MINUTES OF THE JOINT meeting
of the
ASSEMBLY Committee on Judiciary
AND THE
SENATE COMMITTEE ON JUDICIARY
Seventy-First Session
March 2, 2001
The Joint Committee on Judiciarywas called to order at 8:30 a.m., on Friday, March 2, 2001. Chairman Bernie Anderson presided in Room 4100 of the Legislative Building, Carson City, Nevada. 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.
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. Bernie Anderson, Chairman
Mr. Mark Manendo, Vice Chairman
Mrs. Sharron Angle
Mr. Greg Brower
Ms. Barbara Buckley
Mr. John Carpenter
Mr. Jerry Claborn
Mr. Don Gustavson
Mrs. Ellen Koivisto
Ms. Kathy McClain
Mr. Dennis Nolan
Mr. John Oceguera
Ms. Genie Ohrenschall
SENATE COMMITTEE MEMBERS PRESENT:
Mr. Mark James, Chairman
Mr. Jon Porter, Vice Chairman
Mr. Terry Care
Mr. Mike McGinness
Ms. Dina Titus
Mr. Maurice Washington
Ms. Valerie Wiener
ASSEMBLY COMMITTEE MEMBERS ABSENT:
Mr. Tom Collins (Excused)
GUEST LEGISLATORS PRESENT:
Speaker Richard Perkins
Speaker Emeritus Joseph Dini
Assemblyman David Goldwater
Assemblyman David Humke
STAFF MEMBERS PRESENT:
Nicolas Anthony, Assembly Committee Policy Analyst
Allison Combs, Senate Committee Policy Analyst
Bradley Wilkinson, Senate Committee Counsel
Deborah Rengler, Assembly Committee Secretary
OTHERS PRESENT:
Former U.S. Senator Richard Bryan
U.S. Congressman James Gibbons
Bob Faiss, Adjunct Professor, Boyd School of Law, University of Nevada at Las Vegas (UNLV)
William Saum, Director of Agent, Gambling and Amateurism Activities.
National Collegiate Athletic Association (NCAA)
Brian Sandoval, Chairman Nevada Gaming Commission
Bobby Siller, Member Nevada State Gaming Control Board
Dennis Neilander, Chairman, Nevada State Gaming Control Board
Daniel Wade, President, MGM Mirage, Las Vegas and Member Nevada Gaming Policy Committee
Bill Bible, President, Nevada Resort Association and former member, National Gambling Impact Study Commission
Rene Mancino, Student in Gaming Law Policy, Boyd School of Law, UNLV
Mark Hettinger, Student in Gaming Law Policy, Boyd School of Law, UNLV
Nancy Price, representing self
Chairman Anderson stated a quorum was present and made his opening remarks.
Chairman Anderson welcomed those present to the hearing on A.J.R. 2. “The importance of the message this resolution sends is demonstrated by the number of its sponsors, this joint committee hearing to consider it, and the quality and quantity of the witnesses who appear today. I hope Congress will heed the message as we speak for our friends and neighbors who will be adversely impacted.” He continued speaking from a prepared statement that introduced those who would appear before the committee.
Assembly Joint Resolution 2: Urges Congress to refrain from enacting measure to repeal ability of Nevada to license and regulate sports wagering in its current form. (BDR R-983)
Speaker Richard Perkins, District 23, began his testimony from a prepared statement.
I have thus far found no substance for the position that a ban on legal college sports wagering is the antidote to illegal college sports wagering. Simple arithmetic tells us otherwise. Illegal sports wagers have been estimated to exceed $350 billion a year. By comparison, the sports wagers each year in Nevada amount to $2.5 billion. By my calculations, this means Nevada’s legal sports wagering accounts for less than one percent of the total wagered on sports events in the U.S. It defies common sense that stopping the legal one percent in our state will somehow eradicate the 99 percent in the other 49 states.
Speaker Perkins stated the regulatory requirements for computerized bookmaking systems and suspicious activity reports were the most demanding. Nevada sports books had assisted in identifying point-shaving schemes in college sports. As the Deputy Chief of the Henderson Police Department and administrator for the department’s vice program since 1995, Speaker Perkins had never encountered a case of illegal bookmaking or fixing of an athletic contest in Nevada’s regulated gaming environment. “However, our mission is not accomplished merely by persuading the Congress to step back from an action that would unjustifiably damage both Nevada and the national fight against illegal gambling. We must also support efforts to attack the threat of illegal gambling on college sports.”
Speaker Perkins offered an amendment to A.J.R. 2 (Exhibit C), which added a provision to support legislation that was introduced in Congress after A.J.R. 2 was prepared. The amendment would be inserted on page 2, line 37 and would read as follows:
RESOLVED, That the Nevada Legislature hereby urges Congress to adopt the ’National Collegiate and Amateur Athletic Protection Act of 2000,’ sponsored by U.S. Senators Harry Reid and John Ensign and U.S. Representatives James Gibbons and Shelley Berkley and others, thereby enhancing the nation’s ability to identify and address illegal gambling on college sports; and be it further ….
Speaker Perkins concluded, “We in the Nevada Legislature are second to none in our desire to protect college athletes from criminal influence. However, repealing college sports wagering in Nevada will not strengthen that protection; it will weaken it. A.J.R. 2 transmits a message of reason, backed by fact.”
Speaker Emeritus Joseph Dini, District 38, read, “Our message to Congress today is very simple. We all agree that we should do everything in our power to fight illegal gambling – including illegal betting on college sports. It is wrong, however, to blame the legal and very rigidly controlled gaming in Nevada for illegal activity taking place outside our borders.”
Speaker Dini said there had been misinformation and misunderstanding of the Nevada gaming industry throughout the country. Nevada worked very closely with the National Collegiate Athletic Association (NCAA) and law enforcement to eliminate illegal sports betting. Nevada’s economy and many jobs in the state depend on the gaming industry whose regulatory process was very comprehensive and rigid. He continued,
Control of gambling within our borders is a power reserved to us by the Tenth Amendment to the U.S. Constitution. In our state, we consider the regulation of gaming not only our right as a state, but as a very serious responsibility. Any proposal to take away that right and responsibility is not necessary, and it is not in the best interest of our common goal of curbing illegal sports betting.
Speaker Dini concluded saying there were two ways Nevada could protect itself against the proposed infringement of its rights and the threat to its economy – a fight in court or persuade Congress to recognize that legal, rigidly controlled sports betting in Nevada was not the problem. He hoped that a court battle could be avoided and Nevada’s voice would be heard.
Bob Faiss, Adjunct Professor, Boyd School of Law, introduced former U.S. Senator Richard Bryan. A year ago, former U.S. Senator Richard Bryan was a senior member of the congressional team of Reid, Bryan, Gibbons and Berkley in the fight to “save the life of Nevada’s sports book industry.” He appeared for the first time as a private attorney to support the legislature’s effort to achieve that goal. Senator Bryan said it was important to support the congressional delegation in Washington D.C. and indicate to them there was strong bipartisan support in the legislature to oppose the ill-conceived proposal to prohibit legal sports wagering in Nevada.
Senator Bryan shared his perspective of the congressional hearing because he believed there was some common ground. Illegal sports wagering was a serious issue on the nation’s college campuses, and it was a serious problem for many students. NCAA estimated every college campus had student bookies and illegal gambling was a growing problem among students and student athletes. Twenty-three percent of students gambled at least once a week…between six to eight percent of those students were problem gamblers. Unfortunately, NCAA’s solution to the problem simply missed the mark. The National Gambling Impact Commission estimated illegal sports wagering in the United States ranged from $80 billion to $380 billion. In contrast, legal sports wagering in Nevada last year totaled approximately $2.5 billion with only one-third of that amount wagered on college sporting events. That represented less than one percent of all the sports wagering that occurred in America.
At the congressional hearing, it was obvious the NCAA proceeded from a misguided premise. The NCAA believed if the legislation they sponsored was enacted, newspapers in America would no longer publish the point-spread, the projected win-loss margin of various college athletic events. Senator Bryan believed that reasoning was flawed. The First Amendment gave newspapers the right to publish such information. NCAA believed the newspapers would voluntarily refrain from publishing that information, the point-spread would no longer be available, and therefore the problem could be cured with such legislative approach. The newspaper association made it very clear in later correspondence to Congress that they would not refrain from publishing that information. Surveys had been taken of their readers, which showed the readers sought the information not for wagering but to follow their home team. There was also a notion the only source for this point-spread information came from Nevada, Las Vegas in particular. As committee members know, that information was available from many different sources including 800 and 900 telephone services, on the Internet, and other sources far distant from Nevada. So, the underlying premise, namely that the legislation would prevent the publication of the point-spread, was indeed flawed; Senator Bryan suggested that the basic premise of the legislation was badly flawed.
Senator Bryan then spoke in regard to the role of college presidents when addressing serious problems. Dr. Charles Wethington, President of the University of Kentucky, participated in the Senate Commerce Committee hearing. Dr. Wethington was asked if any student had been prosecuted for conducting illegal sports wagering on the campus…he answered in the negative. Dr. Wethington was asked if any student had been subjected to any university discipline as a result of that type of illegal activity…he responded in the negative. Dr. Wethington was asked if the University of Kentucky published a code of student conduct indicating that type of conduct was not only illegal but would not be tolerated on the campus…he responded “no” but the university intended to publish such guidelines. The point that Senator Bryan was making was that much needed to be done but the university campuses had a responsibility to address this problem as well.
Senator Bryan said the NCAA was invited to testify before the National Gambling Impact Study Commission on November 10, 1998, at a hearing held in Las Vegas. They were asked to provide their perspective on sports gambling and its impact on college students. They were requested to submit additional information to the commission, and they did so in a letter to the commission dated January 28, 1999. It outlined a number of recommendations aimed at addressing the problems of sports wagering on college campuses. Included in the recommendations were the following:
(1) Gaming education awareness among young people;
(2) Industry imposed curbs on youth exposure to gambling advertising;
(3) Government grants for the development of gambling education programs;
(4) Government funded national summit to examine the impact of sports gambling on youth;
(5) Training for health care professionals in screening gambling disorders among youth; and
(6) Greater enforcement of existing sports gambling and consumer laws.
Curiously, there was no mention in the NCAA letter of recommendation of banning legal wagering on college sports in Nevada. In fact, in sworn testimony before the study commission on November 10, 1998, Mr. Bill Saum, the NCAA Director of Agent, Gambling and Amateurism Activities, stated
The NCAA is opposed to legal and illegal sports wagering but much like this commission (referring to the National Gambling Impact Study Commission) we have not drawn a moral line in the sand, that we are going to come out and attempt to change the law. Certainly, we would be adamantly opposed to any further legalization across the United States. If we are going to have sports wagering, let’s keep it in Nevada and nowhere else. Let’s not allow individuals to wager from outside the state lines. So I don’t think you will see the NCAA start a campaign to remove sports wagering from the state of Nevada.
Senator Bryan was not aware of anything that should have changed the NCAA’s position.
Vice Chairman Manendo asked Senator Bryan, based on his perspective from the U.S. Senate, what he thought the motivation was behind the ban. Did he think it was because of the moral opposition, in general? Did he think this was the first step?
Senator Bryan said there was a legitimate problem with illegal sports wagering on campuses across the country. What he found particularly disturbing was the minimal efforts undertaken by college presidents themselves. There certainly was a failure of responsibility on behalf of the college presidents in addressing the issue.
The NCAA recently signed a contract to cover college sports for $6.2 billion dollars over a period of 11 years, but little effort was made by the NCAA to address the problem in terms of staffing levels. And yet somehow it was suggested the solution to the problem would be the legislation before Congress. Senator Bryan hypothesized it could be an attempt on the part of the NCAA to deflect the responsibility from itself and make Nevada the scapegoat. But it would not address the issue, which was a legitimate concern, to eliminate illegal sports wagering on America’s college campuses. This action could drive the illegal sports wagering further underground.
Assemblywoman Angle asked Senator Bryan for a legal opinion regarding what the possibility of persuading Congress would be and how far Nevada should be willing to go as a state to pursue this as a Tenth Amendment subject.
Senator Bryan said all four of Nevada’s congressional representatives were fully committed and energized for this difficult challenge. On the merits alone, discounting emotions and looking at it from a strictly logical side, it made no sense at all to focus on less than one percent of college sports gambling activity in America believing it would solve the whole problem. In respect to the Tenth Amendment, clearly recent court decisions had reinvigorated the Tenth Amendment. It was Senator Bryan’s hope the congressional legislation would not be enacted and Nevada would not have to deal with the issue.
Senator James reported the Professional and Amateur Sports Protection Act, in place since 1992, made sports betting illegal all across the country. Since Nevada was granted an exception from that law, Nevada would be trying to hold onto that exception. “Did this become politically problematic? How could Nevada address that issue?”
Senator Bryan said no one was trying to underestimate the difficulty of this issue since it was Nevada-specific. The congressional delegation had put together a piece of legislation that addressed the key points the NCAA testified to over a year ago at the National Gambling Impact Study Commission.
U.S. Congressman James Gibbons, Congressional District 2 of Nevada, presented a brief summary of the efforts in Congress to address the problem of betting on the nation’s college campuses. “By supporting A.J.R. 2, you are sending a message to our congressional colleagues that Nevada’s gaming industry is legal, licensed, highly-regulated, and most importantly, not to be linked to the illegal sports betting epidemic on America’s college campuses.” Congressman Gibbons said it would be an uphill battle in Congress. Nevada was fighting to protect the state’s number one industry and thousands of employees who expect Nevada to protect their jobs and livelihood. BUSINESS WEEK stated the “NCAA is looking to fix its image with a bill only a bookie could love.” BUSINESS WEEK understood that Nevada’s highly-regulated gaming industry was currently the only tool the FBI had in its power to identify and investigate any illegal point-shaving scams on college campuses outside of Nevada. Mike DeCourcy of THE SPORTING NEWS said “the NCAA has put no thought whatsoever into its push” and “this is strictly a public relations move that offers no tangible benefits.”
The Nevada delegation’s legislation in Congress contains tangible benefits. HR 641, The National Collegiate and Amateur Athletic Protection Act of 2001, would attack the problem of illegal sports betting. The bicameral-bipartisan legislation would provide an immediate impact on this problem, increasing penalties on illegal betting and mandating studies into betting among minors and on college campuses. It would require the U.S. Attorney General to establish a taskforce to enforce current federal laws. It would increase penalties for crimes, including a 10-year sentence for each offense and would provide for a study of the illegal sports betting of minors. It would further provide for a study on illegal college sports betting and would require colleges and universities to implement programs to curtail illegal gambling while maintaining zero tolerance policies.
When you look at the facts, when you study the problems and proposed remedies, it was clear that supporting HR 641 provided federal lawmakers the only opportunity to remedy illegal betting on the nation’s college campuses.
In closing, Congressman Gibbons quoted George Will, a staunch-conservative political columnist, who said, “There is no plausible theory, let alone persuasive evidence, that the legality of sports gambling in Nevada is responsible for sports gambling nationwide, or for gambling scandals.” A.J.R. 2 and HR 641 were clear, common sense approaches to the problem.
Assemblyman Brower asked Congressman Gibbons if the NCAA bill was considered “cosmetic,” did that mean it was a harmless approach? Would it not send the wrong message to college students; the way to solve the problem would be to find a scapegoat as opposed to tackling the real problem head-on?
Congressman Gibbons believed the term “cosmetic” showed it had a “cover up” value; it would cover up NCAA’s failures regarding the issue of illegal gaming. And it could cause great harm to Nevada. It could harm the thousands who had legal employment in an industry that was legal in Nevada; it could harm the image of the state that had no interest in participating in any illegal point-shaving scams that had taken place on college campuses around the country. With great confidence, Congressman Gibbons believed Nevada was not part of the problem.
Senator Wiener asked Congressman Gibbons what the companion bill in the Senate was and did it mirror the House bill? Congressman Gibbons responded the companion bill was SB 338 and it did mirror the house version.
Senator James asked, in regards to the Professional and Amateur Sports Protection Act of 1992, where was the NCAA when that law was passed? And secondly, once it was enacted creating an enforcement mechanism, what part of that law had the NCAA used to address illegal sports wagering? It was amazing that ten years ago a law was enacted that made sports wagering illegal, but illegal gaming had become a $380 billion business.
Congressman Gibbons reported he was not part of the federal legislative branch of government ten years ago, and thus was at a loss as to the full background of that law. But Congressman Gibbons felt that was a very valuable question to ask the NCAA as to their role in the legislation and their subsequent enforcement efforts. Nevada was “grandfathered” into the legislation because of the pre-existence of legal gaming in Nevada.
Assemblywoman Angle asked Congressman Gibbons’ opinion regarding how many other states had indicated support for HR 641 and the possibility of passage of this bill.
Congressman Gibbons said HR 641 had just been introduced and it was still early. The attempt had been to be bipartisan and an effort was being made to obtain additional co-sponsors as the legislation proceeded toward its hearing. The issue of support was emotional; the states did not understand it and did not want it in their states. The challenge would be to educate his colleagues on the merits of HR 641 and SB 338, and why the NCAA’s position was misguided. Congressman Gibbons was confident that, with the education and the facts, he would be able to sway others’ opinions on the legislation. It was also hoped, after comparison of the NCAA’s legislation and HR 641/SB 338, the NCAA would join Nevada’s effort to address the major problem on the campuses. Nevada was not the problem; the problem was illegal gaming.
Senator Porter said the committee was working on legislation that would send a “unified voice from the state of Nevada” and all the elected officials who had signed onto this resolution. But beyond today, what could be done as a community of elected officials? What could be done as a community of businesses, and a community of working men and women that depend upon sports wagering for income and for future growth? What could be done beyond what was being discussed?
Congressman Gibbons believed A.J.R. 2 was a valuable tool. Each member of the committee had certain associations and relationships with colleagues in other states. The effort ought to be a “grass roots” effort and be directed at supportive legislation; public interest needed to be broadened.
William Saum, NCAA, read selections from a prepared statement (Exhibit D) giving general information about the NCAA, as well as bill-specific information including:
(1) Impact on the Integrity of the Sports Contest;
(2) Impact on Student Athletes;
(3) National Gambling Impact Study Commission Recommends Ban on College Sports;
(4) Legal College Sports Wagering Operations Provide Avenue for Illegal Sports Wagering Money Laundering;
(5) Discontinuation of College Sports Wagering Would Not Result in a Serious Threat to the Nevada Economy;
(6) College Sports Wagering Serves as a Gateway for Youth to Addictive Gambling Behavior – Youth Gambling Problem is a Concern;
(7) NCAA Takes Concrete Steps to Address College Sports Wagering – Adopts No-Nonsense Policies and Education Outreach Programs; and
(8) The NCAA and its Membership are Committed to Improving the Student-Athlete Experience.
Mr. Saum concluded his testimony with this statement:
Legalized amateur sports wagering in Nevada continues to blunt efforts of the NCAA and higher education to combat college sports wagering. The insidious effect of legalized wagering on college sports has crept far beyond the Nevada state line. Even though sports wagering is illegal in nearly every state, point spreads on college games are published in newspapers across the county, bookies are common fixtures on college campuses and new technologies allow bets on college games to be placed over the Internet or in a casino in innovative ways. The dollars involved are big and escalating every year. By clearly making gambling on college sports illegal everywhere all the time, we will strengthen our efforts to maintain the integrity of college sports.
Senator Titus stated she was unaware of problems with illegal gaming on the University of Nevada at Las Vegas (UNLV) campus. She was not aware that the UNLV student code of behavior had a provision about illegal gaming. Did all of the NCAA participating institutions have policies in place? Was there evidence of illegal gaming on the campuses?
Mr. Saum reiterated there were over 1,100 institutions that belonged to the NCAA; the majority did not have policies in their “student life handbooks.” NCAA had dealt with this situation for several years. The National Association of College Student Personnel Officers (NACSPO) was involved in a NCAA task force to deal with issues on their campuses. Sometimes it took a negative activity to result in a positive reaction, Northwestern was such a case. NCAA experience and studies not conducted by NCAA report there was a problem on the campuses, where up to 25 percent of Division One college football and basketball players gamble. NCAA planned to complete a study in the spring and fall of 2001 including a geographic segment of Nevada campuses. Mr. Saum assumed Nevada students were gambling on Nevada campuses.
Senator Titus asked to obtain a copy of the student handbook/policy from the Nevada campuses. And if there was no policy, the universities should be encouraged to adopt one to show concern about illegal gaming.
Chairman Anderson recognized representatives from both University of Nevada at Reno and University of Nevada at Las Vegas in the audience. They had not signed in and were not scheduled to speak. Chairman Anderson asked that Allison Combs, Senate Committee Policy Analyst, and Nicolas Anthony, Assembly Committee Policy Analyst, obtain the requested information.
Senator Care asked two questions: (1) what was the NCAA’s position when the federal legislation was enacted ten years ago, and (2) what specifically happened since November 1998 that the NCAA felt so compelled to make the federal legislation so necessary? Senator Care asked for names of schools and incidents, specifics not generalities.
Mr. Saum reported that in 1992 Rich Hillard, NCAA Director of Enforcement, and Dick Schultz, NCAA Executive Director, testified by written or live testimony representing the NCAA. The legislation “closed the loophole” in 46 states. It gave New Jersey one year to enact sports wagering legally in their state; New Jersey chose not to act on it. Thus, it “closed the loophole” in 47 states. That left three states that were grandfathered into the legislation including Nevada, Delaware and one other. Mr. Saum said that Delaware and the other state did not conduct sports wagering as the NCAA understood it, which left only Nevada. The choice was to fight the fight for all states, or “close the loophole” in the majority of the states and not fight Nevada.
In 1998 when Mr. Saum testified before the National Gambling Impact Study Commission in Las Vegas, it was debated as to what the testimony was to be. At that point in history, it was decided that a proposal to make sports wagering illegal in Nevada would not be an appropriate recommendation. It was believed that other ideas put before the commission had great merit. So the choice was made not to speak about the issue in Nevada. Mr. Saum also reported that Reverend Dobson, Focus on the Family Ministries, admonished the NCAA for not dealing with the issue.
Assemblywoman Buckley asked which was considered more of a problem – illegal sports wagering or legal sports wagering?
Mr. Saum reiterated the NCAA is in opposition to sports wagering – it was a non-negotiable point. There was no room in intercollegiate athletics for sports wagering. There was illegal wagering going on at the campuses and the college athletes were a part of it. The NCAA believed that was wrong. Mr. Saum said if NCAA sent a message that sports wagering was wrong, let the NCAA tell them that it was really wrong because it was illegal everywhere. The NCAA was not against sports wagering because it was legal or illegal, the NCAA was against it because it was wrong.
Assemblywoman Buckley asked Mr. Saum if he had faith in the Nevada regulatory system?
Mr. Saum related his experience “working the strip” in Las Vegas in 1996-1997 meeting with the security staff in many of the casinos. There was a sincere effort to open the doors of communication between the NCAA and Nevada. Did the NCAA believe in the system, absolutely! Did the NCAA believe it had integrity and credibility, absolutely! Did the NCAA believe it worked, absolutely! Did the National Gambling Impact Commission and the Control Board cooperate with law enforcement, absolutely! But, to the best of their knowledge, the system had never prohibited a point-shaving scandal from occurring. Nevada had always helped prosecute in regard to providing records, documents and videos, et cetera.
Senator James asked how effective the NCAA had been making sport wagering illegal by “closing the loophole” in 47 states, as there now existed a $380 billion business. He also noted that if sports betting corrupted the integrity of the contest, and only $2.5 billion was attributed to betting in Nevada casinos, the efforts of the NCAA should be focused on the “900 lb. gorilla” of the problem instead of on the “mouse” in Nevada.
Mr. Saum said his first day on the job was the day the Boston College illegal sports wagering scandal broke, where 13 football players were found to have wagered illegally with student bookies. From that day forward, after meeting with the FBI, the NCAA had been diligent, aggressive and exhaustive in their attempts to gather law enforcement enthusiasm to enforce the law. He had met with the FBI, state attorneys general, local and campus security, and Attorney General Janet Reno’s advisory council, which was made up of 22 U.S. attorneys, to make presentations and request law enforcement to step up and assist the NCAA.
The NCAA did have an enforcement staff, but it did not have badges, it did not have guns, and it did not have subpoena power; it did the best it could within the rules and regulations that the membership had given the NCAA. Did he think that there needed to be more law enforcement, absolutely! Should prosecutors prosecute, absolutely! Should judges sentence so the prosecutors would prosecute so the cops would investigate, absolutely! The NCAA talked to all those people. The NCAA wanted them to be involved; the NCAA encouraged their involvement.
Senator James was unsure as to whether Mr. Saum had answered his question. He restated his question, “What would a ban on one state accomplish if it did not work on all the others?” He went on to ask if Mr. Saum was concerned that when the NCAA did this it would obliterate the only really effective law enforcement investigative body that was tooled and trained for the last 50 to 60 years to ferret out this type of corruption.
Mr. Saum said there had never been a point-shaved game prohibited, consequently the NCAA was willing to live without the contributions made toward the point-shaving cases that came afterwards, the backend monitoring. With the NCAA bill and the Nevada delegation’s bill, Mr. Saum believed something would finally happen with law enforcement.
Chairman Anderson said the Nevada Gaming Commission had put forth new revisions to the regulations regarding wagering. One such revision added a new category, “the black book,” that listed those unsavory characters banned from Nevada casinos. Had the NCAA submitted any names to Nevada for inclusion in the “black book?”
Mr. Saum was not aware of any names being submitted by the NCAA to the Nevada “black book,” he did not know that the NCAA could submit names. He believed those who had been convicted and the athletes who did the point shaving were probably already in the “black book.” He said he needed further education on the “black book.”
Mr. Nolan asked why the NCAA treated legal and illegal sports wagering the same, when in previous testimony Mr. Saum acknowledged the difference between the two. Where was the evidence that legal sports wagering fuels the larger illegal sports wagering trade?
Mr. Saum explained several connections between illegal sports wagering and gambling debts that led to point-shaving schemes and legal sports wagering in Nevada. In those cases, illegal and legal sports wagering were intertwined. The illegal activity of a point-shaving case began outside of Nevada, and sometimes was intertwined with the illegal side on a college campus or in the community. But in the majority of cases the money was wagered legally in Nevada.
Mr. Nolan expressed his opinion there was a clear distinction between what was legal and what was illegal; and those activities were illegal.
Senator Porter verbalized a cartoon of a fly and termites. The homeowner was chasing the fly with a huge flyswatter while termites were eating the home’s foundation away. If the termites represented the bookies throughout the country and Nevada was the fly, it seemed that a tremendous amount of effort was going into trying to swat the fly, when in reality effort should have been focused on the termites. Senator Porter asked Mr. Saum what the NCAA budget was and what amount had been used toward prosecution of illegal gambling.
Mr. Saum reported the NCAA had operating revenues of $303.3 million for the year ended August 31, of which $18 million was the operating budget for the national office. The NCAA had invested a substantial amount of time, money and personnel in motivating, educating and requesting law enforcement to prosecute. The NCAA had filed lawsuits against Internet sites that used the NCAA trademark and against individuals who used the NCAA trademark in regards to illegal sports wagering. The NCAA had become aggressive in that area. Within the enforcement staff there were four directors and 15 investigators. At over 300 Division One institutions, there were compliance coordinators who had been educated about gambling. These coordinators were NCAA’s voice on campus --“grass roots” officers.
Senator Porter asked Mr. Saum if the NCAA felt successful in its efforts to see the bookies prosecuted? How many bookies were being prosecuted across the country?
Mr. Saum said the NCAA was never going to prosecute anybody – that was not its job. The NCAA worked closely with the FBI, but the FBI’s top priority was terrorism not gambling. As far as the number of bookies that had been prosecuted, Mr. Saum said that had not been monitored but he could do a survey of the states’ attorneys general to get that information. The NCAA took no credit for the prosecution of bookies across the United States.
Assemblyman Oceguera asked how many students had been expelled in the last year, how many had been referred to law enforcement, and how many of those were in Nevada?
Mr. Saum said any case the NCAA was involved in, when appropriate, would be referred to law enforcement. He did not know how many students had been expelled from school or how many had been removed from participating in sports. The NCAA sanctions had been clarified even more – when a student bet with a bookie, that student was done for the year. It did not matter whether the student bet $1 or $1,000. That rule had become effective last August.
Vice Chairman Manendo stated there were approximately 90 sports books in Nevada, an estimated 500,000 bookies in the United States and hundreds of websites that took wagers. How would eliminating the 90 sports books in Nevada significantly reduce the outlets available?
Mr. Saum replied any type of sports wagering was inappropriate on college athletics. Any time an adult wagers on a child was inappropriate. Whether it was legal or illegal was not the NCAA’s position, the NCAA believed that sports wagering was bad because it “fundamentally does not jive with what athletics should be.”
Vice Chairman Manendo clarified that the NCAA believed when the 90 sports books were closed, the 500,000 bookies would go away.
Assemblywoman Koivisto asked why the responsibility for this situation was not being placed with the institutions, the college presidents, and the college athletic directors. Why was Nevada made the babysitter?
Mr. Saum gave an analogy of a pie. There were many pieces of the pie, Nevada was a piece of that pie, NCAA was a piece of the pie, law enforcement was a piece of the pie, and illegal bookies were a piece of the pie. College presidents should be held responsible and they were a piece of the pie. The issue was not about the NCAA against the state of Nevada. It was about eliminating sports wagering on athletics. He never said if sports wagering were made illegal in Nevada, that it would all go away – a piece of the pie would go away.
Assemblyman Brower said the committee had a high level of confidence regarding the correctness of the issue. The committee wanted to talk about the facts, not put forth an emotional plea. Assemblyman Brower asked if the NCAA would be willing to endorse the Nevada measures as a way of combating the illegal gaming problem in this country?
Mr. Saum said the NCAA was willing to discuss those bills but some components of the bills were considered unacceptable by the NCAA, such as the federal funding being attached to the institutions on particular actions. The NCAA suggested much of what was proposed in the bills several years ago.
Assemblyman Brower asked if 98 percent of the money gambled in this country was gambled illegally and only two percent was gambled legally, if you eliminate the two percent, did not that make 100 percent of the sports wagering in the United States illegal? Did you really think the passage of the NCAA bill would make the bookies go away?
Mr. Saum quoted results of a 1999 Gallup poll that showed a majority of those surveyed did not support gambling on sports as an acceptable way to raise “state revenues.” The Gallup poll also showed the majority did not agree that gambling should be allowed on athletics.
Senator Care stated student gambling may be a problem, but student drinking was also a problem. What about student drinking attached to athletic events?
Mr. Saum said the NCAA was an association. The schools created the laws and the NCAA enforced them. The schools made their own decisions regarding what happened on their campuses. Many schools did not allow alcohol and did not accept advertising. The NCAA had a policy book that was full of rules and regulations in regards to cigarettes, alcohol and gambling. There should never be a brochure, a sign in an arena, or anything related to the NCAA that would include any type of advertisement promotion of gambling, alcohol or cigarettes. It was part of their procedures and part of the contract.
Senator Porter was aware the NCAA had received numerous invitations for discussions from the Nevada delegation and the regulators in the state of Nevada, but the NCAA had not responded to those requests. Was there a reason the NCAA chose not to respond to the requests to sit down and have a reasonable discussion?
Mr. Saum was only aware of one invitation, which was to this hearing. He knew there had been communication with the regulatory side of the NCAA and the NCAA had responded to by letter, declining to participate in the discussion at that time. Again, for the NCAA there was no negotiating position. There were issues in which the NCAA could not participate.
Senator Porter believed Nevada, with one of the finest regulatory bodies in the world, could offer a lot to the NCAA and the other 49 states to enforce illegal wagering. Why not capitalize on one of the finest networks of law enforcement to look for ways to help the other 49 states? Why would the NCAA not want to share some of Nevada’s expertise to help crack down on illegal wagering?
Mr. Saum replied there was no issue there. The NCAA would love to share the expertise and gain from the expertise. The NCAA just could not sit down and discuss how to make legal sports wagering better!
The following documents were also submitted by the NCAA as exhibits without verbal testimony:
Exhibit E – How the National Collegiate Athletic Association’s revenues are distributed.
Exhibit F – NCAA – National Collegiate Athletic Association (general brochure)
Exhibit G – Don’t Bet On It…Don’t gamble on your future
Exhibit H - 2000 NCAA Membership Report
Chairman Anderson stated Nevada was part of the solution, not part of the problem.
Brian Sandoval, Chairman of the Nevada Gaming Commission, wanted to “clear the fog” created in the room. Over the past year and during the hearing, no specific example had been presented that would bring to the Gaming Control Board’s attention or the commission’s attention that there existed a problem with the NCAA discussing legal wagering. And that was why the Nevada Gaming Commission had invited the NCAA five times to attend its meetings – all invitations were rejected.
Mr. Sandoval remarked how Nevada had been instrumental in stopping the point-shaving at the Arizona State University game. He even quoted the FBI in regards to the invaluable help Nevada had been. Mr. Sandoval then went on to discuss some aspects of the Northwestern case, which was based on testimony by a convicted felon. Some amendments to the regulations governing sports betting made since 1995 and the Northwestern scandal would have helped detect questionable or large wagers. They included, but were not limited to:
He also mentioned several recent amendments made to strengthen the sports regulating system and further protect athletes and the fans’ trust in the games they play.
(1) The commission removed the long-standing prohibition against betting on UNR and UNLV sporting events. The removal of the ban would assist in the protection of Nevada athletes from predatory influences of illegal bookmakers.
(2) The commission banned wagering on Olympic and high school sports. Nevada had never allowed legal wagering on high school sports. Legal wagering occurred only once on an Olympic event when the “dream team” played in the 1992 Olympics.
(3) Gaming licensees would be prohibited from knowingly accepting wagers from athletes or coaches on the intercollegiate athletic events in which they participate.
(4) The commission adopted regulations that increased the responsibilities of licensees associated with persons who acted suspiciously when wagering on college sporting events.
(5) The commission modified the regulation governing Nevada’s list of excluded persons, or the “black book,” to allow participation of the NCAA in the process of reporting to Nevada gaming authorities persons it believed were associated with illegal bookmaking operations.
Mr. Sandoval related numerous concerns about the NCAA legislation. He believed the legislation would not fight the illegal bookmakers outside the state of Nevada, but instead would accomplish the following:
(1) Drive all betting activity underground;
(2) Bring illegal bookmakers to Nevada;
(3) Eliminate Nevada’s role as a watchdog;
(4) May cause legitimate bettors to place bets on the Internet or with illegal bookies; and
(5) Exacerbate illegal bookmaking outside the state of Nevada.
Mr. Bobby Siller, Nevada Gaming Control Board member, read from a prepared statement (Exhibit I) originally delivered to the U.S. House of Representatives, Committee on Judiciary, Washington, D.C., June 13, 2000. Mr. Siller did not believe a bill banning college sports gambling in Nevada would eliminate or significantly reduce gambling on college sports. Sports gambling was a major activity of organized crime. This legislation would drive sports gambling further underground and create a greater opportunity and possibility for organized crime influences over sports gambling. Mr. Siller suggested an alternative to banning the legalized sports gambling:
(1) Provide federal funding for law enforcement to develop and implement an aggressive strategy of zero tolerance toward illegal bookies. This strategy would target illegal bookies across the country at peak college betting times such as March Madness and college bowl games. Federal funding would encourage and provide assistance necessary for state, local and federal law enforcement to dedicate resources during those times.
(2) Increase efforts to educate college students regarding gambling. Increase funding commitment and coordination between colleges, the NCAA, and television regarding educating students on this issue.
Mr. Siller summarized, “It is my opinion that a bill banning college sports wagering in Nevada does not address the issue. The real issue and threat to college sports is illegal sports gambling – not Nevada’s legal sports gambling. I suggest we target the real causes of the problem: illegal bookies.”
Vice Chairman Manendo asked what was the result of lifting the ban on sports betting at UNLV and UNR?
Mr. Sandoval responded it was working exactly as expected. It had eliminated the market that existed for illegal betting on Nevada teams and patrons were placing legal bets in Nevada sports books, where the lines were monitored.
Mr. Dennis Neilander, Chairman, Nevada Gaming Control Board, stated the NCAA legislation was based on a faulty premise and it made no sense to take the one percent of legal sports wagering and allow it to become part of the 98 percent of illegal wagering.
Chairman Anderson voiced his concern about getting names into the “black book.” Is there a process whereby the NCAA or other agencies could get names into Nevada’s “black book?”
Mr. Sandoval reported there was a list of agencies across the country that the commission relied upon for information. So far the NCAA had not submitted any names.
Mr. Dan Wade, former member of the National Gambling Impact Study Commission, said A.J.R. 2 was a “feel good” bill and very simple. He and Mr. Bill Bible, President of the Nevada Resort Association, had worked in Washington, D.C. to educate both the houses of Congress to make sure they had a clear-cut overview; he believed that progress had been made. Many Senators and Representatives were not aware of the age requirement of 21 years in Nevada. Mr. Wade reiterated that Nevada was very scrutinized. The commission would continue to work with the FBI. It was believed the NCAA did not understand a regulated environment since their own body governed them. Mr. Wade, a former football player from UNLV, felt the NCAA needed to reevaluate what the NCAA did for the college athlete. He also reiterated his belief that college presidents should be held accountable.
Chairman Anderson asked Mr. Bill McBeath, Sports Book Director, MGM Mirage, because of time constraints regarding floor session, to submit his written testimony (Exhibit J) in lieu of live testimony at that time. Mr. McBeath agreed.
Bill Bible, President of Nevada Resort Association, a trade association of both large and small casinos, felt the NCAA actions were an effort to deflect attention from their lack of compliance activities. He also felt an action the NCAA should have requested would be amending Nevada code to give campus police jurisdiction over illegal wagering at the two university campuses.
Chairman Anderson called a recess at 11:20 a.m. to reconvene at 20 minutes after the floor session.
Chairman Anderson reconvened the hearing on A.J.R. 2 at 12:30 p.m.; a quorum of Assembly persons was present.
Bob Faiss, Adjunct Professor of Law from the Boyd School of Law, UNLV, teaches gaming law policy. He stated that all gaming law policy finds its authority in legislation enacted by this legislature and almost always through the Judiciary Committees. Mr. Faiss and his students wanted it known they did not represent the Boyd School of Law, but expressed their own individual opinions. The students present were members of a new generation of attorneys created by the Boyd School of Law; already mature and successful, they brought those qualities to a new discipline.
Rene Mancino, Boyd School of Law student, had degrees from the University of Akron in biology, physiology and biochemistry. She had won an award for her scholarship in the field of international law. She was formerly a race and sports book supervisor; she currently was operations manager of a company that provided products for the race and sports book industry.
Mark Hettinger was a member of the inaugural class at Boyd School of Law. He had a business degree from Brigham Young University and an MBA from UNLV. He currently was general manager of intellectual property and strategic alliances at Anchor Gaming, a multi-dimension gaming company.
Chairman Anderson remarked how fortunate the students were to have such an emeritus adjunct professor recognized by the American Bar Association as the outstanding gaming attorney in the entire United States. It spoke not only of Mr. Faiss’ qualifications and the type of law he practiced, but also to the quality of instruction he provided to the students.
Ms. Mancino spoke from a prepared statement (Exhibit K) in regard to federalism issues underlying the congressional sports wagering legislation. The United States Constitution set out a system of dual sovereignty that was clearly defined under Article 1, Section 8, and the Tenth Amendment. It allocated powers among the sovereigns and imposed limitations on Congress by bestowing specific powers to Congress as well as powers reserved to the states or the people. Article 1, Section 8 did not grant Congress the power to regulate a legal, state policed, and regulated sports wagering industry conducted entirely within the borders of the state of Nevada. Ms. Mancino concluded
The unconstitutionality of a congressional sports wagering legislation is clear. It does not literally fall within the specifically enumerated powers granted to Congress under the Constitution, therefore it is a power that belongs rightly to the states under the Tenth Amendment. Consequently, if this issue were brought before the United States Supreme Court, the current tenor of their Tenth Amendment case holdings support a decision in favor of the state of Nevada.
Mr. Hettinger stated much of the study with Professor Faiss was concentrated on the work the Judiciary Committees had done to maintain the historic integrity of the gaming control act. Based on his interaction with other students, he had seen overwhelming support for A.J.R. 2. His presentation (Exhibit L) covered what might occur if Nevada was forced to bring suit against the United States. Section 3704 of the Professional and Amateur Sports Protection Act contains Nevada’s exemption to that act. If Congress repealed Nevada’s exemption and took away the long-standing congressional recognition that Nevada had the constitutional right to continue the style of sports book betting it had always enjoyed, then Nevada would have an immediate claim under the Tenth Amendment against the United States to file an action in the U.S. District Court for the District of Nevada or directly with the U.S. Supreme Court. Nevada would have the right and the standing to ask for a declaratory judgment that the statute was unconstitutional. Nevada might also ask for a preliminary injunction enjoining the enforcement of this congressional action.
Chairman Anderson asked that Ms. Macino’s and Mr. Hettinger’s information be forwarded to the Judiciary Committee to keep a clear record of the information available.
Senator Care stated in the 1930s such an issue was raised not as a Tenth Amendment issue but one of interstate commerce. Could this issue be considered interstate commerce and thus allow Congress the power to regulate gaming even when particular to Nevada?
Ms. Mancino would counter that argument with the premise that legalized sports wagering within the state of Nevada was not part of interstate commerce because it was within Nevada’s borders. Therefore, she did not believe that it could be a commerce-clause case under the U.S. Supreme Court’s holdings; it would still be a Tenth Amendment case.
Mr. Hettinger said it was one thing to seek to regulate and another to seek to ban, and the court had viewed those differently. That might be a leg to stand on for Nevada because the court was not trying to regulate it, but to prohibit it.
Chairman Anderson asked, for those states other than Nevada, if in their investigations had they found a series of cases which led them to a belief that the philosophy of change in the Supreme Court would be toward stronger upholding of the Tenth Amendment; not just at the national level, but also at the appellate level?
Ms. Mancino replied she had specific case citings (Exhibit K) for cases heard in the Supreme Court within the last decade that had strengthened the Tenth Amendment.
Chairman Anderson asked for more specific information in the appellate level, but concluded he would have the Research Division review it.
Assemblywoman Ohrenschall asked for clarification on how a sports book worked, must the patrons actually be physically present in Nevada to place a bet, totally within the confines of the state? Mr. Faiss responded in the affirmative, there is no method for “phone” wagering.
Chairman Anderson remarked there was an interesting piece of legislation that the committee might deal with concerning offsite betting; it would have some controversy to it. It could broaden the scope of Nevada gaming.
Ms. Nancy Price, former University Community College System of Nevada regent, testified in opposition to A.J.R. 2. She had made herself a promise to find a model sports wagering policy and this was not “it.” She read selections from a prepared statement (Exhibit M) in regard to myths (misunderstandings) about A.J.R. 2:
Myth #1 – Advocates of the ban were the radical religious right.
Myth #2 – Gambling is “gaming,” a legitimate entertainment industry.
Myth #3 – Making college betting illegal would not stop the problem.
Myth #4 – It was not the legal gambling that was the problem; it was the illegal gambling.
Myth #5 – If you made college sports betting illegal, it would shift to organized crime.
Myth #6 – This was a state’s rights issue.
Ms. Price said she felt an obligation to express an opposing viewpoint from someone in Nevada; and hoped, as a Jewish mother, the committee felt a little guilty. Chairman Anderson said that the power of one never ceased to amaze him; and thanked Ms. Price for her testimony.
A group of newspaper articles (Exhibit N) printed off the Internet were also submitted as an exhibit without verbal testimony.
Chairman Anderson entertained a motion to “Amend and Do Pass;” the amendments being those suggested by Speaker Perkins relative to A.J.R. 2, page 2, line 37 to include a cross-reference to the adoption of the “National Collegiate and Amateur Athletic Protection Act of 2000.”
ASSEMBLYMAN MANENDO MOVED TO AMEND AND DO PASS A.J.R. 2.
ASSEMBLYMAN GUSTAVSON SECONDED THE MOTION.
MOTION WAS PASSED WITH MR. BROWER, MS. BUCKLEY, MR. CARPENTER, MR. COLLINS AND MR. NOLAN ABSENT.
Chairman Anderson said he would ask Speaker Perkins if he wanted to present the bill to the floor, or ascertain what his desire would be since there were a number of co-sponsors.
Meeting was adjourned at 1:10 p.m.
RESPECTFULLY SUBMITTED:
Deborah Rengler
Committee Secretary
APPROVED BY:
Assemblyman Bernie Anderson, Chairman
DATE: