Nevada moving toward letting private labs test new casino games

Sam Morris

Gaming Control Board Chairman Mark Lipparelli talks to the media after testifying before the Senate Finance Committee during the second day of the 2011 legislative session Tuesday, February 8, 2011 in Carson City.

In a bid to stay ahead of the rapidly increasing pace of technological advancement, the state Gaming Control Board on Wednesday conducted its first public workshop to amend regulations to allow independent laboratories to test new casino games and wagering systems for licensing in the state.

About 30 gaming industry representatives attended the first public hearing on amendments to Regulation 14, which sets rules for manufacturers, distributors and operators of inter-casino linked systems, gaming devices, new games, slot metering systems and cashless wagering systems.

Enabling independent laboratories to test games and systems will allow the state’s gaming technology experts to focus on establishing policy, certifying the labs and better understanding the technology, as well as preventing licensing approval bottlenecks that could occur with the anticipated increase in applications from Internet gambling companies.

The first round of public hearings yielded no complaints or concerns about 10 new sections of regulations listing registration and reporting requirements for prospective labs, the registration process and how regulators will determine the suitability of owners and operators of lab companies.

Currently, companies wanting to introduce a new game or system would go directly to the state, which has maintained its own gaming lab for years.

Under the system that would be established once the new regulation takes effect, the state would certify and license labs that would conduct the testing and forward certification documents to the state, which would still have final approval over whether a game is acceptable or not.

The Gaming Control Board and the Nevada Gaming Commission are expected to conduct public hearings on the new regulations in March. The commission could consider approval in March or April. A bill signed into law by the Legislature last year mandates that independent testing begin by the end of May.

State Gaming Control Board Chairman Mark Lipparelli said he doesn’t know how many laboratory companies would seek licensing by the state, but there are at least two with a presence in Las Vegas that are anticipated.

Lakewood, N.J.-based Gaming Laboratories International, the largest independent gaming lab in the world with offices on six continents, and BMM Compliance, an Australian company with a Las Vegas office, are expected to apply.

Anticipating a smooth approval of the regulations, GLI on Wednesday announced plans to expand its testing staff by 100 people over the next six months, most of them in labs in Las Vegas and Colorado in support of Nevada’s new rules.

Another advantage to game and system producers will be that an independent lab would be a one-stop shop for companies seeking licensing in multiple gaming jurisdictions.

While each gaming jurisdiction — GLI works with 130 and Lipparelli estimated there are about 200 worldwide including tribal casinos — has its own set of standard, a company would only have to go to one lab to get certification for multiple locations.

Nevada won’t have to compromise its standards, and each jurisdiction looks for diferent things when determining whether a game or system is suitable.

Anticipating that Nevada’s testing lab would shrink, Lipparelli said, about seven or eight employees either left or were reassigned and weren’t replaced. Laboratories that seek certification by the state will have to pay the cost of the licensing investigation.

Lipparelli, who lobbied for the use of independent labs before the Legislature last year, said the move would be important for the state because it anticipates a number of companies to seek licensing for Internet gambling, which was approved by the Gaming Commission in December.

He said 16 companies have filed applications for Internet gambling licenses and seven have already been assigned to Control Board agents for investigation. He expects the first licensing hearings on Internet gambling to occur by summer.

The Nevada testing lab has tried to maintain a 30-day turnaround on game and systems testing. Independent labs should have more flexibility than the state in hiring additional engineers and testers should there be an onslaught of applications for online systems.

Lipparelli noted that economic development experts anticipated more high-paying jobs for the state if Internet gambling were approved. That appears to be the case with GLI, which on Tuesday sought sales tax abatements and deferrals and testified that it would expand by 80 jobs with an average wage of $20 an hour.

BMM Compliance also says on its website that it is seeking test engineers.

GLI said the prospect of Internet gambling, as well as approvals for casinos and new lottery games in Ohio and Illinois and the company’s desire to keep its turnaround time the best in the industry, are driving it to push the number of testing employees to 750 in 20 offices worldwide.

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