Regulators told Nevada ‘is no longer the gold standard’ due to slow gaming equipment approvals
After hearing from several speakers during Tuesday’s public workshop looking at ways to speed up the approval process to bring new products to Nevada casino floors, Gaming Control Board Chairman Kirk Hendrick went to a whiteboard and jotted down some of the ideas and suggestions.
Following the nearly three-hour meeting in Las Vegas, Hendrick said the board’s staff had several action items to consider, including comparing Nevada to other states and finding ways to reduce the number of steps in the approval process.
“A lot of them, in my mind, [are] going to require further conversation,” Hendrick said. “I was happy that everybody showed up in the right spirit.”
The public workshop session was scheduled in response to Gov. Joe Lombardo’s State of the State address in January, when he called out the board’s testing lab, saying that “concerns have surfaced” over the approval process.
Several speakers echoed the governor’s remarks that gaming equipment is introduced more quickly in other states, which puts Nevada at a disadvantage.
Gaming technology pioneer John Acres said the state’s system — where new gaming products are put through a field trial on casino floors — is antiquated and needs to be streamlined.
“All new products have flaws and many are revealed during a field trial,” Acres said. “Before a product can be modified to fix a flaw, the modification itself must be certified by the control board. Each modification takes four weeks to 12 weeks to accomplish.”
Acres said the field trials often take six months to 24 months to complete.
Former Gov. Bob List, who serves as a board member for Acres, told the control board that Nevada is “no longer the gold standard when it comes to innovation.” List suggested that Nevada look at the approval process used by other state gaming regulatory agencies and how they approve new innovations.
“[Other states] have learned from us about licensing and investigative techniques and our standards for suitability,” List said. “We can now learn from them on innovation because we have fallen behind.”
Daron Dorsey, executive director of the Association of Gaming Equipment Manufacturers (AGEM), said legislation was passed in 2015 that allowed the control board to use independent test labs to certify new gaming equipment and technology. He said other states and tribal gaming operations rely solely on independent test labs.
Dorsey said Nevada has not kept up with more advanced approaches that have been developed and adopted by other gaming authorities
“Those jurisdictions adopted a product approval methodology that recognizes gaming technologies and the national and global marketplace,” Dorsey said, adding that certain states are now “preferred venues” for the early introduction of new gaming products and compete with Nevada for customers.
“We can and should adopt a more collaborative approach to avoid further delays or deterioration of Nevada’s place in the U.S. when it comes to gaming technology,” Dorsey said.
Jim Barbee, chief of the board’s technology division, which oversees the testing lab, addressed Lombardo’s comments for the first time publicly, saying the state’s strict gaming regulations and requirements still echo Nevada’s past, when gaming regulators were driving organized crime out of the casino industry.
“I think a lot of the requirements that we have today are still reflected on [history],” Barbee said. “Do we still need all of the detailed reporting in the various requirements that we have based on the environment that we're operating in today, and not necessarily based on the environment as it was in 1970 or 1980?”
Hendrick said the workshop was the initial step in addressing the governor’s concerns through a free exchange of ideas and solutions. He also wants to hear from the casino industry. Nevada Resort Association President Virginia Valentine said in remarks to the board that the trade organization’s membership was interested in the timelines and approval processes for new equipment.
Hendrick said following the hearing it was important that the control board hear from casino operators on potential solutions, because it’s their casino floors where the equipment is being utilized.