Legislative fight highlights angst over sports betting kiosks

By Cy Ryan

Tuesday, March 26, 2013 | 6:41 p.m.

A key senator says he doesn’t think the small slot machine arcades and taverns that offer sports and horse race betting kiosks are siphoning off business from major casinos.

Sen. Tick Segerblom, chairman of the Senate Judiciary Committee, says these small, restricted slot machine operations have resulted in more race and sports betting and are not “cannibalizing" the big casinos.

Segerblom, D-Las Vegas, said Tuesday he has not yet made a decision on Senate Bill 416, introduced by his committee to stop the taverns and slot machine salons from taking these wagers.

The bill is backed by the Nevada Resort Association, a group of major casinos that believes these restricted licensees are hurting their “handle” in the growing area of sports betting.

A restricted licensee can have up to 15 slot machines but cannot have games such as 21, craps, roulette or baccarat.

But through an administrative order of the state Gaming Control Board, they may offer wagering on sports and horse racing in the neighborhoods, letting sports gamblers circumvent major sports books.

“Nobody gets on an airplane and flies to Las Vegas to play on a kiosk in a tavern,” complains Peter Ernaut, representing the Nevada Resort Association.

But Joe Asher, CEO of William Hill Corp. that has 82 kiosks accepting wagers in these small businesses, calls SB416 an “anti-competitive” bill.

In 2012, the 190 sports pools statewide won $170 million, an increase of 20.8 percent from the previous year.

Ernaut says the “reason it is important to distinguish between nonrestricted resort licensees and restricted licensees is the economic impact on the state.”

These major hotel casinos spend millions of dollars building horse and sports betting centers.

“If the Legislature doesn’t make a decision today, tomorrow we are dealing with them in every imaginable type of business” such as car washes and grocery stores, said Ernaut.

“The foundation of gaming regulation should be quality, not convenience,” he said.

Asher argues that only $600,000 of the $170 million won in sports pools came in these small businesses. That’s one-third of 1 percent, he says.

“There is no evidence the kiosks are hurting the big casinos,” he said. “The NRA is pushing this bill and it is not a good idea.”

He noted bettors currently place wagers in casinos where they have accounts by telephone or computer, and to pick up their winnings, they have to visit the casino.

In contrast, customers can go to their favorite local bar, set up an account, use the kiosks to place their bets and collect their winnings from the bartender or at the kiosk.

Ernaut said this system of allowing bets to be placed in small slot salons and taverns was a pilot program approved by the Control Board and is due to expire June 30.

Ernaut said he wants the bill approved to make it clear these operations are not permanently allowed in the bars and small casinos.