intrastate internet gambling topped the Gaming Industry Association (GIA) Board of Directors meeting gaveled to order by President Marc Wass Nov. 1 at the Best Bet in Helena.
A federal law passed in 2006 outlawed internet and credit gambling, but allowed state's leeway to authorize intrastate internet gaming. GIA came out firmly opposed to any forms of internet gambling–intrastate or interstate–not already allowed by state law.
That agenda item dovetailed with subsequent discussions of intrastate pari-mutuel fantasy sports wagering, which the Montana Legislature authorized in the 2007 session (see detailed sidebar report on page 13), intrastate internet raffles and even intrastate internet poker and keno.
GIA Executive Director Rich Miller outlined the 2006 federal legislation, noting particularly that the law required any state authorizing intrastate internet gambling must first create and implement a mechanism to verify age and location of the participating gambler.
Miller said he had been told an entity has been expressing interest in the potential to offer internet poker and keno. He noted GIA has historically worked hard to prevent credit gambling (credit cards are typically ysed for internet gambling), backing laws and rules that clearly outlaw the practice. "I don't think we want to see any erosion of the credit gambling prohibition in statute and rules," he said.
Board member Tim Carson, who also serves on the Gaming Advisory Council (GAC), said the GAC direction has always been to prohibit internet or in-home gambling.
Member John Tooke concurred, stating, "Home gambling with credit cards is the worst of all worlds; the worst thing for problem gamblers who could sit home and smoke and play internet poker in their underwear. A lot of this is inter-twined (internet raffle proposals included) and convoluted," Tooke said. "It is a horribly slippery slope."
Tooke moved the group oppose any expansion in internet gambling, particularly for internet poker and keno, beyond that already allowed under the law, and the motion passed unanimously.
Miller said the Gaming Advisory Council, due to meet the next day, Nov. 2, was going to be taking up the issue of raffles, particularly the "50/50" versions run by colleges and schools. Under Montana law, he said, raffles are to be run by non-profit entities and rules might need to be altered to include schools--for-profit and non-profit--under that definition.
Carson said he was aware another group (Cornerstone Conservation) was going to be at the GAC meeting to discuss internet raffles, and Tooke noted, besides legal prohibitions, there would be the problems of proper enforcement and administration.
The group asked Miller to continue to monitor the situation, as well as the tendency for cities to implement ever more restrictive zoning ordinances governing not only where casinos might locate, but number of machines and types of games as well.
Miller said Helena zoning was designed to discourage casinos in the city core or in residential neighborhoods, with the effect that casinos have been forced to locate on the fringes of the city. But now, he said, some citizens were complaining entrances to the town were too dense with casino businesses.
Miller also told the GIA that the Gaming Advisory Council and Gambling Control Division (GCD) would be examining ways to smooth the license amendment process where an individual who is party to a license needs to be removed such as in cases of divorce or death.
It was noted that under current laws and rules, the death of a partner/spouse, for example, called for running the complete licensing gauntlet again, even when there are no new parties to the license.
Miller said the objective would be to cut the paperwork and investigation expense for the Division and for licensees. Tooke said he thought the burden for both could be cut by half.
Carson said a phenomena known as "negative tax" paid on gaming machine income was becoming more acute with the higher returns to players and, therefore, more volatile machines.
When a machine loses money–pays out more than it takes in –during a reporting period, there is no credit allowed for the loss, nor can that loss or negative income be carried forward into the next period where additional income might balance out the loss over time. Each reporting period begins with the machines calculated at zero income and zero loss.
Carson said the automated accounting routines ought to be able to take into consideration machines operating at a temporary loss, and allow those losses to balanced against gains. He said he would bring the issue up at the GAC meeting.
Blaine Bowman, representing VGM manufacturer Spielo, told the board a future problem could develop with the industry's–and Gambling Control's–dependence on impact printers for producing win tickets, audit tapes and duplicate records.
Bowman said only one impact printer manufacturer, Ithica, is still producing the devices, and that production volumes are declining as demand declines, all while prices are rising. He noted almost all other gaming jurisdictions have switched to thermal printers.
Bowman suggested GIA give consideration to preparing for the day when technology and a lack of availability of the impact devices could force regulators and operators to rapidly change technologies and deal with the fallout of such a change.
The current impact printers produce "no carbon required" duplicates (audit rolls) on continuous paper which regulators depend on for machine event verification and auditing purposes. Bowman suggested some way be explored to amend current regulations to reduce or eliminate this form of record keeping.
Carson said the complex impact printers have always suffered from some degree of unreliability and that with the advent of the electronic internet based machine reporting system, perhaps some way could be devised to take advantage of the now much more frequent reporting intervals to reduce record keeping requirements. Currently all operators must keep the audit tapes–in some cases warehouses full of them–for at least two years and in many cases three years.
He said he would introduce the discussion at the next day's GAC meeting.
Miller reported that licensees could expect continued pressure in the next legislature from interests that want increased and inexpensive alcohol availability.
He noted with some irony that in a few municipal jurisdictions, development and revitalization advocates are arguing for more licensed alcohol outlets in core commercial districts, while in other cities some are advocating just the opposite–pushing them to the fringes.
Miller said three Democrats and two Republicans have declared for state Attorney General, an office important to gaming business owners. Gambling Control is a division of the justice department and the Attorney General is an important influence in gambling policy as well as in shaping the Gaming Advisory Council, which studies gambling issues and makes recommendations to the Legislature and Gambling Control.
Miller said it was "anybody's race" at this early juncture and advised business owners to get to know the candidates and their positions, then help those who would be fair to small business. That applies to all offices including legislative, Miller added.
"We're a long way out from the election but candidates have not been shy about asking for support," Miller said.
Tooke said he was hopeful the eventual winner would be as conscientious and considerate as has been the administration of current Atty. Gen. Mike McGrath, and that the next Attorney General would appoint a GCD administrator as astute and fair-minded as Gene Huntington has been.
Miller said there is always talk circulating in the capitol of initiatives that activists might contemplate running. He said there is never an election cycle without someone considering an attack on gaming businesses, and that members need to remain vigilant as always. He said there is even talk of an initiative to implement state operated universal health care.
Miller said the industry-backed Gaming Research and Education Fund, which funnels support to the Montana Council on Problem Gambling–the entity that provides problem gambler services–and pays for the problem gambler help hot-line, is in need of a stable source of funding and that its accounts would need to be replenished soon.
Carson noted that there is a 25 percent annual turnover in license ownership and that "many of the new owners don't understand the history and good work behind the research and education group," and that that needs to change.
Tooke added, "It's done such good work many licensees have become soft. We need a broader membership."
At that point Mark Kennedy, President of the Montana Council on Problem Gambling (MCPG), told the GIA funding is never assured and that "we need people motivated." He said the MCPG had just conducted a highly successful training session for treatment providers, including nine therapists from the Rimrock treatment facility in Billings.
Kennedy commended Summit Gaming of Billings for covering the costs of bringing in a keynote speaker who is a highly regarded gambling treatment expert.
He said MCPG had initiated full family counseling but found that move rapidly expanded operating expenses beyond budgeted income and so had to be discontinued.
Kennedy said he was always looking for sources to augment the Council's funding and had scheduled a future meeting with state lottery system provider intralot, which contributed $25,000 last year.
GIA board member Tom Kenneally, Jr., suggested the group move forward with another round of printing and distribution of posters advertising help for problem gamblers. The posters have been displayed in many gaming establishments for years, but needed freshening, he said, and the board agreed to proceed.
Carson updated the board on the status of the GCD automated internet machine reporting system. "It works fabulously," he said, "especially the electronic machine permitting component. It's amazing how much better it has made life. The Route Trax accounting system works very well with the state's database as does the Coin Connexion system," he said.
Miller announced GIA would conduct its annual convention May 20-21, 2008 at Chico Hot Springs, and the next quarterly meeting would take place Jan. 31 at the Best Bet in Helena.
Ron Morris, Helena, was then elected to the board as John Kane of Billings had sold his business and resigned.
Source: The Montana Tavern Times, December, 2007, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.