MINUTES OF THE
SENATE COMMITTEE ON JUDICIARY
Sixty-seventh Session
March 17, 1993
The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 1:45 p.m., on Wednesday, March 17, 1993, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Mark A. James, Chairman
Senator R. Hal Smith, Vice Chairman
Senator Lawrence E. Jacobsen*
Senator Mike McGinness
Senator Dina Titus
Senator Raymond C. Shaffer
Senator Ernest E. Adler
STAFF MEMBERS PRESENT:
Dennis Neilander, Senior Research Analyst
Maddie Fischer, Primary Secretary
Marilyn Hofmann, Committee Secretary
OTHERS PRESENT:
William Bible, Chairman, State of Nevada Gaming Control Board
Robert Faiss, Lionel, Sawyer and Collins, counsel for the Nevada Resort Association
Richard Bunker, representing the Nevada Resort Association
Bill Prezant, International Game Technology (IGT)
Jim Avance, Jackpot Enterprises, and its subsidiary slot operations
A. Brian Wallace, Chairman, Washoe Tribe of Nevada and California
Arlan Malendez, Reno-Sparks Indian Colony
Steve Wynn, Chairman, Mirage Resorts, Incorporated
An overview of the three bills scheduled for hearing, Senate Bill (S.B.) 242, Senate Bill (S.B.) 243 and Senate Joint Resolution (S.J.R.) 16 was presented by Senator Dina Titus and Dennis Neilander, Senior Research Analyst. Senator Titus stated she appeared as the Chairman of the Interim Committee to Study Gaming. She indicated the three bills scheduled for hearing were only a sampling of the recommendations which issued from that interim committee.
SENATE CONCURRENT RESOLUTION NO.
59 OF THE SIXTY-SIXTH SESSION: Directing the Legislative Commission to conduct an interim study of gaming.
Senator Titus said during the 1991 session, in which she chaired the Senate Committee on Judiciary, "...it became ever more apparent that gaming issues came in at the last minute before the committee...they weren't well understood...or discussed...." She added many gaming bills were "moved through with little time and understanding." Senator Titus continued:
Concurrently with that, you had the gaming industry changing very fast, not only in Nevada, but across the country, so it seemed appropriate for this body to take a close look at what was happening in gaming...how it affected the state...what were possible future impacts of the changes within the industry.
Senator Titus said as a result of the above, she sponsored S.C.R. 59 of the 66th Session, which when passed led to the establishment of the interim committee. She stated there were 11 senators and assemblymen on the committee and the vice chairman was Assemblyman Gene Porter. Senator Titus pointed out four members of the interim committee who were now members of the Senate Committee on Judiciary, i.e., herself, Senator Smith, Senator Adler and Senator McGinness. She indicated Mr. Neilander was the staff person for the interim committee and assisted in development of the Study of Gaming, Exhibit C, the original of which is on file in the Research Library.
Senator Titus stated five meetings of the interim committee were held, divided between Carson City and Las Vegas. She said questions of regulation, foreign gaming, Indian gaming, taxation, and other miscellaneous gaming policies, including the question of a lottery, were addressed. Senator Titus stated there was extensive testimony from representatives of the industry, state regulators, attorneys, economic experts, scholars, Indian tribes, and a representative of the federal government, Mr. Anthony Hope, Chairman of the National Indian Commission.
SENATE BILL 242: Makes various changes regarding regulation of gaming.
Senator Titus explained S.B. 242 was a bill which includes a number of different regulatory changes, after suggestions were brought to the interim committee by both the State Gaming Control Board (hereafter "agency") and industry representatives. Senator Titus referred to pages 9-10 of Exhibit C, and the "bulleted recommendations" contained therein. She said the rationale for including the recommendations in one bill, instead of many separate bills, was to "put them on the table early" so people will have a chance to look at all of those recommendations in relation to one another.
Senator Titus referred to section 8 of S.B. 242 and said it was not a recommendation of the committee and not part of the report. She indicated it was placed in the bill during drafting and came from outside the committee.
Dennis Neilander, Senior Research Analyst, stated the bill draft was based on the concepts set forth on pages 9-12 of Exhibit C. He stressed the interim committee had voted on these "concepts," not the exact language contained in the bill drafts. Mr. Neilander stated the goal was to produce the bill drafts early, so those interested persons could respond to the language.
Senator Titus and Mr. Neilander discussed the "bulleted recommendations" set forth on pages 9-12 of Exhibit C, and advised the committee where each recommendation appeared in the bill draft.
William Bible, Chairman, State of Nevada Gaming Control Board, appeared to discuss S.B. 242 by explaining each section and any requested amendments. An outline of that explanation follows:
Section 1 would allow the commission, upon recommendation of the board to require a transmission company (an interface company between the tract and Nevada sports books) to file for a finding of suitability. ... This is a discretionary act and does not require a mandatory finding of suitability or a mandatory license application.
Section 2 is a definitional change of the term 'gaming device'...we are suggesting the language be changed to include [those items set forth in the section]. ... This will give the agency a greater definition in terms of prosecutorial activities, especially relating to the illegal manufacture of gaming devices within the State of Nevada. ... A computer chip or circuitry which has no other use other than in a slot machine, would be termed a 'gaming device,' which can be determined by decoding the 'chip.' The burden of demonstrating whether a chip or circuit will be termed a gaming device is with the agency. Suggested amendment to language in section 2(2)(a): change "demonstrated" to "reasonably demonstrated" to provide additional clarification. This lowers to some extent the burden of proof in terms of the definitional aspect of what is being suggested. Other suggested amendments to section 2 set forth on Exhibit D attached hereto. After enactment of the legislation, the agency will need some additional flexibility in terms of the changing technology. There may be devices being developed which would need to be termed a 'gaming device' pursuant to the regulation, i.e., something not known at this time which could be later addressed.
Section 3 would add those gaming employees who are required to have a work permit, those employees who are employed by the offtrack pari-mutuel hub system. A 'hub company' compiles the data from sports books and transmits that data to out-of-state racetracks. The results are used in determining the odds and calculation of the payoffs. The employees involved in the hub companies have a great deal of responsibility in terms of the operation of the gaming environment, and should be required to hold a gaming work permit.
Section 4 revisits an area processed by the legislature in the last session, i.e., the changing of a 'junket representative' to 'independent agent.' There was an enumeration of items not included under the definition, including bringing junkets into the state under a contractual arrangement without receiving cash for the service. That presents a potential loophole because of other types of payment. The amendment to the section is included on Exhibit D.
Section 5 and Section 6 are definitional sections, bringing into codification areas not previously included in the statute. The agency needs to review the fee issue.
Section 7 is a definitional regarding a license to operate an off-track pari-mutuel system.
Section 8 is the 'mystery provision' which was not previously discussed with the interim committee. The agency did not request it drafting. It is a definition clarification only, stating a slot machine route operator has a nonrestricted license. There is no fee involved in this section.
Section 9 would allow both the agency and the Nevada Gaming Commission [hereafter 'commission'] to reveal confidential information which has been exchanged between them with any authorized agency of the United States or any political subdivision. The agency has at this time several 'memorandums of understanding' with other jurisdictions now involved in gaming regulation. Information is shared throughout the world on the basis of these memorandums. An amendment to the section is set forth on Exhibit D.
Section 10 was requested by the commission and deals with the time period the commission has to handle a petition filed by an interested person for the adoption or repeal of a regulation from 30 days to 45 days. The commission typically meets one day each month and requests often fall outside the time period. This will accommodate a calendar inflexibility.
Section 11 would allow the commission to adopt regulations to indicate when a surrender of a license becomes effective, and would also provide the surrender of a license does not relieve the former licensee of any penalties, fines, fees, taxes or interest due. There have been many questions regarding what constitutes a surrender of a license. This language will allow the commission by regulation to adopt the various methodologies of surrender.
Section 12 codifies an existing regulatory provision enacted in the late 1980s. The industry requested the codification. An amendment to the section is set forth on Exhibit D. This will allow a licensee to obtain credit to cover losses, not against advance fees paid, but rather against upcoming gaming activity. The problem arises mainly with respect to race book operations, where it is difficult to sustain a loss.
Section 13 was added at the request of the MGM Hotel, which asked for more flexibility in terms of a holiday and special event permit. The agency has no concerns with the requested provision.
Section 14 provides that after a change of corporate officers and members of the board of directors, the licensee would have 30 days after the change becomes effective to make appropriate filings. There is currently no time period specified.
Section 15 refers to the disposition of gaming devices which other entities have taken possession of, and how that disposition is handled. An amendment to the language is included on Exhibit D. It will provide the agency can approve a disposition without having to go through a licensing process.
Section 16 will be deleted.
Senator James stressed the importance of understanding what "...changing these definitions does to impact the other parts of the gaming law and who is going to be impacted." Mr. Bible said, "There needs to be consistency between the operational parts and the definitional parts."
The next to testify on S.B. 242 was Robert Faiss, Lionel, Sawyer and Collins, counsel for the Nevada Resort Association (NRA), who was accompanied by Richard Bunker, representing the NRA. Mr. Faiss commended Senators Titus, Smith, McGinness and Adler, together with the other members of the interim committee for their "dedicated and thoughtful contributions to the viability and stability both of the gaming industry and its control." He also praised Dennis Neilander for his careful coordination of their work. He referenced the bill in front of the committee and said the original concerns of the Nevada Resort Association had been accommodated by the amendments offered by Mr. Bible. He said those particular amendments related to sections 4 and 9 of the bill. Mr. Faiss concluded, "With adoption of those amendments, the NRA has no objection to this bill."
Speaking next was Bill Prezant, International Game Technology (IGT), the largest manufacturer of gaming devices in the State of Nevada. Mr. Prezant stated IGT supported S.B. 242 and in particular the definitions set forth in section 2, since the company believes the unauthorized manufacture of gaming licenses is not in anyone's best interest.
The next to testify was James Avance, representing Jackpot Enterprises and its subsidiary slot operations. Mr. Avance requested removal of language changes in section 8 from the bill, indicating he remembered no testimony emanating from the interim study with regard to the section. He said the definition of "slot route operator" was well taken care of in other sections of the statute. Mr. Avance stated he appreciated Mr. Bible's explanation regarding the "housekeeping nature" of the section, but related another "housekeeping measure" contained in Gaming Regulation 3.015, set forth on Exhibit E to these minutes, which is an amendment to NRS 463.161. He stated, "The innocuous language there was adding the words 'incidental to the primary business.'" Mr. Avance said the words were added "under the context that was the procedure which was being done then." He said the argument was once the language was added, more restrictions would come. Mr. Avance said after 9 months of hearings, the regulation set forth on Exhibit E was developed, setting forth all of the factors which determine where you can place a slot machine. He pointed out many restrictions were added, "...in a simple housekeeping measure." Mr. Avance repeated his request for removal of the language changes in section 8 of S.B. 242.
Senator Adler asked Mr. Avance what the application of section 8 would be to the industry. Mr. Avance answered:
While the intent may be good, clean, or even unknown today, tomorrow this could be a taxing measure while it is not intended as such today. ... I think it says if you have
more than three locations you become a nonrestricted licensee at those three locations...nonrestricted licensees are taxed differently [than slot route operators].
Mr. Avance stated although it is not the intent at this time, the language of section 8 may lead to the change in the taxation formula for slot route operators. He concluded, "If nobody knows where this came from, then there should be no problem taking it out of there."
Senator Titus said the interim committee had considered taxation issues and the conclusion was reached it was "too broad a problem for us to address during this interim." She stated they have made a recommendation to the Senate Committee on Taxation regarding consideration of those matters. She suggested the language added to section 8 should be deleted from S.B. 242 and refer the matter to the taxation committee. Senator James indicated the matter would be brought up in the work session on the bill.
The hearing was closed on S.B. 242 and opened on S.B. 243.
SENATE BILL 243: Makes various changes relating to gaming policy committee.
Senator Titus and Mr. Neilander offered an explanation of the bill. Senator Titus stated the bill called for changes in the makeup and operation of the gaming policy committee. She said that committee was already in existence by way of NRS 463.021, and the bill provided an amendment to that section. Senator Titus explained:
Because the dynamics of gaming are changing so rapidly, most of the information that reached the committee was out-of-date by the time we had another hearing. If that was happening from one hearing to the next, we figured it was certainly happening from one session of the legislature to the next. There is no ongoing body with representation from the legislature that maintains some contact with the industry. We felt such a body was needed and we could either create one or reactivate one that existed. Since this policy committee already existed, we looked at that as a way of strengthening the liaison between the legislature and the industry. The recommendations were based on the fact this new body could provide oversight in the area of gaming policy...not gaming regulation which is already covered...but the formulation of gaming policy. It would provide a continuous forum for dialogue and it could track changes that were occurring throughout the state and throughout the country.
Senator Titus indicated the changes made in the statute with respect to the existing policy committee were as follows:
Call for regular meetings; revise the membership guidelines; authorize the committee to take recommendations directly to the legislature and require the committee to hold public hearings on any recommendations it considers.
Senator Titus stated the policy committee is advisory to the Governor and is called at the Governor's pleasure at this time. She added the interim committee has added a requirement for quarterly meetings. In addition, she said, they have requested the addition of members of the legislature and a member of an Indian tribe. Mr. Neilander stated the legislation would require the Governor "...to sign any Indian gaming compact in his capacity as Governor, and not as chairman of the gaming policy committee...because of the separation of powers." He said the bill will empower the gaming policy committee to be the entity which would do any formal negotiations with Indian tribes pursuant to Class 3 gaming activities.
A. Brian Wallace, Chairman, Washoe Tribe of Nevada and California, appeared on behalf of Anita Collins, Chairman, Walker River Paiute Tribe. Ms. Collins' written testimony is set forth on Exhibit F hereto. Mr. Wallace added the following comments regarding the interim committee:
I would like to recognize our appreciation for the leadership over the last year provided by Senator Titus. We really believe in what was started and what we are trying to finish. This has provided the only opportunity we have from the Indian community to really speak in forums on this subject. We truly appreciate the effort and sincerity.
Senator James asked Mr. Wallace if he had found the gaming policy committee to be a forum to express the tribe's views. Mr. Wallace responded:
Yes and no. I would concur with regards to the confusion as another layer of negotiated processes [is] being incorporated between the tribal gaming compact exercise under the federal statute, but also it was the tribes that made the suggestions to some of the modifications to the study committee about Indian representation. We were heard, and that is articulated in the proposal...but since the hearings started in December, and since we have a working experience with the attorney general and the gaming control board, we find things are going along quite nicely.
Senator Titus stated the suggestion in Exhibit F regarding a change of wording to provide for the appointment of a representative of an Indian tribe to the intertribal council is appropriate. Senator Titus
then referred to the final section of S.B. 243, which says the committee will participate in negotiation of the compact, and stated:
In the interim hearing...the Indian tribes were concerned about moving ahead with these compacts...one of the things we said this committee might be able to do would be to draft a model compact that could be used wherever appropriate. Since the whole question of who does the negotiating is still up in the air and subject to interpretation at the federal level, maybe it would be appropriate to leave out section 7 and let the policy committee be an advisory committee, rather than being actually involved in that negotiating process.
Mr. Wallace indicated some of the confusion was because the tribes were not clear with whom they would be negotiating.
The next to testify was William Bible, Chairman, State of Nevada Gaming Control Board. Mr. Bible stated the agency had concerns regarding the policy committee, because some governors regularly called meetings of that committee, some called them infrequently, and the present governor has not called meetings at all. He said the problem was the matter of the policy committee being called "at the Governor's discretion." Mr. Bible stated the Governor has access to the agency and the commission for policy advice, and to the industry and the public for advice. He continued:
What you are suggesting here, because you are requiring that the committee meet...you are formulating a policy committee and you are not really giving them any task. Currently, if there is a need for legislative input...the legislature has the ability to adopt a resolution and formulate a study committee in a particular area, address that area and explore the various options.
Mr. Bible indicated there would be a fiscal impact on the state if quarterly meetings were mandatory.
Senator Jacobsen asked Mr. Bible if he knew whether Governor Miller's reorganization plan included a provision for retaining the gaming policy committee. Mr. Bible reiterated the policy committee was optional which gives the Governor flexibility regarding gaming issues he may want to consider in a public forum. Senator Jacobsen asked if the gaming commission could handle issues in the same manner as the policy committee. Mr. Bible answered the commission has "statutory responsibility and they routinely study policy issues.
Senator James asked Senator Titus why there should be an "additional policy-making layer, since there is a board (the agency), a commission, the legislature, and the Governor. He said he questioned why the legislature should "adopt this separate government to deal with gaming policy." Senator James pointed out there was no statutory provision for guidance of or specific tasks for a gaming policy committee. Senator Titus indicated there was an earlier interim study on gaming done in the 1970s. She said one of the recommendations of that committee was to "...maintain...the gaming policy committee, because it did accomplish a lot in bringing the issue to the legislature and keeping the legislators informed." Senator Titus continued:
I think part of what happened last time...,when all the business about Indian gaming was hitting the news, was that the Governor called a meeting of the industry. As I recall that meeting, he had about 40 heads of big gaming interests in the state...in a closed door meeting...no press, no legislators, nobody from the outside...and we were kind of struck by [the question], 'is this a good way to come up with policy that will have such a major impact on this state's future, and leaving the legislature totally out of that process?'"
Senator Titus said the above statement points out why the interim committee felt it was important to have an ongoing source of information or public forum "in an area that is this critical." She added she did not agree there would be a large fiscal impact, since the industry members would pay their own costs and "legislators would not necessarily be paid."
Senator Jacobsen stated he wanted to be sure "we don't place an Indian on a commission which will become inactive...." Senator Adler stated he believed it would be a "useful tool" to allow the Governor to call a gaming policy committee together, in light of the rapidly changing gaming industry.
There was no further testimony on S.B. 243, and the chairman placed the committee in recess until 4:00 p.m.
SENATE JOINT RESOLUTION 16: Urges Congress to amend Indian Gaming Regulatory Act.
Senator James stated the resolution included recommendations from the legislature regarding changes to the Gaming Regulatory Act and suggestions on clarification of its provisions. Senator Titus explained:
One of the things that was obvious to [the interim committee] was how much gaming is proliferating around the country. We saw there were only two states that don't have any kind of gaming...Utah and Hawaii...every state considered some form of gaming in the last session of their legislature. One of the main reasons you find it is proliferating is the result of what is referred to as Indian gaming. As the result of some [United States] Supreme Court decisions regarding Indian gaming...the notion of what kind of rights Indians had in terms of gaming, vis-a-vis state regulation, was very much up in the air. Congress responded by passing the Federal Indian Gaming Regulatory Act of 1988 (IGRA)...."
Senator Titus referred to page 21 of the gaming study (Exhibit C), which states the background and history of Indian gaming. She said in addition to those recommendations placed in S.J.R. 16, the interim committee discussed the matter of the gaming policy committee "doing the negotiating with Indians on compacts." Senator Titus continued:
It seems the notion of who is actually authorized to do the negotiating is subject to interpretation. There is a lawsuit in Kansas over the question of who has the power to do the negotiating...is it the Governor or is it the legislature? In some states you will find those two bodies are in disagreement over whether there should be Indian gaming or not. If we don't pass on this policy commission, and give it the authority to do the negotiating, we might have to come with another act that will either give that authority to the Governor or to some other body, to clarify what we want in the State of Nevada...so we don't find ourselves in a lawsuit like you see in Kansas.
In addition to that recommendation...we have the resolution before you...it is basically a resolution to Congress, asking Congress to clarify just exactly what is meant by the Act."
Senator Titus referred to page 24, Exhibit C, for a complete statement regarding the recommendations. Mr. Neilander added many of the points included in the recommendations were also brought out by the Western Conference of Attorney Generals, who held a conference just prior to the last meeting of the interim study committee.
The next to testify regarding the resolution were A. Brian Wallace, Chairman, Washoe Tribe of Nevada and California, and Arlan Melendez, Tribal Chairman, Reno-Sparks Indian Colony. Mr. Melendez first referred to the earlier hearing on S.B. 243 and stated:
The Indian tribes are all separate entities, with separate governments, different economic bases, different interests...when we talk about compacts, many times we have to look at tribes on an individual basis, rather than
saying we have to have a model that suits everybody across the state. When you are dealing with tribes...you have to take them on a one-on-one basis.
Mr. Melendez returned to a discussion of S.J.R. 16. He stated the first problem with the resolution is "...a moratorium would hurt Nevada tribes." He said a few tribes have talked with state officials regarding a compact, "...mainly because tribes in Nevada are trying to enhance some of the local stores and service stations...." He said they have to adhere to IGRA, even with a small number of slot machines. Mr. Malendez said placing a moratorium "would basically put Nevada tribes on hold, even through we probably aren't major competitors to the gaming industry." Mr. Malendez continued:
The compacts...basically were what many of the tribes across the United States looked at as giving away some of their sovereignty. But because they wanted to move ahead, they felt this was the best avenue of approach. But as you read the national papers, you will find out many of the states are reluctant to compact...basically they have stated the 10th and 11 amendments to the Constitution...the tribes have looked at that as basically bad faith. Even in this resolution, it says to define what bad faith and good faith is...but we all know if a person doesn't show up at the negotiating table...whether you redefine what good faith is...they will most likely still fall under bad faith. We see that all the way across the country...the states are reluctant to negotiate.
When you look at the Indian country in general...you look at a country that basically has not been taken care of very well by the federal government...I think the United States does more for foreign countries than they do right in their own backyard...we know that for a fact...500 years of neglect in the Indian country. So when tribes actually come up with a way to improve their economies...their economies become enhanced and you also see the surrounding communities being enhanced also...you see non-Indians being put to work in the casinos. It follows in line with President Clinton's new economic strategy of basically alleviating poverty across the nation...most of the profits that they earn do go back into tribal government, and in private industry, that doesn't happen.
Mr. Malendez said he believes there should be a nationwide study regarding how monies made in Indian gaming go back into the surrounding community and also a poll of what the American people think of Indian gaming. He continued, "People should have a say before state governments actually set moratoriums."
Senator Adler pointed out Indian tribes do not have criminal jurisdiction over non-Indians, "...meaning if you had a murder in an Indian run casino, you would have to call the local authorities to arrest that individual...." He said he could see a lot of problems, considering the United States Supreme Court decision which divests tribes of any criminal jurisdiction over non-Indians. Mr. Malendez stated he believes the tribes involved in gaming are dealing with those problems at this time.
Mr. Wallace stated he believed the United States Department of Justice would be the entity to handle any major crimes which occurred in an Indian casino. Senator Adler said he had a problem with the long response time typical of federal agents when problem involving a non-Indian occurs on an Indian reservation. Mr. Wallace concurred with Senator Adler's criticism but added it was not necessarily the case "on every reservation in every state." He stated the Nevada tribes had "serious problems with the United States Attorney's ability to prosecute such crimes as child sexual abuse." Mr. Wallace said there needed to be a cooperative effort between the tribes and both jurisdictions, i.e., state and federal government.
Mr. Wallace read a prepared statement regarding S.J.R. 16, a copy of which is attached hereto as Exhibit G. In addition Mr. Wallace provided the committee members with a packet of information which included: (1) an excerpt of a December, 1992 report from the Office of the Inspector General, United States Department of the Interior, relating to the tribes' inability to finance large unrestricted gaming activities on the reservation because of the 7-year joint venture limitation; (2) news articles regarding the above matter; (3) package of various news clippings with regard to public opinion in the private sector, which generally supports Indian gaming; (4) material which outlines efforts of some of the majority members of the Nevada Resort Association in order to work with the Indian community in the development of gaming operations outside the State of Nevada; and (5) information regarding gaming activity in the State of California. The above referenced informational items were provided to each committee member and are not included as exhibits to these minutes. Also provided to the committee and attached hereto as Exhibit H is a copy of a letter from the Washoe Tribe of Nevada and California to Governor Miller, which states the tribe's intent to negotiate regarding gaming activities.
Mr. Wallace stated:
Indian tribes are net economic assets to these communities and to the state...our activities...directly contribute to the positive welfare of the state economy. In our particular situation, we spend millions of dollars in Carson City, Minden, Gardnerville and surrounding areas in
the purchase of goods and services that support the non-Indian community. ...
Although we are not in gaming activities at this time...I have involved in a lengthy dialogue with Secretary of the Interior Babbitt...as well as senate leadership, with regards to the potential amendment of the federal statute....
Mr. Wallace stated all they were asking at this time was a "little light in the shade" on the issue of Indian gaming and Indian tribe participation in the State of Nevada, as well as across the country. He said he wished to point out that although the federal government has the "legal responsibility of administering the intent of the IGRA, they have never been given the resources to do so." Mr. Wallace continued:
In addition, with the high profile news articles and rhetoric coming from here in Nevada and the west daily...I and other tribal leaders here in the state have been contacted by majority and minority members of the gaming association about trying to set up contacts in California, if this breaks open on the other side of the state line. I'm not criticizing this...I believe there are partnerships which can be struck between the industry and the tribes...I think that already has been done. Promus is in outside of Phoenix...a deal has been struck by the Mississippi Choctaws...Caesars is in Palm Springs...Harvey's is looking at the midwest...strip interests are in the Great Lakes...so why the double standard here? I'm not trying to be negative or show any disrespect at all...and I'm definitely not trying to make any enemies...but you have to be able to look the people you work with in the eye sooner or later. We have to say this, and we have to say it very plainly...this thing is bigger than Indian gaming. It boils down to the understanding of the federal tribal relationship in this country, what the Constitution means, and what Arlan, myself and other people have fought for in this country. I think we have made a number of sacrifices on behalf of the United States, and all we are asking for is fair and equal treatment for that commitment and sacrifice. ...
I have much respect for Mr. Bible and the attorney general ...they have dealt with us very squarely...but I can't understand what the chief executive officer in this state's position is in this area...when we are negotiating rather nicely, and things seem to be going along fairly and squarely...I am at a loss.
Senator Jacobsen indicated he and Senator Titus were in Washington, D.C., during the past week and met with President Clinton and other members of Congress. He said, "He [the President] mentioned it in passing...almost every one of the congressional speakers mentioned the fact that Indian gaming was one of their major concerns...nothing was concrete...."
Senator James indicated over the past weekend he had run into Steve Wynn, Chairman, Mirage Resorts, Incorporated, who gave him "some perspectives on Indian gaming I thought would be important to this committee." Mr. Wynn appeared before the committee, and his verbatim testimony is as follows:
There are a lot of changes in Nevada, and nothing underscores it more than looking at this committee and seeing the new faces, young and old...it makes me feel good because I see all bright people trying to do the right thing under complicated situations. I would like to clarify for the record who I represent and who I don't represent. I represent my company, Mirage Resorts, Incorporated. I appear here without any portfolio whatsoever to speak for any other company but our own. I should not be construed in making remarks that reflect the opinion of the Nevada Resort Association or any other company, save and except our own, which does include two Golden Nuggets, the Mirage and soon, Treasure Island...about 11,000 employees.
I represent a company that at the moment is the largest investor in the history of the State of Nevada in terms of dollars...considering the Dunes and other things, it is likely to remain so, in spite of all the wonderful investments being made in the state. I also represent a company that at the present time has no business with an Indian tribe. In the past, we have explored such things with Sac and Fox of Kansas and the Puyallup of Tacoma. We have nothing going at the present time, and for reasons that have to do with simple business, I am not quite sure we will in the future, although there is always a possibility. I regard Indian gaming, as I have said to many of you privately, as a transition in America. I believe it presages the changing attitudes as cities, states and counties look for more jobs, more taxes, and economic stimulation. Gaming just isn't the forbidden fruit any more. The fact that Indians want to have gaming in many places should not be disturbing to us.
I have a private sort of thing...listening to Brian and Arlan...I have grown up in this business. I was a second generation gamer...my dad was in the bingo business. I have been here 26 years. Because of my business in New Jersey and places like that, I have had to face squarely some of the awful hypocrisy with which this subject is dealt in other places. I was asked by the ABC reporter, Bill Moyers, 'How does it feel [about Atlantic City]...to be loved for your money and hated for what you are?' I said, 'They have a terrible problem with hypocrisy here in New Jersey...and gambling and gaming seems to bring that out.'
One of the reasons I am so delighted with the Indian gaming movement, and I root for them every chance I get, is because the Indians are making a mockery of the hypocrisy that is going on in this country. They ought to get what they want to get...I think the Supreme Court will protect them no matter what anybody does, including Fife Symington and a group of extreme right legislators in Arizona. We have gaming in every jurisdiction until it is coming out of our eyebrows. States advertise, 'You got to play to win.' In every state, New Jersey, California...'Take a shot...the daily lottery...come on, be a millionaire.' Enough, already. We have gambling. It doesn't make any difference in California whether they have pai gow poker...California 22...or they call it blackjack or baccarat...enough, already. The Indians ought to be left alone. The Supreme Court spoke as clearly in Cabazon [California v. Cabazon and Mission Indians, 480 U.S. 202 (1987),] as any human could speak. Indians have the right to do what they want to do, provided it is not socially antithetical to the public safety, or illegal. Indians are not trying to legalize murder...they just want to be left regulation-free to run gambling, just like everybody all around them is doing. That little move down in Arizona is punitive...it won't stand the test...they will get knocked out. For all of you, with all your valuable time, to be wasting your time on this issue is a waste...
If it is some sense of helping Nevada, I think our energies may be misdirected. This state sits here today with a natural lead on the rest of this country in terms of tourism...the lifeblood of its existence. Gambling has never been the issue in this state. The attraction here has never been gambling. It was the place, itself...the entertainment...the spectacle of Las Vegas and Reno. Even in the unmentionable 50s, when the underworld guys supposedly were in charge here, it was the spectacle of Las Vegas...the spectacle of Reno...the party that went on all night, that brought them here. The more it grew, the more it became true that the people who were here...they came here in droves...didn't regard themselves as gamblers. We get 25,000 people each day through the Mirage. We can stand there and watch some gal or some guy play a video poker machine insidiously for an hour, without breathing...walk up and say, 'I am conducting a survey, excuse me...madam...are you a gambler?' ... 'No...I'm not a gambler. I'm here with my son-in-law at this convention, and I am just killing some time with this slot machine...I'm going to lose my money, but that is what I am doing.' ... 'Madam, I have watched you for an hour...aren't you a gambler?' ... 'I told you I'm not a gambler...I've only been here twice in my whole life...I'm not a gambler.' ... 'You are playing that slot machine.' ... 'So what, I'm going to lose my money...I can afford it.' She is not being defensive. He or she is not trying to cover up...they are telling the truth. There are no gamblers in The Mirage. They are just folks, Americans, Asians, Latin Americans and Europeans from every city and place, having fun. They are coming to Las Vegas and The Mirage I am sure because of the spectacle that is the place.
Change is killing nearly every other city you can think of. The State of California has an identity crisis...doesn't know how to spell its own name anymore. Folks are leaving there and coming here in droves. They can't get organized in Sacramento any more than we can get organized in Washington. Our pluralistic society with its strong, diverse interests being tested to its core...and how to come up with a consensus and a good democracy...the better the democracy, the more difficult the consensus. You are all much better experts than I am.
The fact of the matter is, when the rubber factory in Akron closes down, that is it for Akron. They have two choices, size down and get used to it. When the car factory in another city, or all the factories in Connecticut...you don't need to have 220,000 employees in Hartford, Connecticut...in United Technologies...when we are not making Pratt and Whitney engines for F-16's, and Sakorsky gunships for helicopters...and when the construction trades slow down, you don't need Otis Elevators or Carrier Air Conditioners...so they just lop off 80,000 people in one shot, and that is it. They go to another state...they have to find a new home. When we built The Mirage in 1987-1989, I was delighted with the disproportionate market share we captured. I said, 'O, boy...this is terrific. We built a better mousetrap, and we are getting rewarded for it... everything is just right.' People spend $200 million on a hotel...we spent $600 million or $700 million...we are getting what we deserved...we earned it.
I have to think to myself...the reason The Mirage looked good is because Las Vegas had a terrible sameness to it. There were boxes and boxes of rooms on top of boxes and boxes of slot machines. We have this wonderful distribution system all over the world that is bringing people here in huge numbers. But, unless the message that goes down that distribution pipeline continues to be exciting and fetching and people really want to come here, then all the distribution networks in the world won't keep you alive. It's the message that goes down the pike that gets the action. I was concerned about whether Las Vegas would make the turn into the 90s and beyond and continue to have the excitement and the fundamental appeal that lit the fire and kept the growth going. I knew it wasn't the slot machines. If it were slot machines, we all would be doing equally well on the Strip. The Strip is a perfect microcosm of America. Gambling is not enough. People don't give that much of a damn about casinos. What they care about is the things that casinos allow to happen...the party, the fun, the entertainment, the excitement...the perverse exaggeration of it all. Not necessarily good taste, but man it is noisy. That is good.
Las Vegas has no hypocrisy to it as a place. It is one of the few spots on earth that is what it is, shamelessly, obviously, openly and consistently. People are just relieved...like a gasp...to stop with the hypocrisy and the double talk and the baloney.
Is it pressure from guys like me that makes you check your brains, act like silly things and waste your time on things like this? I hope not. But if it has anything to do with us, you are off the hook. I am here to tell you that on behalf of my outfit...forget about protecting The Mirage by picking on Indians...it isn't worth the time we took to say it. But I'll tell you what does matter to me. I am so glad that Luxor and MGM are being built, because my biggest question about whether Las Vegas would make the turn and continue to be exciting is being answered in a volume louder than I ever dreamed it would be. Where change is killing cities from one end of the world to the other, our state and the city in which I live is demonstrating an agility...a nimbleness...a lightness of foot that can only be compared to the Romanian gymnastic team when Nadia Comaneci was on it. We are just leaping into the next decade...caging the message and the deliver of Las Vegas and proving itself...making it more exciting than ever before.
In the fourth quarter of this year, these three hotels that are under construction now that cost $2 billion...that is almost as much as Disney World and Universal originally cost put together in Orlando. 10,500 rooms...17,000 direct jobs...another 15,000 indirect...enough to make a dent in the west side's problems in Las Vegas if we can put 3,000 or 4,000 of those people to work. Las Vegas is doing this in a down economy, because Kirk Kerkorian and screwballs like me think it is the safe, right thing to do...and in this state there is a consistent maturity that allows the entrepreneur of spirit and development to continue.
Don't worry about Indian reservations or river boats... they're just gambling joints. Keep Nevada healthy. Protect that invitation that has been inherent in this state to attract capital and to keep development going. All the Indian reservations and all the river boats in the world won't make a dent in our visitor traffic. One of the reason why we made a big mistake in 1978 and thought we would be all finished because of New Jersey, is that we looked at ourselves as a gambling town. We were wrong. We went from $2 billion to $11 billion in gaming revenue in a few years, because the fact of the matter is we were in the entertainment, leisure and recreation industry. That pot...that bucket...is huge. Las Vegas is just beginning to scratch the surface, because I believe these hotels are going to be successful. Some of the older ones are in trouble. The gaming industry is not a uniformly successful thing.
Don't penalize the older...bigger firms that are spending the money. Create an environment so this is always the big show. Create an environment...When people who like the opportunities that gaming related development can produce say the place to put the big bucks is here in Nevada.
That is my message...that is why I came.
There was no further testimony on S.J.R. 16, the chairman closed the hearing on the bill and adjourned the meeting.
RESPECTFULLY SUBMITTED:
Marilyn Hofmann,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE:
??
Senate Committee on Judiciary
March 17, 1993
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