Confusion plagues new slot machine regulations

Friday, June 25, 1999 | 11:19 a.m.

CARSON CITY -- Confusion continues to plague a proposed state regulation to restrict slot machines in future start-up businesses such as brew pups, laundries, liquor stores and car washes.

The state Gaming Commission held what was to be the final meeting Thursday on the regulation, which has been in the works for two years. But arguments broke out among opposing lawyers about the language and definitions. The commission then delayed adoption until July at its Las Vegas meeting.

Senior Deputy Attorney General Michael Wilson told the commission, "This is a difficult regulation. There is quite a bit of confusion," among the lawyers.

The regulation, supported by the big casinos but opposed by slot route operators and "Mom and Pop" businesses, would define which types of business would qualify for restricted slot machine licenses.

Attorney Bud Hicks, representing the Retail Association of Nevada, said the proposed regulation "was unfair to small business people." But Bob Faiss, attorney for the big casinos' Nevada Resort Association, said this puts clarity and certainty into the state regulations on what types of business are eligible for a license.

Commissioner Bill Curran, while he was chairman, set in motion the regulation after grappling with what businesses were suitable for slot machines. Until now, the commission considers each application on its own merits.

It consistently denied slot machines for fast food businesses. But there's never been any guidelines.

And there isn't unanimous support on the commission for any regulation. Commissioner Sue Wagner of Reno said she opposes the rule. She said she has not seen any major problem arising from handling the applications on a case-by-case basis.

But Curran of Las Vegas supports a regulation for a clear definition on which business qualify.

This is seen by many small operators as a move by the major casinos to cut off slot machine competition in the neighborhoods -- a motive denied by the big clubs.

The proposed regulation, which would be effective in February 2000, says restricted slot machine licenses would be available for grocery, convenience or drug stores and a bar that sells more than just wine and beer by the drink.

Those businesses could apply for up to 15 slot machines. But a convenience store would be limited to seven slot machines.

Businesses that now have slot machines would be "grandfathered in," meaning they could keep their present license after the new regulation goes into effect.

A person, whose business fell outside the four categories, could still apply but he or she would have to prove that business was consistent with the public policy of Nevada.

Automated bank teller machines could not be placed adjacent to the slots in drug and grocery stores. And the slot machines in grocery and drug stores would have to be cordoned off. And if smoking was permitted in the slot alcove, it would have to be ventilated to remove the smoke from the area.

Bob Bonner, vice president of the 200-member Nevada Tavern Owners Association, questioned the proposal to move the automated tellers machines out of the slot area. He knew it was to keep compulsive gamblers away from the ready-cash machines but he added they will walk, no matter how far it is, to get the money.

His association, he said, has already distributed literature on compulsive gambling.

Sean Higgins, president of the Nevada Retail Trade Association, said the regulation was not necessary. The Gaming Commission, he said, already has the authority and discretion to decide when a business is not suitable for a slot machine license.

Higgins also noted the regulation on the placement of automated tellers applies only to restricted locations, not to the major casinos, where there are handy cash machines available.

But Faiss, whose association represents many of the major casinos in Las Vegas, said the commission still retains authority to decide if a business was suitable for slot machines. "That flexibility is retained by the commission," he said.

David Arrajj, also representing the resort association, said this regulation was "entirely appropriate." He noted the National Gambling Impact Study Commission opposed "convenience" gambling. While the resort association doesn't support the national commission, this issue "does deserve regulatory attention."

Dan Meyer, who runs a small slot route operation called Comstock Games, questioned erecting the walls around the slot area. He said that is an effort to hide the gaming from the public. "You are not protecting them from anything," he said.

"This will limit future competition," said Meyer of Reno.

Commission Chairman Brian Sandoval, clearly exasperated over the delay, said, "I don't want to continue this month after month."

He said he wants the opposing lawyers to meet with the Wilson and hammer out some final language so a vote can be taken.