GIA considered politics at Aug. 26 meeting
Pub Date: 10/1/2008
Members of the Board of Directors of the Gaming Industry Association of Montana assessed the direction of the political winds when they met at the Best Bet in Helena Aug. 26, and the consensus was the current political drift is at best uncertain.
Directors were told close, key races in both chambers of the Legislature would determine which party would wind up in control, and that it was too early to make accurate predictions.
Nevertheless, members were advised to keep in close touch with races and candidates in local districts, ready to help those who have demonstrated a commitment to fairness in small business regulation and taxation.
And directors acknowledged the importance of the Montana Attorney General's race where Democrat Steve Bullock and Republican Tim Fox are expected to run aggressive, well financed and "closely contested" campaigns. The Attorney General appoints the administrator of the Gambling Control Division and oversees its operation. Further, the Attorney General makes seven of the nine appointments to the Gaming Advisory Council.
The merits of both candidates for this important post were discussed, especially their apparent accessibility, and it was noted both are on the record as favoring keeping the current 15 percent gross revenue tax on video gambling machines (VGMs) in place as well as defending the current liquor license control system.
Finally, it was noted even the U.S. presidential race could have a bearing on the outcome of Montana state and local elections, where if one candidate or the other initiates a major voter swing, the coat-tail effect could be felt throughout the state's election politics.
Moving on, the directors discussed the progress being made with the Gaming Advisory Council (GAC) agenda, including "negative taxes," changing VGM technology, poker rules updates, proposed legislation to update raffle and bingo laws, and licensing of cardroom contractors and businesses that provide peripheral gaming services.
Director Tim Carson, who serves on the GAC, told members language for a bill to correct the "negative tax" on VGMs was being drafted. The "negative tax" occurs when a gaming machine loses money during a reporting period and the losses cannot be credited against the quarter's tax liability nor can the loss be carried forward into the next reporting quarter.
Regarding technological changes coming to VGMs, Carson said alternatives to impact printers in the machines are being explored. Only two gaming jurisdictions in the U.S. rely on impact printers to create hard records of machine activity and events and to produce win tickets. All other jurisdictions use thermal printers and other means such as hard-wired central computers or other computer memory devices to retain play data, it was noted.
So, Carson said, the printer issue is tied to utilizing innovative data storage methods, which will require rules or statutory changes. He noted Gambling Control Division (GCD) tests to ascertain the integrity of data collected via It's new internet based reporting system have been yielding good results, which may clear the way for new approaches to record retention.
(In fact, on September 22, Gambling Control Division Administrator Gene Huntington called a special Oct. 2 meeting of the Gaming Advisory Council technology subcommittee to discuss "how new VGMs utilizing thermal printers could store information on a USB device rather than providing audit tapes..." and to "see if there is a general consensus on how the USB device idea would work...and fit the business processes of both operators and the GCD." The meeting is to take place at 214 N. Broadway in Billings, an MSU-B campus satellite, at 10 a.m.)
On a related matter, Carson said the GAC and GCD have been working to determine how to revamp rules and statute to clearly define and expand the role of independent suppliers of peripheral devices for VGMs that are no longer supported by the original manufacturers.
That issue came to a head early this year when the U.S. Treasury issued new five-dollar bills that required updates to machine bill validators. Yet, under current regulations, some of the oldest machines almost 4,000 of them cannot be updated to run the latest bill acceptors because devices not of original manufacturer specs or approved by manufacturers are prohibited for installation in machines.
Machine operators and location operators have been clamoring for a solution and have been considering how changes in statute or rule could allow independent suppliers of peripheral device even work-arounds to install upgrades and fixes.
Carson said it first needs to be determined when a machine has been officially "abandoned" or declared obsolete by the original manufacturer. Then it must be decided "who can submit what modification." Finally, he said, what aspects of the machine are considered proprietary and which are not must also be ascertained and defined.
"We don't know the final scenario," Carson said. "There is no end result at this point. There is an ongoing conversation that is very complex."
Carson reported discussions between GCD and machine manufacturers are scheduled to assess the potential for updating poker rules to enhance the viability of the electronic game, which has been in decline for years.
"It's important that we proceed carefully," he said. "It must be approached from a progressive, evolutionary, incremental standpoint."
Carson said draft language is ready to modify existing raffle laws in order to accommodate some entities, most notably state universities, when they want to run raffles such as 50/50 games where prizes exceed the current statutory $5,000 limit, and to redefine schools as "non-profit" organizations.
He said further revisions will likely be necessary because counties, which are currently responsible for licensing raffles, have indicated they will seek legislation to get out from under that requirement, and that as raffles grow in scale, more careful regulation will certainly be necessary.
Carson said legislation being prepared will also address a few "clean-up" items, for example creating the authority to license businesses that provide certain products and services to gambling enterprises such as accounting packages that work with the state's internet reporting system.
In closing, Carson said he thought the Gaming Advisory Council "has been productive, especially in fixing things that have become antiquated. The Council works as the vehicle it was intended to be."
GIA Executive Director Neil Peterson then steered the group toward the balance of the agenda, including a brief discussion of the Lottery's "Montana Sports Action" fantasy sports pari-mutuel wagering game. (See a comprehensive report on the status of the game on page 3 in this edition.)
Peterson reported that the Department of Revenue was considering making several changes to liquor license lottery procedures in the wake of some recent developments. He said the department was rethinking the "preferences" it allowed applicants for the restaurant beer and wine license lotteries, and was considering if new floater licenses allowed in a quota area due to population increases would carry gambling privileges if there were no license lottery conducted. Currently, a lottery occurs only if there are more applications than there are licenses, a scenario that is almost certain to occur. The policy considerations would be monitored, he said.
Peterson also said some ideas for creating mandatory server training have been floated. There may be an upside, he said, in that licensees might see some liability relief if servers who had been certified nevertheless made serving mistakes.
On the flip side, he said and other members amplified, the cost could be considerable and the training content could be made onerous. In addition, servers who had violations could be prohibited from working, exacerbating already profound problems with the shortage of workers.
One director noted the under-age access problem could better be thwarted by tackling the root cause: of-age suppliers, and another said server training would be better administered through private entities rather than governmental ones.
The board decided to work in concert with the Montana Tavern Association and the convenience store owners association to assure any legislation would not create undue burdens and hardships.
In new business, the board decided to endorse the Montana Employers Council, an entity that provides human resources services and, incidentally, has launched its own server training program.
Peterson then gave a membership report, noting GIA has signed nine new members but lost two former ones. He said he was diligently prospecting and was hopeful of fruitful efforts particularly in Billings and Bozeman.
Subsequently, GIA teamed with Century Gaming, Montana's largest route vendor, to offer discounted memberships to Century customers, with Century paying a pro-rated portion of membership dues in the equivalent of its contractual revenue splits with its vended locations.
GIA President Marc Wass said he thought the clearest selling point for membership was to ask the question: "What would you pay with a one percent increase in the gaming tax rate, versus the cost of a GIA membership? The better choice is clear," Wass said.
Peterson said the new dues income should keep the group's budget in the black for this budget year. He added it was his goal to build membership numbers to the point that dues for members could be reduced.
He said two vacancies existed on the board with the resignations of Bill Wheeler and Gordy Kiedrowski and that the past presidents of the organization would nominate replacements.
With that, the group set. Nov. 6, 10 a.m. as the time of their next meeting and the Best Bet in Helena as the place, then adjourned.
Source: The Montana Tavern Times, October, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.