Tuesday, April 17, 2001 | 11:11 a.m.
CARSON CITY -- After legislative action Monday night, Nevada may be the first state to permit Internet gambling, but questions about whether the Web play will become a reality still remain.
Legislators still don't know whether the Justice Department would allow Nevada casinos to market the games over the Internet outside Nevada, and some casinos are questioning the licensing fee of $1 million every two years attached to the bill.
The Assembly Judiciary Committee voted on the Internet gambling bills, Assembly Bill 296 and its companion, Assembly Bill 578, and sent them to the floor late Monday.
The licensing fee is not only seen as a new stream of state revenue, but it also would limit those who could get into Internet gambling.
Assemblyman Bernie Anderson, D-Sparks, said, "We're just not going to open this up for everyone."
Monday was the final day for committees to approve bills that originated in their houses. And they put in long hours, passing or killing measures. The Judiciary Committee closed shop near midnight.
In addition to Internet gambling, the Assembly Judiciary Committee approved a bill for a statewide system of work cards for casinos workers, as opposed to a county-by-county method.
The Assembly Judiciary Committee also passed a bill putting restrictions on youth crews who are required to work along the highways cleaning up trash.
Assembly Bill 27 is the result of six teenagers being hit by a car and killed in Las Vegas as they worked on Interstate 15.
The Senate Judiciary Committee passed a bill calling for a study to open up gambling in time share developments.
Meanwhile the Senate Transportation Committee approved Gov. Kenny Guinn's plan to split the state Department of Motor Vehicles and Public Safety, putting law enforcement on one side and the rest of the registration and drivers license on the other.
The Senate Government Affairs Committee nixed Secretary of State Dean Heller's proposal to change the method assigning electoral votes for president in Nevada.
Now, all of Nevada's electoral votes go to the winner of the state. Heller wanted to make it proportional. The presidential candidate who won the majority in each of the three proposed congressional districts would get that vote.
The Government Affairs Committee also deleted from Senate Bill 565, Heller's plan to allow members of the Armed Services to vote by e-mail.
Senate Majority Leader Bill Raggio, R-Reno, said problems with e-mail voting have cropped up in other jurisdictions.
While e-mail was out for military voting, the Assembly Judiciary Committee agreed to go forward for Internet betting, but some members had concerns.
Assembly Majority Leader Barbara Buckley, D-Las Vegas, questioned the federal government's position on Internet gambling.
Casino representatives said the Justice Department opposes it, but a federal court in Louisiana has found that gaming can be conducted over the Internet.
Buckley said, "I would like us to be the first," but she added she was worried about the state being perceived as doing something illegal.
The measure lets the state Gaming Control Board and Gaming Commission establish the network to allow these casinos to market the play.
The regulations must approved that provide "reasonable assurance" that minors will not be playing the games and that the Internet gaming would be permitted only in states where gambling is lawful.
The bill also includes a provision to make sure Nevada casinos could collect the debts run up by players on the Internet.
Under the fee structure developed by Anderson, Buckley and Assembly Speaker Richard Perkins, D-Henderson, a casino would have to pay an upfront fee of $100,000 when it files its application. The casino would still have to pay the investigative costs to process the application.
Once licensed, the casinos would be required to pay a $1 million license fee every two years. That would be in addition to the 6 1/4 percent tax on gross revenue they receive from the website gaming.
Anderson said, "The gaming properties are not terribly happy about this," but he added they were embarking in a new area.
Harvey Whittemore, lobbyist for the Nevada Resort Association, said the members were concerned about the fee. He estimated there would be only five to 10 casinos that would enter this new field of gambling. But he said the association would not oppose the $1 million license fee.
However, those companies that would supply the casinos with their websites and Internet capabilities, expressed strong opposition to their proposed fee schedule.
The schedule calls for a $250,000 licensing fee for a manufacturer of a gaming device for interactive gaming and $50,000 for each casino it has a contract with.
If the manufacturer participates with the casino in the revenues, it would pay 6 1/4 percent for gross revenue up to $500,000 a month; 9 1/2 percent for amounts between $500,000 and $1 million and 12 3/4 percent on revenues above $1 million. The casinos would pay the monthly tax but deduct from the manufacturer.
Manufacturers of equipment associated to gaming devices or peripheral equipment would pay lesser fees.
Sam McMullen, a representative for the Association of Gaming Equipment Manufacturers, complained this would be a barrier for getting into the business. And he unsuccessfully urged the committee to lower the fees and tax.
McMullen said, "We've been taken to the woodshed."
Perkins justified the high fees for Internet equipment manufacturers saying they are not investing $1 billion as some casinos spent for new resorts. And he suggested this was not a case of overtaxing those in the industry.
Assemblyman John Carpenter, R-Elko, called the bill discriminatory, since no casinos in the rural counties would be able to pay that fee in order to get a license. But Anderson said Internet gambling was not for every gaming operator.
Assemblyman Dennis Nolan, R-Las Vegas, who voted against the fee schedule, said, "We're killing the goose before we get our hands around it."
In other gaming related bills, the Judiciary Committee approved a bill calling for statewide work cards for gaming employees. At present the individual counties or cities handle this chore.
At present, state gaming officials say a casino employee who changes jobs must get a new work card every time. And if the employee moves from one jurisdiction to another, he or she must apply for a new work card. This state card would be good for a worker all over Nevada.
The bill, Assembly Bill 466, sets the maximum fee for a card at $74, what is being paid in Washoe and Clark counties.
The fee would pay for the local government processing of the applicants, an FBI check and an examination of the fingerprints in the state's central repository for criminal history.
In many of the smaller counties, the procedure is not followed, and the cost for a work card is minimal. Under this bill, casino workers in the rural counties could get hit with higher costs.
The Senate Judiciary Committee approved a bill requesting the state Gaming Policy Committee to study whether to permit unlimited gambling in time shares, a growing industry in Southern Nevada.
Sen. Mike Schneider, D-Las Vegas sponsored Senate Bill 419 to open up the market for these time share development to have gambling. At present, he said they are limited to 15 slot machines and a bar.
Greg Ferraro, representing the Nevada Resort Association, said there was concern about the bill. He said the opportunities and the downside need to be examined before this field is opened up.
The committee agreed with an amendment asking for a study, rather than allowing these time shares to have unlimited development, as suggested by Schneider.
The Senate Government Affairs Committee voted down a bill to require state agencies to seek bids from private companies for their printing, in addition from the state Printing Office, which was recommended by Gov. Guinn.
However, Raggio said there was a good crew at the state printing office now and Senate Bill 564 should not be processed.
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