CasinoCityTimes.com

Home
Gaming Strategy
Featured Stories
News
Newsletter
Legal News Financial News Casino Opening and Remodeling News Gaming Industry Executives Search News Subscribe
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
SEARCH NEWS:
Search Our Archive of Gaming Articles 
 

Powerful Supporters Testify for Nevada Bill to Legalize Interactive Gambling

2 April 2001

Judging from a hearing Friday of the Judiciary Committee of the Nevada Assembly, Nevada's gaming establishment is firmly behind a bill that would permit the state's larger casinos to offer interactive gambling, if regulators are satisfied that the proper conditions can be met. The only snag in what appeared to be a carefully orchestrated demonstration of support for the bill came from the Association of Gaming Equipment Manufacturers, which opposed the bill.

Merle Berman, a Republican who represents part of Las Vegas, introduced the bill, AB 296, on March 7. As she stressed in her testimony Friday at the Carson City, Nevada, hearing, the bill is "an enabling act," leaving wide discretion to Nevada regulators on whether to proceed with interactive gambling, and what regulatory conditions should apply to it.

"It allows the widest flexibility for action by our gaming regulators only after demanding legislative guidelines have been established," Berman said.

"Nevada has always been the leader in gaming control," Berman said in her opening remarks. "It is unthinkable to me that the legislature will not allow the Nevada Gaming Control Board and the Gaming Commission to put our state in the position to be the first in developing regulations to control gaming on the Internet in a fashion that provides compliance with applicable law, protection for the player and new tax revenue."

"I am not an expert on interactive gaming," Berman conceded. "However, none of us has to be an expert on Internet gambling to vote for AB 296. We merely have to recognize that wagering on the Internet, the potential of which has been estimated in the billions of dollars, has become enough of a presence in international commerce to justify giving Commissioner Brian Sandoval and Board Chairman Dennis Nielander the authority to study it in a comprehensive matter and to adopt regulations only if legislative standards are met."

Berman introduced Tony Cabot as her designated expert to answer questions from members of the committee. He addressed legislators' concerns over issues like preventing children from gambling online and ensuring that bettors live in locations where gambling is legal. Cabot, the author of the Internet Gambling Report IV, is a gaming lawyer with Lionel, Sawyer & Collins, Nevada's most powerful law firm.

Powerful Law Firm Working for the Bill

Lionel Sawyer lawyers played a prominent role in Friday's hearing. Harvey Whittemore, a leading Democratic lobbyist and managing partner of Lionel Sawyer's Reno office, testified in favor of AB 296 on behalf of his client, the Nevada Resort Association. That's the main trade organization of the state's casino-hotels.

Another Lionel Sawyer lawyer, senior partner Bob Faiss, also spoke in favor of the bill. He introduced another client, Dan Wade, vice chairman of MGM Mirage, the state's largest employer.

"We have spent months and months working through the regulatory bodies" on this issue, Wade told the committee. "This process that we've gone through, we want to make sure this is responsible. Protecting the integrity of the state of Nevada is of the utmost importance to us."

The top regulators also seemed happy with the bill. Dennis Nielander, chairman of the Nevada Gaming Control Board, said his board had been looking at the technology involved with interactive gaming "over the last couple of years."

"The bill is an enabling bill," Nielander stated. "As long as you don't change the words 'may' to 'shall,' we don't oppose it. We will continue to study."

Asked about the fairness of online games, Nielander said: "One of the nice things about computers is they record everything. Now with slot machines, we require game recall of 10 games. With e-gaming, you have almost unlimited recall."

Brian Sandoval, chairman of the Nevada Gaming Commission, was asked how soon interactive gambling might begin in Nevada, assuming this bill passes.

"It takes as long as it takes," Sandoval replied. "I couldn't restrict ourselves to six months or a year. Because the process has to be so thorough, it will take a while. I don't want to say we'll have it done in a year."

Concern over Restrictions

The only negative comments during the hearing dealt with restrictions on who would be permitted to offer interactive gambling. Berman's bill would only allow "a resort hotel that holds a nonrestricted license" to be considered for the licensing of interactive gambling. That definition means that only already licensed casinos in Clark (Las Vegas) and Washoe (Reno) counties that have at least 200 hotel rooms could offer such games.

Berman said she restricted the option to resort hotels because they have invested billions of dollars in the state, would have the most at risk in case anything goes wrong with interactive gaming and have a track record with regulators.

Also, Berman said, "Only resort hotels will have the incentive to couple the offering of interactive gaming with promotions that will bring visitor traffic to their premises. This will enhance employment, sales and room tax revenue and patronage for other businesses that depend on tourism."

But a representative of a rural part of the state expressed concern that small casinos in his district would he precluded from offering interactive gaming.

And Sam McMullen, a lobbyist for the Association of Gaming Equipment Manufacturers – which includes slot machine manufacturers such as International Game Technology, Bally, Sigma, and WMS Industries – and a representative of the group opposed the bill. They called for an amendment that would not restrict the service to resort hotels.

It was not clear exactly what the manufacturers want, whether, for example, they want to be permitted to offer the games themselves. But McMullen said his clients were worried that they'd be excluded under the current language of the bill.

The group's opposition angered the committee's chairman, Bernie Anderson, a Democrat from Reno. "I'm not in a good mood," Anderson said after McMullen and his client testified. "Mr. McMullen, clearly I'm not happy. You've kind of thrown a wrench into this."

Anderson, worried about the tight deadline for passing the bill and the time that may be required to debate amendments, asked McMullen to give him any proposed amendments by April 5, when the committee will again address AB 296.

Earlier in the hearing, Anderson said, "We're moving into a new era in Nevada gaming. This may be the very first step, as we move along this pathway. We need to make sure that they are cautious steps initially. . . ."

< Gaming News