Richard N. Velotta
VEGAS INC Coverage
One of the reasons Nevada’s gaming industry oversight is so well respected worldwide is because regulators provide an environment of stability.
Love or hate some of the regulations the state Gaming Control Board and the Nevada Gaming Commission implement and enforce, the industry usually knows where regulators stand on most of the major issues.
The reason for that stability is that regulators are collegial in their work. They reach conclusions through analysis and compromise and, for the most part, there are few surprises when the board or commission meet. But occasionally, board members or commissioners don’t see eye to eye on some matters. It happens so rarely that when it does, it makes headlines. When a board member or commissioner wants to make a point, there can be fireworks.
When licensees get on the wrong side of board member or commissioner, meetings get uncomfortable for the person standing before the board. Former Control Board member Bobby Siller, a former FBI agent, was a master at getting to the heart of an issue with a pointed line of questioning.
It was always interesting to watch Siller put his law enforcement skills to work when questioning licensing applicants about their past brushes with the law. When Control Board investigators uncovered something suspicious in an applicant’s record, it was only a matter of time before Siller rooted out the details.
I remember when Siller took on licensees from the Hard Rock Hotel over their edgy advertising campaigns and whether the campaigns crossed the line of decency, discrediting the casino industry. He was aggressive in his efforts because he felt Hard Rock executives had misled him in their marketing efforts.
A majority of the members of the Gaming Commission are lawyers and, like Siller, use their cross-examination techniques when questioning applicants.
Last month, the unresolved issue before regulators involved the controversy of the Dotty’s casino chain. The Dotty’s business model is in a regulatory no-man’s-land. To the chain’s owners and the owners of various clones that have followed, the slot machines in the building are incidental to the business of being a gathering place for people to drink and socialize.
But locals casinos that have lost business to chains like Dotty’s don’t see it that way. They see the gambling as the primary business and say Dotty’s should be required to provide some of the same amenities the locals joints must provide, such as bars and restaurants, in order to be licensed. The matter has gotten stickier because commissioners have approved licenses for Dotty’s before so there’s precedence to continue issuing them to remain consistent. At the July commission meeting, the board reviewed proposed new regulations that would establish rules for places like Dotty’s to be licensed and operated.
The Nevada Resort Association proposed a regulation that would establish new guidelines for places like Dotty’s. Commission Chairman Peter Bernhard, who sympathizes with Dotty’s position, spent about an hour questioning the Resort Association’s spokesman—who happened to be Station Casinos executive Scott Nielson.
It was clear that Nielson was uneasy about being grilled by Bernhard. He and his Station colleagues have a solid regulatory reputation and he wasn’t used to such intense scrutiny.
What made matters worse was that there were two versions of a Resort Association regulation circulated prior to the meeting in addition to a Control Board version. Things became even more complicated when Commissioner Tony Alamo offered his own version of a proposed regulation. Three hours after the Dotty’s regulation discussion began, commissioners concluded they wanted more time to sort out what would be in the best interests of the industry as a whole.
And that’s what’s scheduled to happen Aug. 25 when the commission next meets. Based on what commissioners said at the July meeting, the decision is leaning toward some kind of new requirements for operations like Dotty’s.
The four versions of the regulations are posted on the Gaming Control Board’s website. The hearing that began at July’s meeting will be continued.
Most observers agree that regardless of which side wins, lawsuits are likely to be filed in the aftermath of one of those rare occasions when the stability of the state’s regulatory regime will be tested.