GIA board focused on gaming 'housekeeping' bill
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GIA saw an excellent turnout of over 30 members and observers when it met Jan. 28 in Helena.
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When the Gaming Industry Association of Montana (GIA) met at the Best Bet in Helena Jan. 28, there was only one bill that had been introduced at the Legislature that commanded the group's attention: Sen. Joe Tropila's (D-Great Falls) SB86.
Of course in the ensuing weeks other legislation affecting gambling was introduced (see complete legislative report elsewhere in this edition).
Sen. Tropila's bill was the result of almost two years of deliberation within the Gambling Control Division (GCD) and the Gaming Advisory Council (GCD). The GAC is comprised of members of state and local government, the public and the gaming business. Its purpose is to advise the Department of Justice and the Legislature on gaming law, rules and policy.
SB86 was drafted back in November and referred to the Senate Business Labor and Economic Affairs Committee Dec. 20, even before the Legislature convened.
It had its first hearing Jan. 16 when the committee gave it an 11-0 "do-pass" recommendation. No one appeared in opposition. GIA Executive Director Neil Peterson, and Montana Tavern Association Government Affairs Counsel Mark Staplestestified in favor.
The bill was before the full Senate January 20 and passed 49-0, then passed its third reading Jan. 21 on a 46-3 vote. It was next sent to the House and referred to the Business and Labor Committee for a hearing, which will not occur until after the "transmittal break"—Feb. 27-28—when the two chambers cease exchanging all but revenue bills.
The measure is termed a "housekeeping bill" since it incorporates a number of relatively minor adjustments to existing statute. It has seen fairly smooth sailing because essentially all interested parties have already weighed in and signed off.
It would: provide for licensure of "associated gambling businesses," which might be providers of gambling-specific accounting packages, gaming machine recyclers and so on. It would also allow for some revisions to currently allowed bingo card formats.
It would give the Gambling Control Division authority to persue violations of raffle laws, would redefine what is a non-profit for the purpose of conducting raffles, would remove the $5,000 cash prize limit in some circumstances, would require some raffle record keeping and would specifically prohibit the conduct of raffles on the Internet.
Finally, it would prohibit the use of credit cards in relation to any gambling activity, even to obtain legitimate cash advances for the purposes of gambling.
Executive Director Peterson told the board he didn't anticipate any problems with the bill or its passage.
The board was told another GAC bill to correct the "negative tax" paid by gaming licensees when machines lose money during a reporting period had been withdrawn by its sponsor, again Sen. Tropila.
The bill would have had a $125,000 impact on the general fund so, given the fiscal realities facing the Legislature this session, it was deemed by supporters that passing the bill would be an uphill struggle. Rather than risk losing it, it was withdrawn.
Board member Tim Carson, who also serves on the GAC, told the directors that the GAC had been quite productive in the legislative sessions interim. GIA President John Tooke, who also sits on the GAC, agreed with Carson, noting the past two terms of Atty. Gen. Mike McGrath at the Department of Justice had yielded fair and reasonable regulation.
Carson said the GAC had paved the way for introduction of new video gaming machine technology that would allow the use of thermal printers and USB-type memory storage devices which could make Montana-specific machines less expensive, give them a smaller footprint, assure continue supply of printers and reduce the voluminous paper records now required.
"We need to keep working toward an environment where Montana is not so unique in the national and world gaming jurisdictions," Tooke said of the technological changes. Carson said the GCD is often looking to the Nevada jurisdiction for guidance as to how regulation could work in Montana.
Licensees reporting their machines on the Internet and using the secure data storage systems would be expected to retain records for four quarters as opposed to the current eight or 12.
Members discussed if there were other initiatives that could be spearheaded by the GAC, and Kent Frampton suggested it might be beneficial if the GCD testing lab staff could be beefed up to speed approval of new game software and hardware.
Several member spoke of a backlog of submissions to the lab, but also noted the upgrades and even brand new platforms awaiting approval are far more numerous than in the past. Carson said he thought lab submissions might begin to move a little more briskly, but noted the state is considering reducing staff by leaving more vacancies open.
Peterson said GIA was still interested in an expedited process for licensing amendments when a party to the license leaves, such as when a partner is bought out by existing partners or where there is a divorce or death. Instead, when a person leaves a license now, the application for an amended license triggers a whole new process including the re-investigation of existing parties to the license.
"This represents significant costs, especially if a licensees hires legal or professional help to handle the application," Peterson said, and also entails significant delays. Peterson said the amendment process isn't problematic regarding liquor licensure, but is for gaming. He said he thought an agency policy change could be the answer, as opposed to formal rule making.
Carson said the problem would become more significant because he said he foresees a higher rate of "license churn" coming. "We've got to see if we can't get this streamlined," he said.
Tooke suggested the reports that used to be issued to illustrate "days-in-process" for licensing should be revived as a useful tool for new Atty. Gen. Steve Bullock to monitor the efficiency of the process.
Tooke also said he remained concerned that perhaps too much of the GCD budget and resources was now being spent on tobacco tax enforcement, a job the GCD's investigations arm took on for the Department of Revenue. GCD is supposedly being compensated by DOR for the enforcement effort.
Board member Clint Lohman said he understood GCD will also be responsible for enforcing the Oct. 1 indoor smoking ban and Steve Arntzen said counterfeiting of win tickets was becoming a more pressing problem that also needed GCD's attention. Several board members said they wanted equal enforcement of the smoking ban
The new Internet based gaming machine reporting system was working well, but was in need of further refinements to some operational aspects, Lohman said, particularly further automation of some forms such as service reports and for the site's search functions.
He and Heidi Schmalz, COO of Century Gaming, agreed to begin compiling a list of improvements that could be made to the system.
Peterson told the board he had met with the new Attorney General and they specifically addressed an industry/regulatory communications protocol as well as some of the issues concerning GIA.
Peterson said, "I found him (Bullock) accessible and willing to talk. He's still transitioning into the job and gaining an understanding of the workings of a large state agency. He said he hasn't made a choice for administrator for the GCD yet, and that the right skill-set in an individual was hard to find. I assured him GIA would be willing to work with whomever is chosen."
Peterson then addressed a potential issue brewing in the Legislature between the Department of Revenue and banking interests regarding what exactly constitutes an ownership interest in a license versus a pure security interest. Both sides were seeking a compromise, he said of HB94.
The bill passed out of committee 18-0, then was approved by the House 99-1 on final reading, so has been sent to the Senate.
The upshot of the dispute, according to several board members, is that financing to purchase a licensed business could be more difficult to obtain, larger down payments could be required or loans could be recalled to be rewritten, all having the effect of driving down license values.
Peterson said the bill to revise the Restaurant Beer and Wine (cabaret) license statute, HB195, appeared to moving, having passed out of the House and to the Senate. The bill would remove a preference currently given to those who applied and weren’t successful in a previous lottery for a cabaret license.
He was less optimistic about HB211, referred to as the responsible alcohol server act. It apparently has a fiscal note attached indicating it would cost additional money to implement and operate a server training program.
In exchange for certified server training, a licensee would see some relief when it came to license suspensions and revocations due to a clerk selling to the under-aged. Some in the DOR and administration have sought additional amendments to the measure. The GIA and the Montana Tavern Association both supported it. It got a favorable 14-4 hearing in committee Feb. 10.
Peterson also said bills that would have allowed wine tastings in off-premise establishments such as grocery and convenience stores had died, as had a bill to authorize serving of "fortified" wine in restaurants.
He covered a bill to raise inspection fees at restaurants (GIA will oppose), a bill to allow "agency" liquor stores adjacent to groceries (Peterson noted MTA was opposing; it was later tabled), a bill to allow counties to write ordinances providing for penalties for "social hosts" who may knowingly allow minors to drink alcohol at a private function (MTA was supporting; it was tabled in committee), and a bill to allow some percentage of server tips to be counted toward fulfillment of minimum wage requirements (it later died in the Senate).
Another bill would authorize "strong beer" to be brewed and sold in the state that could contain up to 14 percent alcohol by volume, a bill MTA was not opposing, Peterson said. Another bill, not yet introduced, would raise alcohol taxes to pay for scholarships and Peterson said MTA would oppose.
He said several other bills had placeholders or were in the drafting process including one to revise liquor and gaming licensure and another that would move administration of fantasy pari-mutuel wagering games from the Board of Horse Racing and the Lottery to the Gambling Control Division.
And, Peterson said, there is always the biennial threat that some misguided lawmaker will suggest increasing the gaming tax rate and three bills, yet on hold, would do just that.
Peterson said a study on the economic impacts of gaming in the state being conducted by the Bureau of Business and Economic Research at the University of Montana apparently would not be released until later in the spring. Some board members expressed disappointment that the information would be unavailable until after the session ended.
Peterson said GIA membership "looks good" and that he would shift his focus back to it when the legislative session ended. The new memberships have augmented the organization's finances, and budgets appeared to be tracking well, he added.
With that, the meeting adjourned.
Source: The Montana Tavern Times
, March 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte MT. 59701