GIA convened for food, fun, business
Pub Date: 6/1/2008
By Cole Boehler
When the Gaming Industry Association of Montana convened its annual general assembly meeting, it did so without its president present. The night before, Marc Wass decided to return to his Billings hometown since his pregnant wife's natal contractions had begun in earnest.
(Editor's note: It was reported that nature called everything to a halt that night and it was almost one week later that Marc's wife had a girl at 3:29 a.m., May 27, weighing six pounds, two ounces and 18 inches long. Congratulations to the parents!)
But GIA veteran and past president John Tooke ably handled gavel duties in the excusable Wass absence.
The group met at Chico Hot Springs, south of Livingston in the Paradise Valley May 20-21, the first day in sunshine and the 80s and the next in rain and snow. They convened promptly at 9 a.m., despite a GIA poker tournament finale that ran into the wee hours the night before.
Electronic machine permitting
Leading off, Kathy Baertsch of the Gambling Control Division (GCD) conducted a seminar on the steps involved to procure gaming machine permits via the state's new on-line electronic VGM reporting and permitting system. She supported her talk with a 16-page handout that illustrated various computer screens and step-by-step procedures.
The consensus was the new electronic permitting system was a revolutionary improvement in efficiency, speed and convenience. Baertsch also said GCD personnel are ready and willing to assist licensees with implementing the process.
Montana Council on Problem Gambling
Mark Kennedy, president of the Montana Council on Problem Gambling board of directors, was on hand to give the group a status report. He said anticipated reenue and expenses align at the present, but that services provided continue to expand so future funding must always be considered.
He said Tom Oberweiser, GCD investigations supervisor, has joined the board and crafted a program where gambling violators are encouraged to make donations to the problem gambler program which has now netted the Council almost $40,000.
He also noted the state lottery's services provider, intralot, made a donation of $25,000 early this year and that gaming machine manufacturers have helped pay for speakers at clinician training seminars.
Kennedy said past GIA Executive Director Rich Miller will remain on the Council board for the time being, and that new GIA Executive Director Neil Peterson will soon assume a director's seat.
Gaming Advisory Council issues
Tooke then moved the discussion to recent actions of the Gaming Advisory Council, a public deliberative body that functions to explore current issues, develop sound policy and advise the Attorney General and Legislature on gambling.
The ensuing discussion covered local government zoning of gambling facilities and games, the "negative tax" that occurs when gaming machines are in the hole at the end of a reporting period, and how to streamline the process of amending liquor and gaming licenses when a party to the license leaves or dies.
The GIA membership also discussed proposed legislation to clarify raffle licensing and enforcement, bingo card revisions, a new license to cover businesses peripherally involved with gaming such as accounting package providers or gaming machine recyclers and, finally, a GAC-sponsored technology conference to explore the future of video gaming in Montana to be conducted in Billings June 25. (Editor's note: You can read in-depth reports on these Gaming Advisory Council agenda items in the May, 2008, Montana Tavern Times.)
Fantasy sports pari-mutuel wagering
Next up for the GIA was a discussion of the end result of House Bill 616 passed by the last Legislature and signed into law by the Governor. HB616 allowed fantasy sports wagering with a pari-mutuel format with the bulk of the proceeds flowing to the financially strapped state Board of Horse Racing (BHR), an infusion meant to save the sport.
Tooke said the viability of the recently announced collaboration between the Montana Lottery and the BHR to instead offer what appears to be a fantasy sports based lottery scratch ticket remains to be seen.
GIA board member Steve Arntzen, who served on the BHR committee that was drafting rules to implement HB616, said he was uncertain of the status of anything regarding new rules, which are apparently heading for a major reworking.
"I guess It's let the buyer beware," he said. "Make your own decisions whether it makes sense to you. It's a gaming issue that affects us but we weren't involved. We're now out of the equation."
The original legislation stipulated that the fantasy sports pari-mutuel game be conducted only in premises already licensed for Class III gaming taverns and casinos.
October 1, 2009 indoor smoking ban
The October 1, 2009 indoor smoking ban next came up for discussion.
Arntzen said, "I beleive It's going to have an economic impact."
Arntzen is a partner in Century Gaming, Montana's largest gaming machine route vendor, and is also a partner in a Nevada vending business that services mostly small accounts, many of which have been prohibited from allowing smoking. He noted in Nevada large gaming venues such as The Strip casinos may still offer smoking, so the ban there is not comprehensive or evenly applied.
He said a careful economic projection should be circulated. Such an analysis could postulate what the impending impacts on licensees might be as well as governments.
Board member Tim Carson said options are "down to an education process."
New GIA Executive Director Peterson said regarding impacts, "One size doesn't fit all. We should sort out the fact from the fiction." He added he would begin pulling together a paper for circulation to address the subject.
Casinos as 'Money Services Businesses'
Moving down the agenda, Tooke asked for discussion on the fact that some casinos have been contacted regarding the need to register as Money Services Businesses (MSB). Apparently some bank auditors have suggested banks ask some customers who cash large checks to register as an MSB, a designation that has flowed out of the Bank Secrecy Act and concerns over illicit funding for terrorist activities and groups.
A licensed casino or card club that has gross annual gaming revenue in excess of $1 million is considered a "financial institution" under the Bank Secrecy Act. The Act specifies that casinos or MSBs that "perform currency exchanges of more that $1,000 must keep a record of that exchange by recording customer and transaction information and keep it for five years."
In addition, "Any suspicious activity must be reported to the Financial Crimes Enforcement Network. MSBs must report suspicious activity involving any transaction or pattern of transactions over $2,000, while casinos must report suspicious activity at above $5,000."
Registering as an MSB requires filling out a two-page form, and both MSBs and casinos (with $1 million in gaming revenue) must have written compliance programs and employee training is suggested.
It was noted many small establishments in the oil fields readily cash payroll checks and thus may be in line for Bank Secrecy Act regulation
Peterson said apparently no state agency has any enforcement responsibilities or reporting requirements.
UM gaming economic impact study
Ronda Wiggers, who is now chairing the Montana Gaming Research and Education Fund, said the University of Montana Bureau of Business and Economic Research has sent out confidential financial surveys to almost 500 licensed business in an effort to update a previous gaming economic impact study from 2002.
Wiggers said it is hoped the BBER study will reveal important facts from, and trends emerging in, the gaming business, such as employment levels, industry gross and net incomes, payrolls, business expenditures on goods and services, taxes paid and so on.
She urged all recipients to fill out the survey or turn it over to accounting personnel to complete, then return it to BBER for compilation.
Wiggers, who also lobbies for the Montana Coin Machine Operators Association, said good, credible industry data can be valuable for industry advocates and legislators alike when it comes to making informed legislative and policy decisions affecting the 1,700 small licensed businesses that comprise the industry.
GIA membership campaign
Executive Director Peterson reported GIA membership remains strong, but also said his board has asked him to exert concerted effort to fully develop the group's membership potential. As such, Peterson asked for member input in developing a new-member presentation.
Arntzen said he believed anyone with any stake in the gaming business should belong, contribute and benefit.
Mike Kenneally agreed, as did Tim Carson, who added, "Without new members, the old members wear out. It is time for everyone to pay attention and get involved in the industry they're in."
Tooke said, "This organization is challenging and enjoyable. It's the most effective business group I've ever been associated with. We have strong individual voices and a stronger collective voice. Members are thoughtful and put their money where their mouths are. My membership has been educational and gratifying.
"Licensees should belong for their own benefit. A broader business representation makes for a stronger group."
When Peterson asked Tooke why licensees ought to belong, Tooke responded, "I get so many calls from folks who want to know what's going on or want to complain, rather than educate themselves. These people take advantage of my involvement without contributing. Why belong? So you can survive'; so you can participate in crafting the solutions."
Carson said, "It's about communication. We all need reliable, correct and timely information. It's the networking aspect what you'll learn from your peers: new, valuable ideas."
Arntzen added, "It's nice to be able to be part of the process. Things don't just happen. Do you want to be a subject or a participant?"
Kenneally said, "It's an opportunity for business owners to have a voice," and Sandy Jones added, "We should stress the knowledge, educational value'; the learning that goes on here."
Initiatives where GIA has played a constructive roll were tallied: $10-$20 bill acceptors, multi-game platforms and bonus rounds, $800 limits on poker machines, an effective solution to the "dial-up" problem, keeping the gaming tax rate fair and reasonable, to name a few.
Tooke said, "GIA works on issues that are sometimes low on the radar, but these things often take months and years of continuous effort."
Peterson said all organizations, social and business, are facing membership challenges. "We're just not as social as we used to be'; It's very easy to stay home. We need to be proactive on membership." He told the assembled he would begin forthwith to develop member recruitment materials and a campaign.
Elections and politics
Switching topic gears to elections, Peterson said he was gratified that the five attorney general candidates all responded "without hesitation" to an invitation to attend the previous evening's social. "That says a lot about their perceptions of GIA," he added.
In summary, Peterson said, "It seems they all have good answers to our questions. None appears to have an anti-business agenda. I don't think any of them would be bad for business. I think they appreciate that We're not asking for or expecting anything except to be treated fairly and otherwise left alone. A number of them said they wanted to have our views."
Peterson indicated the outcome of the primary races are uncertain at best at this vantage.
He then walked through a short list of legislative races that were deemed key with the membership.
Peterson then addressed an initiative, I-157, to allow large, frequent raffles for the purpose of obtaining land and water access easements that has been drafted and approved. While the initiative itself makes no specific mention of using the internet, it was noted the group behind the initiative was the same as the one that proposed state-wide and national internet raffles at the November meeting of the Gaming Advisory Council. The council did not endorse the proposal. The situation will be monitored, Peterson said.
Increasing machine volatility
Under new business, the issue of increasing machine volatility was discussed. Apparently competitive pressures amongst manufacturers and machine operators has led to ever more aggressive payouts and bonus games, causing the percentage difference between coin-in and coin-out to shrink.
New, even more aggressive games have been introduced into the market during the last two years and it was noted, with apparent irony, that some of those complaining the loudest are the same operators who are deploying the highest payout machines.
It was also noted that most manufacturers are now offering software options that can limit games offered to players and reduce the number of bonus rounds which can both add to a machine's volatility.
One member said that with increasing volatility and shrinking holds, coupled with the effects of the pending smoking ban, operators now need to thoroughly educate themselves about their game software options and start making some informed choices.
It was decided a forum that involved all the industry organization would be the best venue to take up the matter, and thus it was referred to the Gaming Research and Education Fund.
Next convention, next board meeting
Missoula was selected as the 2009 GIA convention location, also in late May, and the next board meeting was to take place at the Best Bet Casino in Helena August 26.
Source: The Montana Tavern Times, June, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.