The legislative agenda for the Gaming Industry Association of Montana (GIA) remains spare, much as it has for the past decade, as its focus continues to be maintaining the status quo along with minor fine tuning.
When the GIA Board of Directors met at the Best Bet in Helena Nov. 6, just two days after the election, its discussion of regulatory statute and rule covered elimination of the "negative tax" on video gaming machines (VGMs) that have lost money, engineering changes coming to VGMs and changes to the raffle law.
It also considered efforts to curb under-age drinking, server training, the coming smoking ban and complications in the industry's dedication to prohibit credit gambling.
The group also discussed an update to a study of the gaming industry being conducted by the University of Montana's Bureau of Business and Economic Research, which it was told a draft would be ready the week of Nov. 10.
Negative tax]/b]
Board member Tim Carson, who also serves on the Gaming Advisory Council a government sponsored deliberative body that advises the Legislature and Justice Department on gaming policy told the group that the "negative tax" on gaming machines would be addressed in its own legislative bill.
An effective "negative tax" occurs when a machine loses money during a tax reporting period, but the loss cannot be credited during that period or carried forward into the next reporting period, resulting in an actual tax rate that exceeds the statutory 15 percent tax on gross gaming revenues.
Legislation is being drafted by the Gambling Control Division (GCD) at the direction of the Gaming Advisory Council to rectify the situation, which should be simple to administer given the GCD's new on-line accounting and reporting system, Carson said, acknowledging that some minor changes will need to be made to the database.
The bill draft will be presented to the Gaming Advisory Council at its December 17 meeting in Helena.
"This change will make gaming tax calculations consistent with proper tax accounting procedure," he said.
[b]Changing technology]/b]
Regarding engineering and technology changes coming to VGMs, GIA Executive Director Neil Peterson said discussions among machine manufacturers, route operators and regulators in Billings Oct. 3 had been fruitful, with all agreeing thermal printers could beneficially replace conventional impact printers in gaming machines.
The current-spec impact printers are expensive, bulky and have uncertain future availability as only two gaming jurisdictions any longer require them. In addition, the printers require machine door designs specific only to this market, adding unnecessary expense to manufacturing and making it nearly impossible to export the Montana-specific-design machines to other jurisdictions.
The impact printers now produce the player win tickets that are redeemed for cash, but also produce the audit trail on duplicate paper rolls that regulators have relied on for assuring audited compliance.
However, with the state's new automated machine reporting system, it has been conceded that reporting and compliance integrity has been improved and the costly and bulky paper audit rolls, required to be stored for two or three years, can be dispensed with in favor of computerized memory devices such as "thumb drives" or "flash drives."
The necessary regulatory changes can be accomplished via amended rules rather then through statute, Carson reported, and said he expected the rules draft to be presented at the Dec. 17 GAC meeting and adopted by early January.
The move to thermal printers and computer memory for machine data storage will affect new-manufacture machines, but retrofitting the devices to older machines will not be prohibited, instead determined by a cost/benefit analysis by machine owners. Most have indicated retrofitting would not be cost effective.
Carson said the benefits of digital record keeping and reduced storage time frames "are huge." He also noted that the current Atty. Gen. Mike McGrath, understood the issues and backed the direction of the GAC, something for which McGrath should be commended, Carson said.
[b]Raffle law revisions Carson also told the board the GAC would recommend amending the statute governing raffles to allow schools to fit the definition of "non-profit" and to eliminate the $5,000 cash prize limit. The issues arose when it was reported 50/50 raffles at  U of M Grizzly football games were popular and producing pots in excess of $5,000.
But Carson noted there is more trouble brewing with the raffle statute as currently county governments are responsible for licensing and regulation of raffles, a job which they have said they do not want and will in fact seek statutory relief to rid themselves of.
John Tooke, acting GIA president, said raffles are subject to abuse and require some level of regulation. He said the responsibility may wind up at Gambling Control, which is currently exploring a system for on-line raffle licensing. The Gaming Advisory Council will continue to pursue the issue, Tooke said.
Liquor legislation    Â
Peterson told the directors there is some activity on liquor legislation, with a push to reduce under-age drinking perhaps making headway, while the Department of Revenue was considering changes to preferences granted some applicants in liquor license lotteries.
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Applicants who have applied previously and who have operated a restaurant for one year are given a preference over those who have not when it comes to the cabaret license lottery drawings.
Peterson said there is talk of proposed legislation to criminally charge "social hosts" who allow parties on their premises where minors are drinking.
He also said convenience store owners have been examining a mandatory server training law that would squarely place legal liability on the individual who sold to a minor, rather than the owner of the business who hired the employee, a stipulation GIA agreed with. Yet members voiced concerns that it could become another monolithic, bureaucratic and expensive government program that could stymie employment prospects for "certified" trainers who had a violation.
Credit Gambling
The perennial issue of credit gambling was raised once again, this time as the result of a company operating in the state that is marketing credit card terminals ostensibly only for use to obtain cash advances for gambling purposes.
While using a credit card to obtain a cash advance for gambling is legal, to record that transaction as anything other than a cash advance is likely in violation of the credit card "merchant agreement" and that would constitute a violation of the credit gambling statute.
Gambling Control has taken this recent development under advisement and will render an opinion soon, the GIA board was told.
Board members expressed frustration that their efforts over the years to quash credit gambling are now subject to an end-run perhaps more perceived than actual by an unknown business.
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Heidi Schmaltz of Century Gaming said, "I'm not comfortable with it."
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Carson said, "The answer is real simple: have an ATM. we've worked too hard to end this (credit gambling) problem and the damage it can do to our image. I don't want to see anyone advertising, 'We take credit cards.'"
Tooke asked Peterson to comb through the credit gambling statute and rules "to see what can be done to tighten this up. we've got to knock this in the head."
Peterson was also requested to meet with Gambling Control to ascertain their point of view and work with them to curtail any subsequent problems. "If It's determined It's illegal, We're done with it," Took said, "but if it is legal, we'll revisit it and develop our options."
In addition, Tooke asked Peterson to ascertain members have posted, as required, the language that clearly spells out what and what does not constitute credit gambling.
"We need to reiterate," Tooke said, "that GIA is opposed to credit gambling and any attempt to circumvent the statute or rules."
VGM recyclingPeterson then reported Gambling Control plans to seek a legislative appropriation of $5,000 to conduct a state-wide inventory of out-of-service obsolete VGMs, and to pick them up for recycling.
It was noted $5,000 may be too little to accomplish that goal, and that some landfills still accept the machines. Schmaltz said recycling is labor intensive and expensive.
Local option sales taxes Peterson said another legislative initiative that merited monitoring was a campaign by the League of Cities and Towns to pass a bill to authorize cities to levy local option sales taxes, which inevitably land on hospitality businesses.
Member and former legislator Joe McKenney said such a law must explicitly exclude all items already paying special specific taxes, and predicted such a bill "will be hard to pass."
With that, a lunch break was taken, followed by the introduction of Atty. Gen.-elect Steve Bullock, who informally addressed the gathering of 25 gaming business operators.
Smoking banAfter the break, the GIA board reaffirmed its commitment and support for the 2005 Indoor Clean Air Act and the upcoming smoking ban set to take effect October 1, 2009.
Carson stated that he continues to encourage his location owners to
start preparing for the upcoming ban sooner rather than later. He noted the
GIA has prepared a "Frequently Asked Questions" paper regarding the smoking ban that is helpful in answering the questions of bar and casino owners.
The paper may be obtained by contacting Peterson at 406-449-2481 or e-mailing <
n.peterson@bresnan.net>.
[b]GIA membership[/b[
Next, Peterson said GIA membership has grown by 18 since April 1 and said he anticipated two to four more will be signing up soon. He noted two former members had opted to not renew.
As a result, the organization's finances appeared to be on sound footing for 2008 and heading into 2009, Peterson said.
He said he had attended a recent meeting where state budget officials offered forecasts that were encouraging, though the state employee retirement program solvency remains a question.
He also said he will contact organization past presidents to set up a meeting of the nominating committee to begin selection of nominees to fill out the officer ranks well ahead of coming May elections.
Arntzen said, "There will be a lot of opportunities for the new members to participate."
The next GIA board meeting was scheduled for January 29, the day after the MTA board meeting and legislative reception scheduled for January 28.
Source: The Montana Tavern Times, December, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.