Associated equipment manufacturers ("AEMs") who do
business in Nevada are soon going to be subject to a whole new
level of gaming licensure requirements. Thanks to the recent
passage of Nevada Senate Bill 38, the Nevada Gaming Control Board
(the "Board") has been granted expanded power to regulate
and license AEMs.
Most gaming jurisdictions lump all gaming equipment manufacturers
into a single "manufacturer" licensing category. Nevada
is an exception; it classifies manufacturers into two groups,
gaming device manufacturers and AEMs.
In Nevada, gaming devices, which include slot machines, are
defined as those devices or objects used in connection with gaming
that affect the result of a wager by determining win or loss.
Associated gaming equipment is anything other than a gaming device
that is tangential to the gaming operation. Examples include dice,
cards, items that report revenue, and equipment used for counting
money.
Under the current Nevada regulatory scheme, gaming device
manufacturers are required to go through the full gaming licensure
process with the Board and the Nevada Gaming Commission (the
"Commission"). AEMs, on the other hand, are not required
to have a Nevada gaming license but are subject to generally much
less rigorous discretionary licensing approvals.
Now, with SB38, the licensing for AEMs will move from
discretionary to mandatory. This does not mean that every AEM will
need to undergo the full licensing process like a gaming device
manufacturer. What the Board envisions is a tiered system for AEM
licensure and approvals, which will consist of different classes of
regulatory approvals or licensure depending on where on the scale
an AEM falls, from full gaming licensure to nothing at all.
This change is also intended to shift the burden for the cost of
any licensing investigations from the Board to the AEM applicant.
This is because in Nevada the gaming applicant is required to pay
the cost of the licensing investigation in cases of mandatory
licensure, but the Board must bear the cost of investigation when
it calls forward an entity or person who is subject only to
licensure on a discretionary basis. Therefore, those AEMs that will
be required to undergo the mandatory full licensing process will
also be required to pay the substantial costs of that licensing
investigation. The rate currently charged by the Board's
investigative staff is $135 per hour, and the gaming laboratory
agents, who are charged with deciding into which classification or
tier an AEM will fall, are now billing their time at $155 per
hour.
Finally, the employees of an AEM are now deemed to be "gaming
employees" and subject to regulation as such.
What this will mean for AEMs will be dependent on the type of
equipment they manufacture and where that type of equipment may
fall within the tiered structure that the Board and Commission will
be crafting. The Board will be hosting workshops where members of
the AEM industry will have the opportunity to provide input. Our
gaming attorneys will be monitoring and participating in this
process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.