Gaming panel shelves ATM slots

By Liz Benston

Friday, May 23, 2003 | 11:44 a.m.

The Nevada Gaming Commission on Thursday blocked a plan to equip slot machines with debit card devices, saying the issue required further study and raised concerns about whether giving people direct access to their checking accounts through gambling machines could create a new class of problem gamblers.

The decision came as the commission approved sweeping regulations requiring all slot machines in larger casinos to install online cash metering systems that will allow gaming regulators to perform faster and more complete tax audits. The much-anticipated rules also pave the way for casinos to expand the use of "cashless" slots and a variety of other systems that can transfer money electronically.

The move to shelve debit card access was based on advice from the three-member Gaming Control Board, which has said that no research has yet been conducted on the direct use of debit cards in slot machines.

The state Legislature in 1995 outlawed the use of credit cards in gambling devices over concerns about gambling addiction. The Legislature also approved the use of debit cards that year. The Gaming Control Board must first adopt regulations allowing casinos to implement the technology.

Major casinos so far haven't pushed the board to allow debit-card slot machines and no one argued for their use Thursday. But the issue was raised in connection with the cashless slot regulations because ATM cards use similar technology to transmit data, Board Chairman Dennis Neilander said.

Under legislative guidelines struck from the regulations Thursday, debit card slot machine users would be limited to withdrawing $1,000 per day. The figure was initially chosen because it conforms to withdrawal limits set by some financial institutions and isn't a measurement of how much gamblers are reasonably expected to spend.

If adopted, Nevada would likely be the first state to allow gamblers to use debit cards in slot machines. The decision would have implications nationwide as other states consider whether to allow debit card gambling. Regulators haven't set a timeline for adopting the debit card regulations.

Gaming policy and problem gambling experts applauded the decision to hold off on debit cards, saying more research is needed to understand how convenience gambling can influence behavior.

"I think they made the right decision," said Shannon Bybee, director of the International Gaming Institute at the University of Nevada, Las Vegas. "I'm not opposed to it but I think it's a new and troubling area. What risk is there for people who may be problem gamblers to put a pipeline into their bank account?"

Implementation of debit cards must be based on sound research, not trial-and-error experimentation, Carol O'Hare, executive director of the Nevada Council on Problem Gambling, told commissioners Thursday.

"What's the relationship between access to a debit card and problem gambling? We don't know."

The Nevada Resort Association, the chief lobbying group for Nevada casinos, also was present to support further study of debit-card gambling.

The decision to approve gambling machines is often based on cut-and-dry technical standards or mathematical formulas, said Bybee, who did not attend the meeting.

Offering debit cards raises a host of policy questions that can't be answered by technicians, he said. Regulators should adopt rules that take that judgment into account, he said.

The Gaming Control Board, for example, now requires slot makers that submit machines with cartoon characters or otherwise youthful-looking themes to submit research showing why their machines won't appeal to children, he said.

The fact that little is now known about problem gambling behavior isn't an excuse to ditch the issue, O'Hare said.

"The fact that you're not seeing research cranked out every day (on compulsive gambling) doesn't mean we don't have the resources in this state to do it," she said. "Research doesn't happen in a vacuum. It happens because somebody says it must be done."

"Regardless of what happens years down the road, the state can say we researched this issue -- rather than be criticized for ... poor public policy."

The Nevada Council on Problem Gambling takes a neutral stand on the expansion of legalized gambling and serves as an education and treatment referral center. Its helpline is posted near cashiers and ATMs in Nevada casinos.

A 1998 law requiring casinos to post such information were based on research showing that people are more inclined to seek help when their play has been interrupted, O'Hare said.

"When a person runs out of money and needs more, that's when the message (about problem gambling) can get across," she said.

At the commission meeting, Neilander said O'Hare's concerns were "duly noted."

Conducting research on the topic should be the burden of the applicant and must be the result of independent study, said Bybee, a board member of the National Council on Problem Gambling.

"A lot of what you have is opinion and it's not all educated opinion," he said. "In the past, so many people who became authorities on problem gambling were either opposed to it or in favor of it and they did their work in many ways to justify their point of view."

The regulations, about two and a half years in the making, require slot makers to adopt a variety of meters to track various aspects of their machines by February 1. Casinos that generate more than $10 million in gambling revenue will have two years to adopt online slot metering systems that can transmit cash information electronically and allow regulators to audit casinos electronically. Regulators have traditionally performed manual audits by reviewing accounting records and slot machine output.

Many casinos have already begun to introduce cashless machines that can accept and dispense paper vouchers instead of coins. Until now, regulators have been using outdated rules to oversee such machines. The new rules govern a variety of electronic fund transfer systems that will one day make slot play more convenient for gamblers, including the ability to transfer money from the casino cage directly to a machine or transfer credits from machines into a personalized casino account. Electronic monitoring systems also benefit casinos by allowing them to better track their customers and market to gamblers, regulators say.