Control Board seeks extra funding

Tuesday, Jan. 28, 2003 | 11:12 a.m.

CARSON CITY -- Nevada needs to spend an additional $1.4 million to hire more people to examine slot machines, mainly because the new breed of machines is more complex and vulnerable to cheating, state Gaming Control Board officials said Monday.

An expansion of the gaming regulators' electronics lab staff is needed to deal with the increasingly popular new machines, which use a cashless electronic wagering system, Dennis Neilander, Control Board chairman, told legislative budget committee members during their review of Gov. Kenny Guinn's proposed $65 million two-year budget for the agency. The budget for the two years that ends this summer is $60 million.

The cashless systems permit a player to insert a paper voucher into the device. The board said these systems might in the future allow a customer to draw money from his or her account in the casino and ultimately, from his or her bank account.

There has been a dramatic increase in the use of the new systems and they carry more risk, Neilander said.

Neilander said there must be adequate testing before the slot machines are put out for play in the public.

"These systems are extremely complex and have control over slot machine pay commands," he said. "They are also vulnerable to cheating that would be difficult to detect."

It used to take regulators about 30 days to examine and approve a new machine; it now takes 50 days. The delays are hurting gaming businesses that are waiting on the machines, authorities said.

The board, in its budget document, said the industry "has put substantial pressure to reprioritize its resources to address this critical need."

Neilander said the faster the approval, the quicker the machines get into play and the more tax revenue the state collects.

There also has been a trend toward more themed slot machines.

"To some extent, the gaming patron has been fickle," said Neilander, adding that the life cycle of a themed machine is short.

These machines also must be examined by the electronics lab, which now has a backlog, he said.

Neilander also said the state is going to face more costs as it takes over more of the duties of issuing work cards to casino employees.

Metro Police will stop issuing the cards at the end of the year. This will mean the state will have to handle an additional 20,000 work cards annually.

A 2001 law revised the work card system. The state or a local government can charge up to $75 for a card that is good for five years.

Initially, Neilander said, the board figured it could do the work with no extra money. But on Monday he said he will need $134,000 in state funds over the next two years. He said the Nevada criminal justice system recently increased its fee by $6 for processing a background check of an individual. And there are other higher costs that were just discovered recently, he said.

Assemblywoman Sheila Leslie, D-Reno, said the Reno City Council is meeting this week and she thinks the city will relinquish that duty to the state, which will probably bring additional costs, she said.

Neilander said local governments will still issue the cards to non-gaming employees and to people who work in businesses with fewer than 15 machines. Those levels of responsibility are tied to local ordinances and those governments will continue to have that responsibility, Neilander said.