Former gaming regulator says Nevada is and must remain as the ‘tip of the spear’

April 19, 2019 1:49 AM
  • Howard Stutz, CDC Gaming Reports
April 19, 2019 1:49 AM
  • Howard Stutz, CDC Gaming Reports

During his five years as chairman of the Nevada Gaming Control Board, A.G. Burnett regularly interacted with fellow gaming regulators both in the U.S. and throughout the world.

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He understood quickly that, no matter the jurisdiction, “tiny little” Nevada was viewed as the epicenter for gaming oversight.

“I learned that many regulators around the world looked to Nevada for leadership and to set an example on the myriad issues that arise in gaming,” Burnett said during a talk Thursday at UNLV’s William S. Boyd School of Law. “What the regulators do here has a ripple effect throughout the world.”

Burnett, the speaker at the annual Robert D. Faiss Lecture on Gaming Law and Policy, cited several examples of Nevada’s being “the tip of the spear” when it comes to regulatory matters. Nevada was the first state to regulate ownership of casinos by public companies and private equity groups. The state was also the first to allow institutional investor ownership and to legalize Internet gaming.

During his time as Control Board chairman – and as a deputy attorney general representing the board and Nevada Gaming Commission – Burnett cited cases in which Nevada’s leadership addressed federal anti-trust issues, the legalization of marijuana, issues involving problem gambling, corporate compliance, and the regulation of new forms of gaming, such as eSports and skill-based slot machines.

“I believe we continue to be an example of a regulatory agency that refuses to be captured by the industry it regulates, stands firm on its decisions, and has a reputation for always doing the right thing,” said Burnett, who joined the McDonald Carano law firm as a partner in Reno in 2018.

One area where Nevada has an advantage over other U.S. jurisdictions is in making changes to its regulations and policies. State lawmakers set up a system that allows easy flexibility to revise language.

Burnett said potential regulatory changes utilize workshops to gather industry input through an open process. Emergency situations can be handled in a couple of months, and changes to gaming technology can be handled through amendments to the technical standards.

He said regulators in Pennsylvania, New Jersey, Massachusetts and Louisiana were “envious” of the Nevada process.

“We are fortunate that, while Nevada mandates strict regulation and compliance, regulators and licensees can still get together to discuss changes that will make the entire system, and therefore the state, better,” Burnett said.

He cited how Nevada was also the tip of the spear when it came to Daily Fantasy Sports. In October 2015, Burnett issued a notice that the growing activity was a form of gambling and that DFS operators needed to be licensed under the state’s sports betting regulations. The major daily fantasy companies then all pulled out of the state.

“We never had any issue with DFS, but I was aware that they were gearing up powerful lobbyists to eventually lobby our state legislature in order to avoid regulation,” Burnett said.  “We were the tip of the spear on that issue, and we will remain the tip of the spear on many more to come.”

Some of those issues are already surfacing. Sports betting is expanding nationwide – which means Nevada’s model of sports betting regulation is similarly expanding – as well as new gaming technology designed to attract gamers, and a younger demographic that is turning 21.

Digital currencies – and the elimination of cash – are leading to innovative payment methods on casino floors. Electronic wallets are becoming more common, which leads to the question of how the technology will change gaming.

“We must allow changes such as these while still adhering to our mandate to protect the consumer,” Burnett said, adding that regulators need to be given the proper budgets and increased manpower to keep pace.

“Regulators must also be given not just the broad authority to regulate new technologies, but the mandate to embrace them in a careful, cognizant and responsible way that still calls for strict regulation but with a mindset toward enhancing gaming,” Burnett said.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at Follow @howardstutz on Twitter.