer to becoming a reality today in Nevada as the state Assembly Judiciary Committee held a hearing to discuss the future of a bill that would enable Nevada casino/resorts to offer their games online for real money. How big of a step depends on whose point of view you get.

"I think everybody's on the same page," said Assemblywoman Merle Berman, who introduced AB 296. "Everybody agrees that it should be done."

Committee Chairman Bernie Anderson felt just the opposite. "I thought (the hearing) went terrible," he said.

Anderson’s displeasure centered on what he called an "11th hour move," by gaming manufactures. A group of them attended the meeting and expressed some concerns, which hadn't been addressed since the bill became public last month. According to Berman, the gist of their contention was that they wanted to be more involved in the development of Internet gaming policy.

Anderson didn't necessarily see it that way. "I was disappointed that the manufactures were so late in coming to the discussion that they really wanted to stop us from moving," he said. "We have a 120-day session and all the bills have to be taken care of by April 16, that is a tight date. If they don’t have their act together by the fifth (of April), it is over with."

He added, "This was a major step back in the process. First of all you are asking the legislature to move into an area that is very controversial. The questions are not fully answered or even fully developed. We have a statutory responsibility here to make sure the gaming industry in this state is well regulated and that the public is protected in terms of what Nevada gaming is all about."

The Nevada Resort Association has subsequently been given until an April 5 meeting to submit an amendment on behalf of the manufacturers. The amendments will be worked into a "work session" copy of the bill, which the committee will mull over and vote on April 10.

It was the timing of the manufacturers that Anderson did not like. "Their concern, if it were genuine, would have been brought up a lot earlier than now," he said. "They could have brought this up when they saw the bill some months ago. It is not like it was a hidden item."

Despite Berman's optimism, Anderson said that the manufacturers didn’t all seem to be on the same page.

"I don’t know what they want; they don’t know what they want," he said. "They didn’t make it very clear. The bricks-and-mortar folks of course point out that the gaming control board and the regulatory bodies say that all this may be a couple years away. They just want statutory authority to begin looking at this and how we are going to regulate it, if we are going to do it at all."

It was rather odd, Anderson said, to see a group trying to put amendments forward while it was still trying to figure out what it wanted.

"They had their amendments in hand when they showed up this morning," he said. "When they got to reading their own amendments they couldn’t agree on them among themselves. It is kind of hard to say, 'this is what we are doing,' when you don't even know what you are doing yourself."

Anderson did admit he had gotten wind of the manufacturers objections earlier this week, but he was still broadsided by the degree of their objections.

"It is safe to say that they hadn’t expressed their concerns until an event I was at the other evening," he said. "That was the first they had mentioned it, two days before we had the hearing. Even then they said it was just some small amendments.

"Small amendments we can deal with, but there is a policy question here. You don’t bring forth some major change in policy without serious discussion with the Gaming Control Board and the Gaming Commission. At least not in Nevada."

Scott Scherer, a member of the Nevada Gaming Control Board, wasn’t at all shocked with the last-minute developments. "It was just another legislative hearing," he said.

As for the Board's views, it will maintain a hands-off approach. "We were there as an observer; we are not taking a stance for or against the bill."

The point the manufacturers were trying to make was that there was reason to be concerned over the ability to manufacture machines today that will be compliant with a law that may not take effect until years from now.

Anderson feels that concern is moot.

"The manufacturers’ concern is they want to make sure that if they manufacture some sort of a machine that they can do what they want without having to worry about some sort of Nevada regulation," he said. "That is just not going to happen. It just isn’t."

Another concern raised during the meeting, with much less friction, was a clarification of the tax on Internet gambling. The Gaming Control Board requested that the tax be the same as the tax policy for land-based operations. A tax-related amendment, like the NRA amendment, is to be introduced April 5 in preparation for the April 10 vote.

Anderson hasn't lost hope for the bill though. He's confident that arrangements can be made between the manufacturers and the committee and he feels it's important to make sure that the legislative process doesn’t get ahead of itself and create more problems than it needs.

"We want to make sure that the technology doesn’t get ahead of the wave in terms of our regulatory ability," he said. "Since that has to be put into place by statutory language initially, we need to move into this area because Internet gaming is going to be here whether we want it to or not."

Anderson says he's willing to work with the manufacturers, but they just have to work out their compromises among themselves.

"I would like for them to come to some kind of an agreement on the issue," he said. "I don’t want to put them in a position where they can’t come to an agreement."

Regardless of whether the manufacturers and their associations can reach an agreement on what they want, Anderson said the bill will move forward, with or without their support.

"I am not about to give that away because someone is concerned and maybe they would like to do this in a different way," he said. "If they don’t have (the amendments) to me by the 5th I will not be including them in the work session document. They are out of the hunt by then. We will move with or without them."

If the group doesn’t like the bill they can fight it once it reaches the Senate, which Anderson thinks would be a bad idea on their part.

Berman is confident the bill will pass through the Assembly and move to the Senate where it also has a great deal of support. Not passing such a bill, she says, wouldn't make sense. "The growth of Internet casinos can no longer be ignored," she said in a news release issued Tuesday. "AB296 allows Nevada to make a reasoned decision about what its relationship to wagering via the Internet will be."

Scherer also feels the bill is going to reach the Senate without a problem. "I don’t think this will hang up the bill," he said. "It is just a matter of how much people want to work to get it passed."

While the Gaming Board is not an outright supporter of the bill, Scherer said the legislation does contain everything they are looking for.

"We want to make sure any bill passed will give us the authority and resources to regulate it properly," he said. "This bill does give that to us for the most part."

Attending the hearing were representatives from Signet Gaming, AGEM, M&M Media Services, I2 Corp.,, New Holdings, IBAM, Mikohn as well as the Nevada Resort Association, regulators and gaming experts.

Representatives from the NRA couldn’t be reached for comment today.

Progress Shown at AB 296 Hearing, but not without Friction is republished from
Kevin Smith
Kevin Smith