The long-standing debate over the issuance of restricted gaming licenses to slot parlors boiled over at today's Nevada Gaming Commission meeting in a heated policy discussion between Commissioner Randolph Townsend and Chairman Peter Bernhard.
Bernhard said the actions of Townsend, a former state senator, "embarrassed himself and embarrassed the commission," and "it may result in him being disqualified."
When the commission considered issuing a restricted license for three separate Dotty's locations in Las Vegas and North Las Vegas and a license for Molly's on Durango Drive, Townsend made a motion to license the properties for seven slot machines instead of the requested 15.
Townsend suggested issuing one-year provisional licenses that would allow the properties to determine how much of their revenue came from gaming and allow them to apply for additional machines if they could prove gaming was ancillary to the primary business.
The licensing of properties such as Dotty's has been a hot topic, with nonrestricted licensees — major casino companies and larger properties with more than 15 slot machines — saying it's unfair for slot parlors to generate gaming revenue without having to invest in hotel rooms and restaurants as required of nonrestricted licensees. Nonrestricted licensees contend that gaming is the primary business at slot parlors.
Earlier this year, the Nevada Legislature approved Senate Bill 416, which sets more restrictions on restricted licensees.
Townsend said current laws say seven machines are allowed for taverns, saloons and bars, but the commission can authorize up to 15 on a restricted license. Townsend issued a private memorandum to other commissioners saying he wanted to return to the letter of the law and license only seven slots at bars.
Townsend said when bars receive business licenses from county and municipal governments, they must apply separately for a gaming license. But it's become assumed that bars are going to get 15 slots, the maximum allowed on restricted licenses. But Townsend said "abdicating our authority to local government is inappropriate."
While explaining the reasons for his motion and vote, Townsend clarified that he was not being critical of previous Gaming Control Board and commission votes recommending higher numbers of machines.
But the normally mild-mannered Bernhard was clearly agitated with Townsend's statements.
Bernhard was upset that Townsend raised the issue as part of the four restricted license requests, saying the "forum was inappropriate."
"I think Commissioner Townsend has made a major mistake by making this a policy discussion," Bernhard said.
Bernhard's point was that if Townsend didn't consider the circumstances of each case that he could become ineffective as a regulator.
Townsend's motion to allow seven slots at the four properties failed in a 3-1 vote, with Commissioners Tony Alamo and John Moran Jr. backing Bernhard. The license allowing 15 machines passed 3-1.
Following the blow-up on the issue, Bernhard announced that he was postponing action later in the meeting on the adoption of proposed amendments to regulations regarding exemptions for restricted licenses. Instead, the commission will conduct workshop meetings to receive industry opinions on proposed amendments to the regulation.
Representatives of the Nevada Resort Association and the Nevada Restricted Gaming Association also requested an opportunity to weigh in on revised regulations before approval. Proposed changes to Regulation 3 also would include measures to ban sports book kiosks in taverns and bars.
Following the hearing, Townsend said he and Bernhard have been on opposite sides of the Dotty's debate since it was first raised.
"It happens," he said. "It's going to happen on other issues, too."