Neighborhood slot licenses are restricted

David Strow

Friday, July 30, 1999 | 11:42 a.m.

A divided Nevada Gaming Commission clamped down on the expansion of neighborhood gaming Thursday, passing a new regulation designed to restrict the placement of slot machines by small businesses.

The new regulation states that only four types of businesses -- bars, convenience stores, grocery stores and drug stores -- are considered "suitable for the conduct of gaming" under a restricted license. The regulation was drafted over concern over the spread of gaming into a wide variety of operations, from fast food restaurants and liquor stores to doctors' offices and car washes.

Other types of businesses, such as liquor stores and restaurants, may still receive restricted licenses, but must first convince the commission that their establishments are suitable for gaming. The petition must also be based on "exceptional circumstances."

Commissioners Augie Gurrola, Bill Curran and Arthur Marshall voted for the new regulation. Voting against were Chairman Brian Sandoval and Commissioner Sue Wagner.

The regulation takes effect on Feb. 1. Businesses that do not fall under the four approved categories, but are operating with restricted licenses now, will not have to comply with the new regulations.

Under the new regulations, convenience stores would have to have between 1,000 and 10,000 square feet to be approved. A drug store or grocery store would have to have more than 10,000 square feet.

Sandoval argued that the regulations would strip the power of the commission to make case-by-case decisions on the suitability of license applications. He also worried that an approval of one licensee in one class, such as a laundry, would automatically set a precedent for all in that class.

"I don't know how this commission will operate if these are adopted," Sandoval said.

But Gurrola, who drafted the regulations more than two years ago, said it marked a victory in trying to stop the spread of convenience gaming into Nevada's neighborhoods.

"This makes an attempt to define exactly what we will approve," Gurrola said. "We should show some restraint ... try to hold back on the proliferation of gaming."

Restricted gaming licenses are granted on the condition that the gaming business is "incidental" to the store's primary business. The new regulation declares that gaming is assumed to be incidental for all applicants in the so-called "Big Four."

Curran noted that the commission simply hasn't had the resources to conduct audits on all restricted license applicants, making it difficult to determine if gaming was "incidental."

"There should be a line where we can say, 'This is what we will make our decisions by,"' Curran said.

Sean Higgins, president of the Nevada Retail Gaming Association, disagreed. Rather than providing certainty, he believes the commission only made the restricted license approval process more confusing. License applicants outside of the Big Four make up only a tiny fraction of all applications seen each month, he said.

"This is just window dressing ... I don't know what changed," Higgins said. "I think the commission was just so far into this that they felt they had to do something, for whatever reason."

Higgins also wondered why some businesses were left out.

"I can't think of any viable argument as to why they shouldn't be allowed in liquor stores," he said. "You won't have anyone in there under 21."

Wagner argued that trying to clamp down on the spread of gaming went against Nevada's culture and history.

"No one has contacted me about slots encroaching on their everyday lives," Wagner said. "I think it is part of our history, part of the fabric of our society. Personally, I am not ashamed of our history.

"Clearly, I think this should continue to be decided on a case-by-case basis."

The commission also adopted a regulation banning advertising that was "false or materially misleading." That regulation took effect Thursday.