You don’t have to travel far through Nevada’s gaming industry without being reminded that the state Gaming Control Board represents the “gold standard” by which all other casino regulators are judged.
Hold your applause and jeers, please; this isn’t a debate on the absolute truth of the matter. Still, the fact remains that not only is the GCB the oldest regulator of its kind, but it has been used as a template and resource by innumerable legal gambling jurisdictions throughout the nation and around the world.
What is undeniable and beyond doubt is that the GCB is under enormous pressure to keep up with an increasingly technologically advanced leisure industry that creates new regulatory challenges on a seemingly daily basis.
Former Gov. Richard Bryan, who served the state from 1983 to 1989, is widely credited for his efforts to set a high ethical standard in gaming regulation. Through the years, some of his successors have reminded the public of the importance of maintaining that standard.
Back in 2011 amid rapid technological advancement in the industry, Gov. Brian Sandoval revived the 11-member Gaming Policy Committee. Standing before a State Bar of Nevada Gaming Law Conference, Sandoval’s words rang familiar: “I hope to sketch a new road map for the journey ahead. We will preserve our position as the gold standard in gaming regulation and in the provision of gaming entertainment. We will be second to none on the globe.”
The committee was created in 1961 at a time when Gov. Grant Sawyer was attempting to keep up regulatory appearances in an industry boiling over with the threat of scandal. Bryan sounded the alarm in the early 1980s, but after he moved on to the U.S. Senate, the committee’s influence began to fade.
I mention the not-so-distant past as a reminder that despite enormous growth and wide acceptance of the gaming industry far outside Nevada, the state continues to play an integral role when it comes to gambling regulation. Not only is it an essential element of legalization, it’s also an important part of the perception of gaming as entertainment.
But that gold standard doesn’t come cheap — and it shouldn’t be gold-plated.
So it was refreshing to watch recently as the state legislature moved forward a bill that provides the Control Board with more than $15 million in new funding to upgrade its information-technology systems. That includes replacing a well-worn computer system, both software and equipment.
For an essential state regulator that’s constantly hustling to keep up with changing times, it was welcome relief.
At a May 19 Senate Finance Committee hearing, GCB Chairman Kirk Hendrick hammered home the importance of upgrading the regulator’s technology. The downside of failing to do so could be dire.
“You have to get off of a 40-year-old computer system or bad things could happen,” he told the committee. He added, “The system is used for running all the Board functions. Every single division uses pieces of this system. It’s way past its retirement age.”
It was a great sales job.
In a legislative session that finds the state flush with cash, thanks in no small part to record profits and taxes from the casino industry, there was money to spend and lawmakers willing to listen to Hendrick discuss the merits of Senate Bill 490 and his request to increase funding from $3.6 million to $13.5 million.
“Through nobody’s fault that I’m aware of and certainly through no fault or misuse of state funds, it’s come to our attention that a further scope of work and deeper-dive analysis needed to be done on how much money is actually required to finish this project,” Hendrick said.
It might have ended there.
But now comes the news via the Nevada Current that confidential documents appear to contradict the GCB’s claims before the legislative committee. The documents raise the specter of substantial issues of inadequate staffing and precarious security safeguards. The article also questions the candor of GCB IT Division Chief Jim Barbee in his testimony before the finance committee.
The legislature adjourned sine die this week and almost immediately went into the first of two special sessions to resolve differences in a budget bill and address the potential public financing of part of a baseball stadium project presented by the Oakland A’s, who have their sights set on entering the lucrative Las Vegas tourism market.
The lawmakers will head home, but with much at stake, including its reputation as the gold standard of the industry, the controversy stirring inside GCB is unlikely to go away as easily.
