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Question of the Day - 15 November 2011

Q:
Regarding a recent post in your Stiffs & Georges blog about the surveillance required for slot machines in Nevada casinos, I remembered seeing slots occasionally in convenience stores, the airport, etc. What are the surveillance requirements for those machines?
A:

Stiffs & Georges blogger David McKee, writes:

None. Seriously, "there’s no surveillance standards for the operator," says Teresa Zellhoefer, deputy chief of the Nevada Gaming Control Board’s Enforcement Division. "It’s a weakness in the regulation."

Let’s backtrack a bit. Gaming licenses in Nevada come in several shapes and sizes, so to speak. "Non-restricted" licenses can be obtained in slots-only (15-plus machines) and slots-and-table-game form. For tax purposes, the non-restricted licensees are then divided into Group One ($5.8 million-plus in annual revenue) and Group Two (less than $5.8 million yearly gross). Surveillance requirements for unrestricted licensees are spelled out in Regulation Five, which can be viewed at the Control Board’s website.

Then there are "restricted" licenses, which apply to locations with fewer than 15 slots. However, your average Kwik-E-Mart or Laundromat or luncheonette isn’t a stand-alone gaming establishment. It leases its machines from a slot-route operator like United Coin. (South Point owner Michael Gaughan holds the coveted McCarran International Airport slot route license.) Due to a loophole in Nevada regulations, there are no surveillance requirements for Group Two operators or for restricted licensees. Instead, it’s handled in what Zellhoefer describes as "a location-specific manner."

At the time it issues a license, the Control Board sets conditions for that location and conducts follow-up inspections to make sure they’re being observed. In some cases, the requirement might just be for a mirror that enables the Kwik-E-Mart cashier to see the slot area and make sure no untoward activity is occurring at the one-armed bandits. "They have to have some coverage. It’s a licensing condition rather than a requirement," Zellhoefer says, explaining that it’s limited to "whatever they [the licensee] can afford. With surveillance technology getting cheaper, that’s getting easier" at slot-route locations in Nevada.

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