The new chairman of the Nevada Gaming Control Board has a background in gaming. Mike Dreitzer is an attorney and a former deputy attorney general in Nevada; in that role he has represented both the Nevada Gaming Control Board and the Nevada Gaming Commission. A great resume for the Board, but it gets better: Dreitzer has also been an officer for several gaming manufacturers and distributors. It would be difficult to find better qualifications to lead Gaming Control in the third decade of the 21st century.
Nevada gaming regulation came into being in pieces. In the early years, from 1931 to 1945, regulation comprised a license and local fees. The threshold for both was low. After World War II, the state took an increasing interest in the licenses and taxes. The first state agency to be given the responsibility for gaming was the state Tax Commission. The commission employed an agent or two to investigate unlicensed and crooked games. There were no regulations to speak of; the aim was just to collect taxes. The normal criminal code governed the conduct of gaming.
But as the industry and the regulators became more sophisticated, it was clear that more was needed. Key people, as well as the casino operators, needed to be licensed. Nevada wanted to ensure that those running the gambling were honest, did not associate with known criminals, and had adequate financing and a background and ability in business. As the amount of money being generated by gaming taxes grew to be significant for the state’s budget, Nevada also wanted the tax revenue protected. Thus, internal control regulations were introduced. The regulations detailed accounting procedures to ensure that all of the revenue was recorded and reported. It also established standards for licensing, games, and devices.
The majority of Nevada’s regulations were written in the 20th century. The regulations predated the internet, mobile devices, and artificial intelligence. The process of licensing was designed in the time of snail mail. Getting a key license or having a new slot machine approved took time, lots of time. The regulators were in no hurry and the licensees had no alternative. The process was also expensive.
Due to the process, slot machine manufacturers did not put Nevada first on their list for introducing new games, particularly smaller companies. Those companies needed cashflow to fund the manufacturing of games and that comes only from sales. There are no sales before the company is licensed and the game is approved. For the biggies — IGT, Light & Wonder, and Aristocrat, for example — that is not so much of a problem; they have other games already approved and in the pipeline.
It is a cliché that gaming is the most heavily regulated industry in the country. Other industries might disagree. Banking, insurance, airlines, energy industries, and all public companies could make an argument that their regulations are just as difficult and expensive as gaming. Once in a while, gaming does get a break. When Chris Christie was governor of New Jersey, he attempted to guide Atlantic City through a crisis created by the spread of casinos into most of Atlantic City’s feeder markets and the Great Recession. Christie targeted regulation as one of the key points in his strategy. He wanted to make it less expensive and time-consuming. New Jersey’s gaming regulations were more detailed and onerous than in Nevada.
Christie did not question the need for regulation or its value. He questioned its pace and overall weight. Nevada’s new Control Board chairman is bringing that same attitude to Nevada. In an interview, he said, “I think it’s important for regulators in any jurisdiction to work at a faster pace. When it came to lab matters and gaming technology, we weren’t moving at the speed of business.”
It was a great choice of words. Getting a gaming license is not easy. The applications ask difficult questions and require a great deal of documentation. For example, it is common to require three years of bank records, tax filings, and originals of important documents. It can take months to submit, and then it can take a year for the state agency to complete its investigations.
When the chairman of the Nevada Gaming Control Board says regulators should act at the speed of business, it is a big deal. Would it not be a benefit for all of us if bureaucracies acted at the speed of normal activity and not the speed of government?
