Our industry makes every effort to collaborate with regulators at all levels in order to ensure the type of tough regulatory environment we understand is essential to the gaming industry’s existence. In order to stay on top of the rapidly evolving technology embraced by our industry, the American Gaming Association (AGA) continues to discuss and review regulation. Recently, we have taken a number of new and important steps in this direction, including releasing 10 recommendations for broad-based regulatory reform. Advancing regulatory reform will remain one of the AGA’s top priorities over the course of 2012.
In 2011, we organized a task force of compliance officers, lawyers and other industry experts, including former and current regulators, from the AGA membership to identify necessary regulatory reforms and to determine practical opportunities for change. The result was a white paper, titled “Improving Gaming Regulation: 10 Recommendations for Streamlining Processes While Maintaining Integrity,” that advocates for broad-based regulatory reforms and state-specific improvements. It represents a significant contribution to the existing dialogue about regulatory reform that has been taking place across the country.
The recommendations in the paper focus on improving the licensing process, simplifying the gaming licensee’s ability to gain access to financing, reforming regulation of gaming machines, and modifying or eliminating unnecessary red tape and reporting requirements. The 10 recommendations, which are explained in greater detail in the report, are:
1. License terms should extend for at least five years.
2. Increase the use of uniform license applications.
3. Allow waivers from licensing or registration requirements for those institutional investors holding less than a 25 percent ownership of a license.
4. Increase the use of “Shelf Approvals” for debt transactions and public offerings.
5. Require no more than registration of outside directors.
6. Eliminate unnecessary regulatory filings.
7. Update licensing procedures and practices.
8. Eliminate prescribed Minimum Internal Control Standards (MICS).
9. Eliminate prior notice or pre-approval of the shipment of electronic gaming machines.
10. Reduce the number of pre-approvals for aesthetic changes to electronic gaming machines.
We believe these suggestions are necessary and vital to the evolution of our industry, due to the fact that many current gaming regulations were developed decades ago and are not as efficient as they could be. In some cases, older regulations create more work for both regulators and casino companies, cause an economic strain on the gaming industry, and hinder its ability to compete with other forms of entertainment.
The AGA has already begun efforts to encourage implementation of regulatory reform at the state level by delivering the final list of recommendations to every regulator and enforcement official in every U.S. commercial casino jurisdiction. Several regulators have responded positively, including Nevada Gaming Control Board (NGCB) Chairman Mark Lipparelli, who directed his staff to prepare a matrix of analysis of NGCB’s performance on the reforms identified in the white paper. Also, Nevada Gov. Brian Sandoval convened the Gaming Policy Committee to examine current regulatory technology and work toward modernizing the industry. We are aware of similar conversations taking place in many other states, including Missouri, Mississippi and Iowa.
Our work on broad-based regulatory reform did not stop with development and distribution of the white paper. The AGA is also in the process of creating a web information portal that will index resources and outline best regulatory practices nationwide. The portal will be a central hub for the distribution of information on reforms that have been suggested and implemented.
The AGA also is working to capitalize on immediate opportunities for state-level reform and start a deeper dialogue with regulators on larger reform objectives. In the short term, the AGA is working with state gaming associations to establish priorities for reform measures and initiating direct conversations with regulators. As appropriate, the AGA is also working to develop proposals for the 2012 legislative sessions and identify key sponsors and advocacy strategies.
In the longer term, the AGA is developing plans to create a forum for both domestic and tribal regulators, as well as industry leaders, that would examine regulatory challenges and develop innovative strategies to address them. This forum would work to establish best practice protocols for gaming regulation and develop educational programs for regulators, providing a neutral forum for exchanges between industry and regulators.
There is no doubt that regulation is an important and vital part of the gaming industry; without it, our industry would not be as strong. The AGA, state gaming associations and individual members are collaborating in the months ahead on our efforts to streamline and improve the rigorous and effective regulation that is a hallmark of our industry.
Judy L. Patterson is the senior vice president and executive director of the American Gaming Association (AGA). In this capacity, Patterson administers the association’s day-to-day activities and has set up industry task forces to study issues as diverse as taxes, regulatory issues, communications and responsible gaming.
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