Senate Bill 9 Comes to Life: The (Slot) Future Is Now By A.C. Ansani This article (i) explores the groundbreaking 2015 legislation that changed Nevada gaming laws as applicable to slot machines; (ii) provides practice pointers for gaming practitioners; and (iii) considers business opportunities for clients in the gaming operator and gaming manufacturing sectors. CONT. ON PAGE 31 NEVADA GAMING LAWYER | SEPTEMBER 2016 30 SEA CHANGE (e) Accommodate secure “The continued growth account wagering and May 21, 2016, marked the one and success of the transactions using gaming industry in the year anniversary of Nevada electronic commerce; and State of Nevada depend Governor Brian Sandoval on the fostering of a announcing that he signed (f) Require, when applicable, business and regulatory Senate Bill 9 (SB 9) originated appropriate information to environment that during the 78th Regular be disclosed to a player promotes continued explaining the outcome of Session of the Nevada State advances in the use of a game will be affected by Legislature into law. technology in gaming, skill or identifiers. 2 Specifically, SB 9 amends which improves the Chapter 463 of the Nevada While SB 9 can be applicable entertainment Revised Statues by requiring to any form of game found in a experience, encourages the Nevada Gaming Nevada casino, whether a card innovation and supports Commission, with advice game, dice game, or a roulette expansion of the and assistance from the wheel, this legislation is domestic technology Nevada Gaming Control expected to drastically change section of the economy Board, to “adopt regulations the type of slot machines that of this State.” 4 which encourage manufacturers can be deployed in the state. (Emphasis added). to develop and deploy gaming Considering that existing state With gaming markets rapidly devices, associated equipment laws and regulations regulating expanding around the world, and various gaming support gaming devices evolved from the Nevada legislature wisely systems that incorporate legislation enacted in 193 1, 3 the sought to change current laws innovative, alternative and question arises as to why is 1 in order to allow gaming advanced technology.” These there now a need for such manufacturers and casino regulations may include, impactful changes to gaming operators to keep Nevada without limitation, technical laws and regulations in Nevada. at the forefront of the standards for the manufacture The answers are found both in gaming experience. of gaming devices, associated the text of SB 9 itself and in the equipment, and gaming factual circumstances of current From a factual perspective, an support systems that: operations of Nevada casinos. analysis of Nevada gaming Like any good piece of revenues at nonrestricted casino (a) Define and differentiate legislation, SB 9 provides a locations from 2000 to 2015 between the requirements well-founded basis justifying provides compelling data that for and the outcomes of a such changes in Section 1(b): would lead to a conclusion that game of skill, a game of chance and a hybrid game; (b) Allow flexibility in payout percentages or the outcome of a game as determined on the basis of nondiscriminatory identifiers; (c) Support integration of social networking technologies; (d) Facilitate among enrolled players the interaction and concurrent play of games supported by networked server computers; 31 NEVADA GAMING LAWYER | SEPTEMBER 2016 additional legislative action the increasing popularity of drafting SB 9, in order to best would be beneficial to further table games and poker to the address the concerns of the the state’s interest in remaining fact that the win per day per gaming constituency in Nevada. the world’s leading gaming machine has increased from Based on the last several years destination. From 2000 to $87.72 in 2000 to $128.46 in of analysis and research, SB 9 2015, overall total win amount 2015, 10 which would allow a should open the door for (total amount won from casino operator to maintain its Nevada casinos to offer slot gamblers) year over year has slot machine revenue levels machines that can appeal to the increased by 14.75%. 5 In while decreasing game counts. next generation of players, while 2000, overall state gaming win also preserving status quo for amount was approximately $9.6 A comprehensive analysis of the current generation of slot billion. In 2015, overall win gaming revenue trends and slot machines on casino floors and amount was a little over $11.1 machine performance in Nevada allow Nevada casinos to lead billion. 6 Slot machine win is outside of the scope of this the worldwide competition for amount in comparison, article, because there are the casino gaming experience. increased by 8.98% for this numerous factors that impact same time period. Overall slot gaming revenues. Casino machine win amount in 2000 patrons have ever increasing was almost $6.2 billion. 7 In forms of non-gaming options 2015, however, this value only available to them that compete increased to $7 billion, 8 which with gaming activities available. does not keep pace with the For instance, the top ten increase in overall state win nightclubs in the country earned amounts determined from a combined $550 million in overall gaming positions. revenues in 2015. Seven of these clubs are located in Las Vegas. 11 WHEELS IN MOTION Additionally, there is debate over There is great anticipation and exactly who the excitement as to how SB 9 will In 2000, target player is or change the way slot machines should be and slot mach1ine9 uni2ts w,er8e re4por4ted are played and what kind of whether the focus games the manufacturing throughout all nonrestricted of slot machine industry will produce. Slot casinos in Nevada. However, the developers should machine game developers are be directed toward now able to create games that state only reported 149,364 slot the Millennial incorporate a skill element, machines in 2015 throughout all generation (those either as a main game or as a ages 18-34 in 13 nonrestricted casinos. 12 bonus feature. New games 2015), or the designed with the provisions of current, older slot SB 9 in mind may also exploit a An additional factor related to player demographic, or a platform that provides a broad slot machine performance that combination of both. range of popular video games provides a more granular Furthermore, over the last that may be incorporated into method of analysis is the total decade, gaming markets have slot machines used for count of slot machines in the been expanding worldwide, communal gaming, such as first- state. In 2000, 192,844 slot ranging from the massive person shooter games or skilled machine units were reported gaming enclaves arising in word-assembly games common throughout all nonrestricted Macau and Singapore to in social media. 14 Additionally, casinos in Nevada. However, domestic expansion of casino SB 9 will allow rules extending the state only reported 149,364 gaming such as the four new social networking capacities slot machines in 2015 statewide casino gaming facility onto the casino floor that can throughout all nonrestricted licenses issued in New York. “personalize” the player casinos. 9 Numerous influences Clearly, the legislature was well experience while playing slots impact these decreased machine and socializing the experience. 15 count statistics, ranging from informed in formulating and NEVADA GAMING LAWYER | SEPTEMBER 2016 32 It is widely hoped that the workshops to discuss the impact 108, pages 396-97, 78th “new” slot machines that will be of SB 9 on current Nevada Regular Session (2015). produced will invigorate interest gaming regulations in order to On September 17, 2015, the in gambling machines and received commentary from the Commission enacted indeed the entire structure of gaming industry and formulate comprehensive amendments to modern casinos floors, all in effective regulatory amendments Regulations 4.030, 6.110 and order to better address the to Nevada gaming regulations 14 in order to effectuate SB 9. perceived needs of the next and technical standards. While One of the more notable generation of gamblers. SB 9 is intended to spawn amendments to Regulation 14 is creativity in game the addition of the definition of design, it must not a “Game of Skill” under be lost that Regulation 14.010(10). For Nevada will always the first time in the history of have a primary the state, a casino game is state interest in permitted to be played “in gaming to protect which the skill of the player, the public by rather than chance, is the maintaining the dominant factor in affecting the highest standards outcome of the game as of integrity in determined over a period of gaming products continuous play.” 16 The deployed in the Commission further approved a state. While new definition of a “Hybrid regulators continue Game,” which means a “game to balance all of in which a combination of the these factors in skill of a player and chance introducing affects the outcome of the game regulations for the as determined over a period of new games, several continuous play.” 17 Maybe the amendments to the most interesting addition to Nevada regulations Regulation 14 is the addition of and technical the definition of an “Identifier.” standards have An Identifier means “any followed. specific and verifiable fact In providing concerning a player or group of counsel to a players which is based upon As a gaming law practitioner, gaming client, a practitioner objective criteria relating to the the question thus arises as to would direct the client to the player or group of players, how to best counsel a following regulations for review including without limitation: manufacturing client that would in the embodiment of SB 9. It (a) The frequency, value or like to either produce a “new” should be noted that the Board extent of predefined slot machine or a gaming and Commission are still commercial activity; operator client looking to offer continuing their work on “new” slot machines on their amending regulations and (b) The subscription or floor.