Casinos and slot manufacturers reconcile differences in legislation

CARSON CITY - Members of a Senate committee are defending their review of a controversial gambling industry bill, saying the measure figures in determining Nevada tax policy.

AB651, heard Wednesday in the Judiciary Committee, was sought by major Nevada casino operators who are battling slot machine manufacturers over Megabucks and other linked slot networks.

Sen. Jon Porter, R-Boulder City, said the panel should be commended for refusing to get in the middle of the gambling industry dispute.

"We refused to hear a turf battle," Porter said. "We are not a committee to hear contractual disputes. We're here today to hear tax policy."

The tax policy theme was repeated by casino lobbyist Jim Mulhall, who said parts of the original bill were dropped because legislators told the parties to work out their differences among themselves.

But Sen. Terry Care, D-Las Vegas, said publicity over the battle made it look like legislators were "kow-towing" to the warring parties.

"Why is the Legislature the proper forum and not a court room?" he asked during the AB651 hearing.

Casino executives have said the growth of Megabucks and other networked slots could undermine the profitability of Nevada resorts and reinforce a monopoly enjoyed by the world's biggest slot maker, International Game Technology of Reno.

The original version of the bill, sought by the Nevada Resort Association, would have forced the manufacturers to offer such leased games for sale. But that requirement was amended out of the bill.

The resorts' gripe was that lease agreements for slot machines allow manufacturers to make money from the slots without assuming any of the risks associated with actually running a casino.

The compromise developed amid criticism that the debate belonged in private contract negotiations rather than in the Legislature.

Though it's watered down, the bill still mandates that slot manufacturers pay their share of state taxes based on the amount of money the machines generate.

NRA representatives claimed IGT and other large slot manufacturers have been able to make casinos pay the taxes because their dominant market shares give them an unfair advantage in contract negotiations.

The bill also requires that slot manufacturers offer the same games to small casinos that they offer to larger, mega-resorts. Also, it spells out in law the regulations already adopted for such slots by the state Gaming Control Board.

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