IAGA SUMMIT FOCUS REGULATED GAMING
What is a critical regulatory issue you are facing in your jurisdiction, and how are you looking to resolve it?
Like all regulated gaming jurisdictions, Nevada simultaneously handles multiple issues, ranging from urgent to routine. In January 2023, Nevada Governor Joe Lombardo highlighted the critical issue of balancing the state’s effective gaming regulation with the time required to approve new gaming products.
To understand the issue, several public workshops were held in 2023, and input was received from all interested stakeholders. To resolve the issue, the NGCB spent the past 15 months reducing regulatory burden and seeking faster deployment of new and modified gaming technology to casino floors. Efforts by the NGCB to resolve industry concerns include the following initiatives, which balance effective regulation with streamlined review and approval:
ACES
Te “Approval Categories for Equipment and Systems” (ACES) initiative launched on November 1, 2023. ACES provides faster approval of certain Associated Equipment modifications by eliminating potentially time- consuming ITL pre-approval inspections. ACES uses three categories in a risk-tolerant approach to equipment approvals:
Category 1: No risk modifications = Only notification to NGCB.
Category 2: Lower risk modifications = No ITL inspection, NGCB approval within 5 business days.
Category 3: Higher risk modifications = ITL inspection and NGCB approval. For purposes of efficiency and speed, licensees can include Category 1 and 2 submissions with any Category 3 application.
Te initiative allows manufacturers to harmonise approval requirements with modern software development methodologies. ACES also provides manufacturers greater flexibility to respond to the dynamic needs of gaming operators by reducing regulatory overhead; saving time and money in the testing process; and rapidly deploying routine changes to regulated products.
ELIMINATION OF CERTAIN FIELD TESTS
Historically, field testing of gaming devices can add months to the approval process. Manufacturers questioned why additional field testing might be required in Nevada when certain devices had already been deployed in other regulated jurisdictions. As a result, Industry Notice #2023-65 (effective September 1, 2023) expedites the introduction of certain gaming devices by eliminating field testing. Pursuant to the Notice, a new or modified device is presumed to not require a field test whenever: (1) the device is approved by the
RAPID APPROVAL OF SLOT MACHINE MODIFICATIONS
Another Industry Notice is expected to be issued in May 2024 that will achieve the following:
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One business day turn-around for slot machine modifications.
Kirk D. Hendrick; Chairman, Nevada Gaming Control Board (NGCB)
Kirk Hendrick was appointed as Chair and Executive Director of the Nevada Gaming Control Board in January 2023. A licensed attorney in Nevada for over 30 years, he began his legal career in 1991 as a litigator with a prestigious Nevada law firm. In 1993, the Office of the Attorney General (OAG) recruited Hendrick as a criminal prosecutor of a new Worker’s Compensation Fraud Unit. Hendrick transferred to the OAG’s Gaming Division in 1996, where he was promoted to Senior Deputy and then Chief Deputy of the Division that provides legal representation to the NGCB and the Nevada Gaming Commission. He was also chief legal counsel to the Nevada Athletic Commission for several years. Hendrick returned to private practice in 2001, focusing on gaming and sports law matters and joined the Ultimate Fighting Championship (UFC) organization as a key member of the company’s executive team from 2002 to 2017.
gaming authority of a comparable state or foreign jurisdiction, and (2) at least 10 of the new or modified devices were available to the public and functioning properly for at least 30 days. In many instances, the new approach effectively reduces the time to market.
ANTE UP
In January 2024, the NGCB implemented its “Ante Up” initiative for field test procedures. Ante Up expedites approvals by enabling NGCB agents to perform, and bill their time for, procedures normally conducted by licensees. A major benefit of the initiative is reducing field test burdens on operators. Also, by having NGCB staff directly audit the technology, potential issues are identified faster during the field test period. Consequently, corrective action can be taken quicker by the manufacturer.
NEW TECHNOLOGY DIVISION APPROVAL GUIDELINES
For the past several months, the Technology Division has worked with a group of distinguished gaming attorneys and AGEM representatives to draft a definitive NGCB approval timeframe. Te resulting set of Guidelines establish how quickly applications will move through the approval process. Te NGCB expects to issue the new Guidelines via an Industry Notice in May 2024.
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Reliance to the greatest extent possible on ITL Certification of slot machine modifications.
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Increased speed to market for changes to previously approved slot machines, including the introduction of new slot content and features.
It’s noteworthy that the modifications to be covered by the Notice (approximately 900 per year) represent the bulk of NGCB Technology approvals.
All of the NGCB’s new initiatives are being accomplished while still protecting state public policy considerations. For example, like all regulated jurisdictions, approved equipment and systems must generate reports that ensure accurate gaming revenue, cash asset protection, and patron protection. Various reports achieve those requirements. For instance, several reports are needed to properly calculate gross gaming revenue.
Te reports are necessary because operators in Nevada are allowed deductions from revenue for promotional activity. Accordingly, gaming systems must generate five separate reports to properly evaluate multiple tax structures allowed for promotional play.
Nevada also allows operators to deduct credit play. As a result, gaming systems must properly report such activity.
Other reports include proper documentation of player activity so agents can investigate patron disputes; something that protects all players and licensees.
Due to the reporting requirements, additional time may be necessary to ensure that all reports function properly. Tus, Nevada gaming approvals sometimes do take longer than other jurisdictions. However, never wanting to rest on past practices, the NGCB Audit Division recently performed an extensive analysis of all required reports to confirm that every report is necessary and collects only essential information.
Te NGCB is proud to be working with the industry to address an issue that is important for well-regulated gaming. Te NGCB is also proud that all of the initiatives balance the need for effective regulation with the need for the gaming industry to evolve and market new and exciting concepts.
Special thanks to Chief Jim Barbee (NGCB Technology Division), Chief Tomasina Fremont (NGCB Audit Division) and Sebastian Ross, NGCB Senior Policy Counsel, for helping answer this question.
WIRE / PULSE / INSIGHT / REPORTS P41
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