Block on new slots worries industry

By Liz Benston (contact)

Tuesday, Oct. 30, 2007 | 7:13 a.m.

A state regulator is worrying that slot machines - already positioned near casino arcades, movie theaters, bowling alleys and restaurants - are creeping into casino recesses that are not sufficiently patrolled.

Regulators don't normally weigh in on the placement of slot machines, leaving it up to casino executives.

But a request by South Point to put slot machines near its second-floor convention hall - far enough from the casino floor that it would need its own monitoring - has been deemed inappropriate by Gaming Control Board member Randy Sayre. His ruling is raising eyebrows in an industry where slots are already in close proximity to nongaming areas.

Sayre's decision could have implications for the way casinos are designed in the future as well as for expansion plans for existing properties.

South Point is appealing Sayre's decision to the three-member board, which meets next week. If the board rejects the slots, the casino can appeal the matter to the Nevada Gaming Commission.

South Point already has a bank of slot machines off the casino floor , in an upstairs area near an arcade, bowling center and bingo room, that is patrolled by security.

Nevada regulations don't prevent the placement of slot machines near nongaming areas such as malls and restaurants. But the rules specify that slots be adequately monitored by security, in part to prevent children from gambling or loitering near slots. Sayre says South Point's new slots could compromise the casino's security because they are located far from the main casino floor. Rejecting the request also gives the company, and by extension, the industry, the opportunity to seek clarification from the other board members in a public setting, Sayre said.

"The issue here is whether or not we are going to allow the continued expansion of gaming devices into nontraditional areas. I'm not saying I have major concerns with this personally. But this issue is big enough that the entire industry deserves some (clarification)."

South Point attorney Barry Lieberman, who appealed Sayre's decision, declined to comment.

Casinos risk hefty fines for allowing children to loiter around slot machines. The Las Vegas Hilton was fined $350,000 in 1998 for allowing kids to stand near slots as they waited in line for the debut of the property's Star Trek ride. And the Forum Shops at Caesars sparked some controversy by letting mall customers spill into a casino pit. But this is believed to be the first time a regulator has opposed the location of slot machines because of security concerns.

Some gaming insiders question whether the board has the authority to make such determinations and fear that regulators could restrict their ability to expand slot floors as they see fit.

Other casinos owned by South Point owner Michael Gaughan have slot machines on a second floor, away from the main casino floor.

But gaming attorney Jeff Silver, who isn't involved in the matter, says casinos shouldn't be too worried about the result.

"The legal definition of a gaming establishment is already expansive," he said. "I don't see this as an industry concern but an individual situation where the burden of proof would require that the establishment have adequate supervision and it's not difficult to police."

In its correspondence with regulators, South Point argued that it would monitor the slots with attendants as well as security cameras, which is more than the typical surveillance required by law.

Sayre, who oversees the board's enforcement division, said the request is the first of its kind to cross his desk since he was appointed to the regulatory body in January.

He said the issue is important enough to warrant a public discussion in greater depth and will use the discussion, regardless of the vote, to create guidelines that will help inform casino executives.

"There's an obligation for the (casino) as well as for the regulatory framework to ensure that the devices aren't posing any type of regulatory risk to the system," he said.