MINUTES OF THE meeting
of the
ASSEMBLY Committee on Judiciary
Seventy-First Session
May 14, 2001
The Committee on Judiciarywas called to order at 8:45 a.m. on Monday, May 14, 2001. Chairman Bernie Anderson presided in Room 3138 of the Legislative Building, Carson City, Nevada. The meeting was simultaneously videoconferenced in Room 4401 of the Grant Sawyer Office Building, Las Vegas. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Bernie Anderson, Chairman
Mr. Mark Manendo, Vice Chairman
Mr. Greg Brower
Mr. John Carpenter
Mr. Jerry Claborn
Mr. Tom Collins
Mr. Don Gustavson
Mrs. Ellen Koivisto
Ms. Kathy McClain
Mr. Dennis Nolan
Mr. John Oceguera
Ms. Genie Ohrenschall
COMMITTEE MEMBERS ABSENT:
Mrs. Sharron Angle (excused)
Ms. Barbara Buckley (excused)
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Risa B. Lang, Committee Counsel
Deborah Rengler, Committee Secretary
OTHERS PRESENT:
Robert Faiss, Counsel, MGM Mirage, Las Vegas
Daniel Wade, Co-Chief Executive Officer and Vice Chairman of the Board of Directors, MGM Mirage, Las Vegas, and Vice President, Operations for Harrah’s Entertainment, Reno
Bill Timmons, President and Chief Operating Officer, Aladdin Resort Casino, Las Vegas, and Director of International Operations for London Clubs International, United Kingdom
Bill Bible, President of the Nevada Resort Association
Dennis Neilander, Gaming Control Board
Brian Sandoval, Nevada Gaming Commission
Harvey Whittemore, Nevada Resort Association
Mark Fiorentino, Boyd Gaming
Fran Inman, Executive Vice President/General Manager, Silverton Hotel Casino, Las Vegas
Greg Borgel, Planning Consultant for Silverton Hotel Casino, Las Vegas
Mike Alonso, Harrah’s Entertainment
Lucille Lusk, Co-Chairman, Nevada Concerned Citizens
Dan Musgrove, Legislative Advocate, Intergovernmental Relations, City of Las Vegas
Chairman Anderson made opening remarks and noted a quorum was present.
Chairman Anderson opened the hearing on S.B. 283.
Senate Bill 283: Revises various provisions governing gaming. (BDR 41-761)
Robert Faiss, Counsel for the MGM Mirage, introduced three gentlemen who joined him at the witness table, Daniel Wade, Bill Timmons, and Bill Bible. Mr. Faiss said S.B. 283 was good for the state, it hurt no one, and it was distinguished by comprehensive control. The bill would affect certain international casino patrons whose fortunes and interest in gaming resulted in wagers of tens of thousands of dollars a hand. Those patrons were accustomed to the highest standards of hospitality, security, and privacy during their gaming activities in other countries. Currently, Nevada casinos were not able to guarantee privacy during gaming activities; consequently, patrons of that quality declined to visit Nevada. That deprived the Nevada gaming industry of profit and the state treasury of tax revenue. S.B. 283 would require the Nevada Gaming Commission to adopt regulations for the licensing and operation of international gaming salons.
Mr. Faiss said there were three sections of S.B. 283 that did not pertain to international gaming salons – Sections 8, 9, and 10. Those sections corrected an unintentional inequity in gaming law that handicapped the operation of limited liability companies (LLCs). A corporation licensed for gaming might change their directors and officers as necessary without obtaining a gaming license; however, the directors and officers were required to file an application for a gaming license within 30 days after they assumed their new positions. As the result of an oversight in the statute governing LLCs, their directors and officers could not assume their office until they had filed an application and the application had been approved which might take several months. Sections 8, 9, and 10 would treat all business entities alike.
Daniel Wade, Co-Chief Executive Officer and Vice Chairman of the Board of Directors, MGM Mirage, Las Vegas, and Vice President, Operations for Harrah’s Entertainment, Reno, gave a quick overview of the gaming industry during his 27-year career. Nevada law allowed anyone to observe high stakes games in Nevada casinos. Because of that, many international gamblers would not patronize Nevada casinos. The Nevada Gaming Commission and Gaming Control Board had provided input as to how to proceed correctly and safely, in order to protect the intent and integrity of Nevada, utilizing surveillance technology that was far greater than in past years. S.B. 283 would provide a tax revenue opportunity, as well as revenue for the gaming industry.
Bill Timmons, President and Chief Operating Officer, Aladdin Resort Casino, Las Vegas, and Director of International Operations for London Clubs International, United Kingdom, said he was licensed in many jurisdictions – United Kingdom, South Africa, France, Egypt, Lebanon, and soon the Bahamas. High stakes gamblers prized their privacy as they won or lost millions of dollars. They had the capability to generate significant revenues for Nevada casinos, as well as tax revenues. Australia and Monte Carlo already had private salons available, under tight jurisdiction by their respective registry bodies. Mr. Timmons commented that S.B. 283 would also generate additional revenues in the retail, hotel, and entertainment businesses which were not covered in the bill.
Bill Bible, President of the Nevada Resort Association, felt S.B. 283 was not only timely but a necessary piece of legislation. It was a necessity to be able to offer that type of service in order to remain on the cutting-edge of the gaming industry. He also felt that it would be a defensive action to protect the activities for those Nevada high-end players who might play elsewhere.
Chairman Anderson asked if the paparazzi would become an issue as the players entered and/or left the private salons. Mr. Timmons did not believe it would be a problem. He proposed that access to the gaming salons from private suites without being seen by the public, would limit such problems.
Assemblywoman Ohrenschall clarified that there was an identifiable and strictly limited group that was gambling elsewhere, not in Nevada. Mr. Bible agreed. Assemblywoman Ohrenschall asked if the actual facilities would be constructed in such a way as to limit viewing by the general public and any paparazzi. Mr. Timmons explained such accommodations were already in place in the MGM facilities.
Assemblyman Carpenter read from Section 4(b) and asked if those restrictions would become a problem. Mr. Wade said credit worthiness was the deciding factor. Mr. Bible said the only absolute rule would be that the participant must be 21 years of age.
Chairman Anderson asked if the service would be available to a group of gamblers or to an individual player. Mr. Wade said both would be considered. It was expected that the salons would be used six to eight times a year and would not be a typical Saturday afternoon activity.
Assemblywoman Ohrenschall asked if there would be a dress code to increase the “aura of exclusivity.” Mr. Timmons said times had changed, and it would depend on the jurisdiction from which the customers came.
Assemblyman Brower asked if current Nevada law prohibited private salons or if it was the intent of S.B. 283 to codify the scheme so that there would be no doubt as to the propriety and legality of the activity. Mr. Faiss said it was the latter.
Chairman Anderson said that to mandate a certain credit requirement could set a precedent to exclude someone. Mr. Faiss responded it set up a comprehensive, concerted standard. The Gaming Control Board had the authority under Nevada Revised Statute (NRS) 463.408 on any application for a special event to deny access by the general public. Chairman Anderson asked if the $5,000 application fee applied to such activities. There was no reply.
Dennis Neilander, Gaming Control Board, did not have a formal presentation; however, he was available to answer any questions about S.B. 283. He added, the current public policy did prevent that type of gaming to occur in Nevada, and only the legislature had the ability to grant an exemption to that public policy. The Gaming Control Board was prepared to regulate that type of activity pursuant to the parameters set forth in the bill.
Chairman Anderson verified that the Gaming Control Board had the ability to set up “special event” activities. The bill clarified the salon would be in existence, and it specified the $5,000 non-refundable application fee. Mr. Neilander said the Gaming Control Board had not used the “special events” exemption very often; an international salon was very different from a special event. Mr. Neilander saw it as a “narrow exemption to the general public policy” that gaming be open at all times to all members of the public.
Chairman Anderson said S.B. 283 must pass the “Anderson 3” test.
(1) It could not harm other gaming properties in terms of the overall health of Nevada gaming.
(2) It could generate dollars for Nevada through the regulatory scheme and could not promote tax evasion.
(3) It could be regulated within the confines of the Gaming Control Board and the supervision required by Nevada.
Mr. Neilander said he focused on the third item of the “Anderson 3 Test.” He believed the Gaming Control Board could regulate the activity; it would be easier to regulate that activity than those in the open casino floor. With the use of sophisticated surveillance equipment and the possible presence of an agent in the room, regulation would not be a problem. The licensee would be required to notify the Gaming Control Board when the room would be used. Additionally, it was hoped the surveillance images would also be transmitted to the Gaming Control Board’s office.
Chairman Anderson asked if there were sufficient safeguards within the law to allow the addition of a person to the room “after the game had begun.” Mr. Neilander said it was included within other regulations; ingress and egress would be reviewed to allow agents into the rooms without impediment. Chairman Anderson clarified that only the agent sent from the control room, not every agent available, would be allowed into the salon. Mr. Neilander said that would defeat the purpose of the bill, since the players requested privacy. The Gaming Control Board would have the ability to “condition” those separate licenses in any manner deemed appropriate.
Assemblyman Brower asked if the Gaming Control Board agreed with Mr. Faiss’ statement that the legislature never prohibited that type of gaming in Nevada. Mr. Neilander did not agree. He believed, as he read the law, gaming must be opened to everyone unless specifically exempted by the legislature or if the Gaming Control Board granted a limited exemption for a special event. Assemblyman Brower asked if that was in statute or if it was public policy. Mr. Neilander said it could be found in NRS 463.0129, the public policy statement where it said gaming must be open to the public “except as otherwise provided by the legislature.” Assemblyman Brower said S.B. 283 would specify such a legislative intent; however, could it undermine the public policy? Mr. Neilander said the Gaming Control Board was comfortable with the regulatory side.
Assemblyman Collins verified it would not be a floating dice table; rather, it would be a permanent room in an existing establishment. Mr. Neilander said a separate approval was required, with conditions that any changes made would need to be approved by the Gaming Control Board, as well. Assemblyman Collins said such a salon would not be moved to a private room. Mr. Neilander said it would be cost-prohibitive considering the surveillance and security required.
Assemblywoman Ohrenschall asked if “periodic” financial disclosures would be required based on the current economic situation in those foreign countries. Mr. Neilander said most high-stakes players would be playing on credit. A “super credit” check would be conducted applying more than the traditional qualifications for credit. Financial standards would need to be met, and that would be updated on a regular basis.
Brian Sandoval, Nevada Gaming Commission, said he had consulted with and agreed with Mr. Neilander. He said, “It was good public policy.”
Chairman Anderson asked for further testimony. There being none, he closed the hearing on S.B. 283. Chairman Anderson entertained a motion.
ASSEMBLYMAN OCEGUERA MOVED TO DO PASS S.B. 283.
ASSEMBLYMAN MANENDO SECONDED THE MOTION.
MOTION PASSED UNANIMOUSLY WITH MS. BUCKLEY AND MRS. ANGLE ABSENT FROM THE VOTE.
Chairman Anderson asked Assemblyman Oceguera to present S.B. 283 on the Assembly floor.
Chairman Anderson recessed the meeting at 9:32 a.m.
Chairman Anderson reconvened the meeting at 9:42 a.m. and opened the hearing on S.B. 171.
Senate Bill 171: Revises standards for designation of gaming enterprise districts in certain locations. (BDR 41-116)
Chairman Anderson announced it was the Chair’s intention to appoint a subcommittee to hear additional testimony on S.B. 171.
Harvey Whittemore, Nevada Resort Association, provided background information regarding controversy that had been generated in relation to language of the existing bill. The members of the Nevada Resort Association had not settled on language to be presented to the committee. S.B. 171 was an “outgrowth” of issues first raised in respect to S.B. 208 of the Sixty-Ninth Session. Mr. Whittemore read the problematic language in S.B. 171 as it related to NRS 363.3086.
Chairman Anderson said he had concerns about different provisions of the bill, especially those dealing with the number of votes required to grant a petition. Mr. Whittemore said that was exactly the issue that had been raised; namely, were they “raising the bar too high”? Chairman Anderson said it might result in the need for total agreement. Mr. Whittemore recalled for the committee that Senator Raymond Rawson, the bill sponsor, wanted the majority provision to be met. S.B. 208 of the Sixty-Ninth Session was amended and passed to deal with problems of neighborhood gaming. S.B. 171 attempted to prevent those purchasing residential property from being subjected to the problems associated with gaming.
Assemblywoman Ohrenschall asked for clarification of the concept of a gaming enterprise zone. Mr. Whittemore said it related to a particular zoning code in Clark County and Washoe County. Both counties had specific areas where only non-restricted licensees could be resort hotels, and that definition included room requirements. The gaming enterprise district that would be established as a result of this statute would require that the district enhance, expand, and stabilize employment, as well as a variety of other factors. Assemblywoman Ohrenschall verified that the gaming enterprise district would be desirable to stabilize the market and employment within the industry. Mr. Whittemore agreed and said it would provide protection to residents in the area. It would also create a process by which everyone would know what would happen in the local jurisdiction.
Assemblyman Collins said S.B. 171 was much stricter than S.B. 208 of the Sixty-Ninth Session. It was good legislation and should be passed.
Assemblyman Brower said he felt the issues in S.B. 171 were local issues and asked why the state was involved. He called attention to Section 1, subsection 6(f), S.B. 171 that proposed to change distances. What was the source of the old numbers, and how were the new numbers determined? Assemblyman Brower said if the criteria in subsection 6(a) through (e) were applied correctly, he felt the distance criterion in subsection 6(f) was unnecessary.
Mr. Whittemore said the legislature had been made aware of local problems in Clark County and thus, S.B. 171 attempted to articulate statewide standards with respect to the gaming policy. The circumstance that led to the need for the three-fourth’s majority was a very serious problem. The standards, as proposed in Section 1, subsection 6, were created to provide a more significant buffer, and there was no magic to the numbers.
Mark Fiorentino, Boyd Gaming, spoke in support of the intent of S.B. 171 which was to ensure that gaming projects did not have a negative impact on neighborhoods. Mr. Fiorentino said he was interested in whatever amendments Mr. Whittemore might be presenting to the subcommittee.
Chairman Anderson asked if Boyd Gaming preferred the language in the original bill without the specifications related to the distance issues. Mr. Fiorentino said he did not know if there were any problems; however, he was concerned about any potential amendments to the bill.
Fran Inman, Executive Vice President/General Manager, Silverton Hotel Casino, spoke in support of the intent of S.B. 171. She had concerns regarding the definition of “related parcel.”
Greg Borgel, Planning Consultant for the Silverton Hotel Casino, was assisting the Silverton in its future expansion. It was felt there might be unintended consequences in the use of the language of “related parcels of land.” The Silverton recently acquired land that was zoned “residential” but master-planned “commercial” because the land was located in a high-noise area near McCarran Airport. The language as written might have a loophole, and it raised the question as to whether ancillary facilities for a hotel-casino could be established in those types of circumstances. That issue needed to be addressed in the subcommittee, because it could be very detrimental and cause hardship for those in the industry.
Mike Alonso, Harrah’s Entertainment, said he would present a proposed amendment to the subcommittee.
Lucille Lusk, Co-Chairman, Nevada Concerned Citizens, said anger had been generated by the encroachment of gaming in residential neighborhoods. She was encouraged by the efforts of the gaming establishments to resolve the problems. Ms. Lusk said the standards related to distances were very important to the neighborhoods. She said she understood the concerns regarding the majority vote issue and the “related parcel of land” issue.
Dan Musgrove, Legislative Advocate, Intergovernmental Relations, city of Las Vegas, said he was willing to present his opposition to the subcommittee, and Chairman Anderson encouraged him to provide testimony. Mr. Musgrove said there was a project in the final stages of planning within the city of Las Vegas that would be greatly affected by the distance standards in S.B. 171. As such, he requested the effective date be delayed to July 1, 2001. He was also concerned about the majority vote issue.
Chairman Anderson asked for further testimony on S.B. 171. There being none, he closed the hearing on S.B. 171. Chairman Anderson assigned Assemblymen Carpenter, Collins, and Manendo (Chair) to a subcommittee to hear further testimony on S.B. 171.
Chairman Anderson adjourned the meeting at 10:21 a.m.
RESPECTFULLY SUBMITTED:
Cindy Clampitt
Recording Committee Secretary
Deborah Rengler
Transcribing Committee Secretary
APPROVED BY:
Assemblyman Bernie Anderson, Chairman
DATE: