Q&A: Patricia Becker

Steve Marcus

Gaming guru: Patricia Becker, executive director of UNLV’s International Gaming Institute, is shown at the academic facility. The nonprofit institute trains gaming industry professionals and regulatory agents.

By Richard N. Velotta (contact), In Business reporter

Fri, Nov 13, 2009 (3 a.m.)

The executive director of UNLV’s International Gaming Institute is a woman who has worn many hats in her three-decade gaming industry career.

Patricia Becker, a lawyer by trade, has counseled regulators, trained regulators, has been before regulators, has worked with regulators and has been a regulator.

She started her gaming career in 1979 as a lawyer with the state attorney general’s office, assigned to the state Gaming Control Board and the Nevada Gaming Commission. In 1983, she began a two-year stint on the Control Board during which she led, with a federal legal team, the first successful prosecution of a slot-cheating ring.

She’s also been in a corporate boardroom, serving as a senior vice president, general counsel and secretary for Harrah’s in Reno and senior vice president of corporate affairs for Aladdin Gaming. She currently serves as a compliance officer for slot manufacturer Bally Technologies and is an industry consultant in addition to directing the gaming institute at UNLV, which trains regulators.

She took a short break from gaming from 1993-95 to serve as Gov. Bob Miller’s chief of staff.

The gaming industry’s largest trade show, the Global Gaming Expo, is in Las Vegas this week and Becker talked with In Business Las Vegas about the UNLV institute, gaming industry trends and how the economy is affecting business.

IBLV: You’re the executive director of the International Gaming Institute at UNLV. Explain what that is and what you do.

Becker: We do training programs both for the gaming industry and for regulators.

And some of these regulators come from all over the world, right? Are there a lot of regulators who come here or is it mostly industry people?

Actually, both. We do a program — we did it for the first time last year — where we actually scholarship regulators that are in policy-making positions and they come for a six-day training class. It’s very intensive. We’re trying to assist them in understanding how to develop policy as a regulator.

Where do they come from?

We had some from Mexico. I believe we had one from Italy, from South America and then from throughout the United States. We had invited Korea because they were considering adopting gaming. Usually, when a jurisdiction is considering adopting gaming, they will contact us to learn about what we do. We also do custom programs for many people throughout the world. Usually in the summer, we’ll have people who will come here and they actually select courses from our course catalog, and they’ll come for two or three weeks at a time; we even house them sometimes in the dorms and we’ll train them for a few weeks in whatever specific area of the industry they want to learn.

What is the relationship between the IGI and UNLV Center for Gaming Research?

We do research here at the gaming institute. Dr. Bo Bernhard is in charge of our research division. Sometimes it’s just research, sometimes we’re hired privately by regulatory agencies. Other research he does via grant, and a lot of it’s on responsible gaming.

The institute has an important role for the annual Global Gaming Expo. Tell us about that.

We certify the training courses both at the G2E here and the G2E Asia (in June). In addition to that, we participate on the board that puts together the programs. One of the things we assist in is that we do a scholarship program for students. They can apply through the expo, through Reed (Exhibitions, the show producer) and they can apply for a scholarship to attend G2E. Successful applicants get to attend all of the training courses for free. In addition to that, they get on the (trade show) floor for free and, in addition to that, we always try to have them here at the institute and do a little training program with a UNLV professor. So it’s one of the things that we like to be able to offer for students worldwide. Obviously, it’s very easy for UNLV students to apply.

What are some of the challenges the institute faces because of the challenging economic times?

On our faculty front, we either use university professors or we will bring in people from the industry, if they’re specialized, and ask them to assist and have them teach. The difficulty, currently, is that many companies have cut their training budgets. On the private sector that has been difficult, although we’re starting to do more online courses, so we’re hoping to develop that side of the business. On the regulatory side, many states have cut back and are not allowing people to fly outside of the state for any purpose, so that’s been difficult. However, we have a lot of tribal gaming regulators who attend our classes, so we still seem to be able to keep them going, and we’ve been able to maintain most of our classes ongoing. It hasn’t really hit us yet. We’re self-sufficient and don’t get university funds, so we have to earn whatever the salaries are that we’re paying for staff. And then, we’re a nonprofit so any additional income that we earn, hopefully, will go back to assist the hotel school and UNLV.

Where does the money come from?

From the classes. From the registration for the classes. We earn enough money to pay for our staff.

But the nonprofit status does generate funds elsewhere?

That’s our goal. Our goal is to generate funds that we can give back to the university and to the hotel college in other ways.

Las Vegas has been considered the top gaming destination in the world. Is that still true?

Yes, I think that is still true. I think it will probably always be true. We’re lucky that we have the history so when people talk about gaming or think about gaming, the first thing they usually mention is Las Vegas. And then, all you really have to do is look up and down the Strip. You just can’t duplicate that. Anyone who’s in the industry wants to come visit, and it’s just such a great place to come for a vacation.

What’s the bigger threat to Las Vegas’ dominance in the industry: Macau? Tribal casinos across the country? Or another venue we haven’t talked about?

I don’t know if a jurisdiction is a threat. For a long time, Nevada thought that if there was going to be gaming anyplace outside of the state, it would be a threat, and in fact, it turned out not to be a threat, but in some ways, to be an asset. I think that our operators are bright enough to turn those threats into an asset, either by doing business there or trying to build on the business or reputation elsewhere. A threat is always that there would be a gaming jurisdiction that has such a serious issue that the general public questioned the legality of the games or the legality of how they were being treated. I think that is a bigger threat. It’s the integrity of the games, not the competition. Our industry, and Las Vegas specifically, seems to have thrived on competition.

How has the casino industry changed as a result of the down economy?

First, hiring. I know for the students who are trying to get internships or just trying to get work, it’s difficult to get a job out there right now, so that’s tough. I also think that over the last 10 years, the industry has earned less from gaming revenue and has added other amenities where they’ve earned more income from the other amenities. But oftentimes, those amenities are really focused for the higher-end people who have discretionary income. So I believe in this downturn that it may have been a little more difficult for our gaming companies because it’s not just gaming that has to rebound. You have to get a rebound with people who feel like they want to spend more money in a restaurant or want to buy higher-end clothing or apparel, or go to a spa. That means you have to affect overall consumer confidence more than just getting somebody in here who says, “OK, I want to splurge and gamble for a few days.”

How long do you expect it to take for the industry to recover from the recession?

Well, you know, as the stock market has bounced back, people are starting to spend again. The unease is not what it was six months or a year ago. I also think a year ago, people, almost everyone, were worried about continued employment, and now I think the people who have been employed are less worried about that. However, here in Las Vegas, we’ve been hit so hard in the construction and the homebuilding and that part of our industry, I think it’s still going to take another year before we see a comeback.

Has the industry learned something about how its finances have to be handled as a result of the recession?

You know, it’s so easy to look back and think, “I wish I would not have done that.” I’m not sure if lessons for the industry are any different than lessons for any consumer, which is, obviously, that it’s always easier if you have less debt. However, there’s a reason for debt. Expansion comes from debt. All of the building and the increased number of rooms came from debt. This economy turned so quickly, I don’t know why the gaming industry should have foreseen that turn more than any other industry.

But shouldn’t they have? In your own experience, you were the chief financial officer of the predecessor to Planet Hollywood, which bought the Aladdin in a bankruptcy sale. The property was heavily leveraged and was hurt by new capacity in the market and the post-9/11 slowdown. Why didn’t Las Vegas operators learn a lesson from Aladdin’s troubles?

I think they learned. I think everyone learns. It’s just a matter of trying to make informed decisions and you’re trying to make decisions about two or three years in the future. You know, when you’re building a new property or if you’re adding rooms, it’s not like you start one day and they open the next. There’s a learning curve and a process. Everything in Las Vegas was such a boom for so long. There were so many jobs, so many people moving here. I think to have the downturn hit so rapidly was unpredictable. The gaming industry is not like some industries where the industry is becoming obsolete. Gaming is not going to become obsolete. It just needs to get in the recovery mode when consumers feel like spending whereas some industries end up just becoming obsolete.

What do you consider the biggest issue facing the casino industry today?

Wow. I think the integrity is always the biggest risk just because it can affect everyone, but I think the biggest issue is the financial issue for all of the operators.

There’s been a lot of hand-wringing over what’s going to happen when CityCenter opens, whether the flood of new rooms is going to unfold as overcapacity or whether it’s going to be a must-see attraction that will drive visitation. What do you think will happen?

It’s going to take some time until the consumer confidence comes back. However, it’s going to be fun to have something new in Las Vegas. It’s going to be fun to be able to talk about something other than rooms available. That kind of excitement always bodes well. I think it’s a good thing that we’re having projects that are coming to fruition, to completion and opening. We did have some projects that decided not to go forward, so this is the better part of what’s happening. This is good news, again.

What will be the impact on other properties when CityCenter’s doors open?

I think it’s going to be tough for a period of time. Filling rooms already is more difficult than it has been in years past, and there’s going to be some growing pains as there usually is with new properties.

Let’s look at some other industry issues. Do you think legalized online gambling will ever become a reality in the United States?

Yes, I do at some point. I think over time, people understand the Internet more. I think the security issues (will be better understood). Many states and the federal government are going to be looking for revenue. It seems like we’re going into the expansion mode on gaming again. More states are thinking about allowing slots in bars and at horseracing tracks. I think it’s only a matter of time until people are comfortable on the Internet basis and realize they want to be part of the revenue stream within any state or the U.S.

How could the regulation of online gambling represent opportunities for Nevada?

We actually use agents from the Gaming Control Board to teach for us here at the institute. One of the reasons we do that is because they are so well trained and so well regarded on the regulatory front. So if you’re going to regulate something new, yes, I think it’s a great opportunity for Nevada. It’s not just the oldest jurisdiction, but it’s a jurisdiction that had to learn to regulate when gaming was already in the state, which is not an easy thing to do. And they’ve already overcome so many difficult issues so, yes, I think that it may be an opportunity for Nevada.

As a former regulator, what’s your take on the current focus on problems in several properties’ nightclubs and lounges?

When you see the Gaming Control Board come on with that kind of strength on an issue, it’s usually not because something happened yesterday. It’s because things have occurred over a period of years and they got to a point of frustration where they felt like they needed to do something to get the industry’s attention. And so they either must have, on their own, been doing internal investigations or received complaints. But they clearly saw this as an issue that needed to be fixed. I believe that’s why they’ve come out with letter opinions, they’ve had workshops and they’ve been pretty specific in becoming open about what their expectations are if you’re doing business on a gaming property.

So are you pretty comfortable about the procedure that they’re taking on this and that they’re doing the right thing?

I think it’s a start. I obviously don’t have the facts that they have. I know about the facts of one or two complaints that they filed. However, I assume that when they take on the industry like this, that it’s been an issue for them at other properties. It’s tough. It’s a very fine line with the next generation, these younger gamers. Obviously at these pool parties, it’s become a huge revenue area for the gaming company. The industry usually is ahead of the regulatory front and they need to be, that’s what they should be doing, they need to be pushing. I think just enough happened where the regulators decided they at least wanted the industry to take a better look at what these people who were operating the clubs were doing.

One of the frustrations I hear from regulators is that technology advancements move faster than they can keep up with them. Is this a problem?

Many jurisdictions don’t have their own labs any more. They have outside labs that manufacturers utilize to confirm what is being approved within a jurisdiction. In Nevada, they have chosen to continue having their own lab. I think, absolutely, they have to stay ahead of it. Because with everything that’s coming forward from a manufacturer, all that’s going to do is, arguably, increase play because they’re developing things they think they can sell to the industry that the industry is purchasing because they think it’s going to increase play. And that’s everyone’s goal. So they have to stay abreast. They have to be out there and they have to have an approval process that meets with the rapidly changing industry.

Do regulators have the resources to keep ahead?

My recollection is that they went to (the) interim finance (committee) prior to the last session and got a number of new engineers and a new building. It seems to me, at this point, that they’ve got the staff, and they’ve got the building and they’ve got the technology. Now they just need to put it together to get the process moving as rapidly as they can for approval.

You referenced earlier that the institute has an interest in “problem gambling” issues. Does the institute have a role in or stance on how well companies participate in those programs?

We can offer courses in responsible gaming. We can tell them, teach them or train them on what different jurisdictions do in regard to responsible gaming. We can also have professors who will talk about the latest research in responsible gaming and what has worked and what hasn’t worked. One of the issues is sometimes people think that intuitively they can address this issue and it’s not what you would intuitively think. It’s an addiction issue like any other addiction and the more research, the more facts you have, the better you can address it. For both the industry and academia, the goal here is the same: You want to assist problem gamblers as you would want to assist anyone with an addiction issue.

Is the state of Nevada doing enough to address problem gambling?

I think the state actually has really stepped up. They have allocated funds for grants so they are funding research in the area. And I know the Gaming Control Board has worked diligently with the industry, and the industry has really taken a leadership role in trying to address this issue. So, yes, I do think they’re doing enough.

Has the time come for Nevada to reconsider allowing slot machines in grocery stores, convenience stores, even the airport?

You know, it’s interesting because that issue has been around and they’ve tried to resurrect it on numerous occasions, and it’s always the same conclusion, which is we continue to permit machines in those types of locations. I think there are a couple of reasons for that. One is that Nevada came from being “the Wild West” and it’s very entrepreneurial. But the other thing is that now you’re seeing other jurisdictions are expanding to allow gaming in bars and thinking about gaming at racetracks, gaming in airports. So what you’re having now is other jurisdictions adopting what we have. So maybe it’s come full circle in the opposite direction.