GIA crowd mulls state of gaming
Sometimes adversity is a prime motivator, and that seemed to be the case when the Gaming Industry Association (GIA) Board of Directors conducted its quarterly meeting at the Best Bet Casino in Helena Jan. 27.
At least 55 representatives of the gaming business community – a very healthy turnout – were present to assess the current state of what certainly appears to be a stressed industry and to help map strategies for the future.
The effects of the Oct. 1, 2009 full implementation of the Montana Clean Indoor Air Act dominated the group's discussion, with all members reporting declines in gaming revenues. On the upside, they noted compliance was near universal but that a few scofflaws were being taken to task by local health departments fielding complaints.
GIA President John Tooke of Miles City summarized the collective concern when he said, "This needs to be evenly enforced" for it to work as intended.
Members agreed that all involved, including enforcement authorities, were working through a learning curve regarding complaints, investigations and response. GIA Executive Director Neil Peterson asked the group if any complaints had been filed against any GIA member and the room was silent.
Sandy Jones of Missoula reported she was approached by a local health authority to inquire if she would be willing to file a complaint against an establishment suspected of flaunting the law. Jones said she most certainly would file a complaint if she could personally verify another business was not complying.
Need to self-police
Steve Arntzen of Billings agreed, stating, "There's a need to police ourselves," and Kent Frampton added, "Everyone needs to play by the same rules; we need to have the courage to sign complaints."
Heidi Schmalz of Billings said initially licensees were afraid enforcement might be overzealous, but now the fear may be the opposite, that enforcement won't be zealous enough. "If complaints are filed and not addressed, the situation will get worse," she said.
One member wondered if the decline in gaming tax dollars (estimated by several authorities to be $6-$8 million annually) would cause sufficient concern in the Legislature to avoid statutorily exacerbating the problem in the future, to which another member replied he thought there might nevertheless be even more restrictions proposed, despite the documented damage to these businesses.
Several ideas for halting declines and rebuilding the business were discussed, including enhanced customer service and increased customer entertainment. It was made clear, however, that GIA was, first, interested in preservation of the status quo when it comes to wager and payout limits and tax rates and, second, would not pursue expansion.
Improve poker
It was noted currently gaming machines offer keno and poker, but that keno accounts for 80 percent of machine play, and poker just 20, yet poker is a game of far more universal familiarity than keno and could possibly be enhanced to appeal to some of the public which does not currently play machines.
It was explained by President Tooke that back in the late 1980s Montana adopted poker rules outlined in a book published in 1982 by an authority named John Scarne, who passed away in 1985. Those rules are now antiquated and of course did not anticipate the subsequent evolution of the game.
Poker has become much more entertaining and popular now as common variations have been introduced and widely adopted, Tooke said. However, because of Montana's reliance on Scarne – only five cards and one draw – video poker play is lackluster and lags keno five to one, he said, suggesting merely allowing seven-card hands and two draws – as is done in almost all other jurisdictions – could liven the game considerably.
Blaine Bowman of Spielo Gaming headquartered in Billings, an important machine manufacturer for Montana, said Scarne rules, which haven't been updated for almost 30 years, limit video poker design creativity and the potential of more entertainment value. He suggested Montana should examine what rules prevail in other jurisdictions.
To that end, Montana should try to achieve relative "standardization" with other jurisdictions when it comes to allowable versions of poker, Bowman said, as it lends numerous efficiencies to regulation and game design. "There's a reason poker is only 20 percent of machine play in Montana," he said: "It's not as fun in Montana as it can be."
Bill Stedman of Great Falls said, "Montana has developed the best keno games in the world; we could have poker games of the same caliber."
Attract new customers
Tim Carson of Grand Vision Gaming and Amusement Service of Billings, said, "Some of our machine manufacturers already have great poker games (in use in other jurisdictions) that could be readily introduced here. We need to try to get our old customers back but we need to be able to attract new customers, too. This could be one way to do it."
Arntzen said effective poker rules, aside from wager and pot limits, really need to only address what is a poker deck and what are winning hands, but Tom Heisler, Great Falls, reminded members "tight" rules also have benefits, such as precluding house-banked games. Tooke said the current definition of what is a deck of cards and what are winning hands and their ranking is already specified in statute.
Joe McKenney then moved to have GIA work with other business associations and regulators to study if poker rules can be amended to end the reliance on the outdated Scarne guide, and to examine poker games approved in other jurisdictions. That motion passed.
GIA directors also considered new draft rules from the Gambling Control Division meant to clarify when a loan guarantor becomes a party to a license. The Legislature wrangled with the dilemma in the 2009 session and a bill was passed to address the situation but, as usual, it has been found the "devil is in the details," or, in this case, in the proposed rules.
A number of GIA directors offered their views, but the prevailing sentiment was well expressed by Arntzen when he said, "Financing is very difficult right now so we need to make sure it doesn't become even more difficult through additional burdens on lending entities."
Executive Director Peterson stressed that banks are under more federal scrutiny than ever and are looking for more security through loan guarantees. But the regulators want clarity regarding when and how a loan guarantor's interest may in fact become an ownership interest, he explained.
The proposed rules are still in draft form, Peterson said, and he was confident licensee groups, banking representatives and regulators would find the right language to make the rules functional for all interested parties. He noted the issue would come up at the Gaming Advisory Council (GAC) the following week, and so it did (see a complete report on the GAC meeting beginning on page one).
License streamlining
At this point Tooke called on Carson, who also serves on the GAC, to update the group on the council's proceedings.
Carson said a GAC subcommittee had made very good progress on streamlining the license amendment process in the event of death or divorce, or when shares are gifted from one approved shareholder to another. He said the subcommittee would stay active and also look at simplifying license amendments when a partner leaves, when the ownership percentages among approved shareholders changes and when there is a change in business entity, such as a switch from an LLC to a S-Corp.
The first two objectives have fair prospects, Carson said, but the last would prove to be the most difficult.
He reported the GAC is looking at changing a portion of statute and subsequently adopting rules to allow the Gambling Control Division to adopt win-ticket stale dates. He said there are a number of options being considered but one idea that has received some favor is a 48-hour redemption period. He noted Gambling Control has stated a stale-date would be a helpful, too, in dispute resolution.
Carson called upon Mark Ehli to brief the group on changes a group of bingo operators are seeking that could enliven the declining game. Ehli was to also report to the GAC one week later.
Ehli said the bingo group was in agreement that total "session" prizes should be limited to $3,000 with no more than two $800 games and that operators could charge up to $1 for a card. He also noted a strict definition of "session" was being proposed at 20 games or two hours with a break, perhaps as much as two hours, in between.
He stressed the new options would not be mandatory but only voluntary and that operators comfortable with all existing rules could continue as they are presently.
Carson noted Missoula Mayor John Engen is Atty. Gen. Steve Bullock's first new appointee to the GAC. Tooke said under former Atty. Gen. Mike McGrath the GAC has been a very effective tool to help the government, business and the public shape gaming policy in open forums, and that he was optimistic the council's good work would continue under Bullock.
Call to join GIA
Peterson told the board GIA's finances were tracking with expectations and that response to dues notice renewals was satisfactory, but Tooke asked anyone in attendance who was not a member to consider joining on the spot. He said, "GIA has been at the forefront of protecting and enhancing our businesses and the operating environment."
Tooke also noted candidate filings are now underway and a primary election would be conducted in June with a general election in November. He said GIA would work closely with its affiliated business associations to make sure help from business is carefully allocated where it will do the most good.
The group finalized its convention dates for May 18-19 at the Holiday Inn in Billings.