Automated reporting
Licensed establishments would be categorized in one of three tiers
Pub Date: 1/1/2003
Can you wire your machines to a site controller, automatically download data and send it to the state electronically? Or can you gather data manually, key punch it into a tax program on your business computer, then send the data to Gambling Control over the internet? Or do you prefer to stay with pencil and paper?
As currently envisioned, licensed establishments would be categorized in one of three "tiers" depending upon the sophistication of equipment at the premise and data collection and reporting capabilities.
A GAC Audit Subcommittee met Jan. 19 prior to the general council meeting the following day. John Tooke, a licensee from Miles City and a CPA, chairs the subcommittee and told the council, "We're slowly but surely getting to a reasonable approach with industry and government rowing in the same direction. This is gratifying. The result should be most beneficial to both."
Tooke said the design of the system should be such that operators are helped to move up in the sophistication of their reporting practices, rather than forced downward.
The main council question seemed to hinge on whether the various reporting tiers could be mixed and matched at a single location. It appeared that could be done but would entail another series of complications, mostly centered on a resultant mixed and matched set of record keeping requirements for each machine.
Record keeping requirements will be tied to the tiers, with minimal requirements for the top tier, to the current maximums for the bottom tier.
A Tier I location would ideally have all modern multi-game machines using a SAS communications protocol capable of automatically downloading play and event data. The information would be collected by a site controller computer on-premise which could then report to a business office central computer, which would then send to the state via the internet one report for the location or all the locations on a vendor route.
Tier I establishments would be required to report weekly but no manual record keeping would be required and tape rolls would need to be retained less than one year. These reports would rely on electronic or "soft" meter readings.
Councilman Tim Carson of Summit Gaming, said the chief incentive for moving into Tier I is ongoing real-time access to all machine data, which should prove valuable as a business management tool.
Tier II is seen as viable for establishments with some older machines that cannot be wired to a site controller, requiring data to be manually collected, then entered into a tax program and forwarded electronically to the state weekly or bi-weekly.
Data could be acquired from soft meters, but hard meter data would still need to be recorded, particularly for bi-weekly reporting. Tape rolls would be required to be kept for at least one year.
There was an additional proposal calling for machine printers to produce data in a bar-coded format that could be read and downloaded via a scanner. The idea was to reduce key-punch errors that can occur with manual data entry.
Industry representatives feared such a requirement would make operators think twice about any automation since bar-coding could involve expensive software and printer upgrades and could nevertheless remain prone to printer quality problems and further errors. The Council agreed to delete that requirement.
Tier III is for locations that require a large amount of manual data input and a high rate of bi-weekly reporting. Mechanical "hard" meters would be reported but taxes would be paid from soft meters. Tape rolls would be retained for two years.
All web-based reporting would entail one-way communication from a business computer to a central state computer.
According to a GCD issue paper, "the tiered concept assumes that as older machines are replaced, operators would move to higher tiers."
Some business owners and association representatives advanced the notion that it should be possible for a single establishment to use Tier I reporting methods for its newest equipment, but also Tier II or III for the older gear. They also pointed out some locations use multiple vendors, who might each prefer to report in different tiers.
GCD project manager Al Arvish said, too, it would be possible for a location to be classified as Tier II but utilize Tier I-type reporting practices (site controllers) for its latest equipment.
GCD Administrator Gene Huntington seemed resistant to the idea, but conceded it could probably be done but with different record keeping requirements for groups of machines and additional administrative complications.
Huntington also said his agency needed authority to test accounting systems that might be developed or employed to process machine data, to license the entities that produced them and to pilot-test systems in the field before they were approved.
In response to a question from Montana Tavern Association attorney Mark Staples, Arvish said he thought most route operators would be inclined to adopt Tier I or II status and that, if costs were reasonable, as many as 80 percent of machines could be reporting via the internet.
Carson summed up the status of the initiative when he said, "We understand as much as we can today. This is a work in progress. We need to be able to adapt as we go.
The Confederated Salish and Kootenai Tribes of the Flathead Indian Reservation laid out their opening position in newly started gaming compact negotiations with the state via a public announcement March 22.
The tribe is seeking regulatory control of all aspects of all reservation gaming tribal and non-tribal operations and taxing authority over it, a considerable expansion of tribal powers compared to the existing compact.
If no new compact is arranged, all Class III gaming on the reservation will have to end, as it did in the mid-1990s, leaving only the tribe to offer gambling of the Class II variety which features "traditional games" including bingo. Class III games are considered "casino games" such as poker and keno which are currently allowed under state law, but also other "table games" as well such as roulette, craps, black-jack and slot machines which are not legal in Montana.
Under the current compact which expires Oct. 1, the Salish and Kootenai are operating 185 Class III poker and keno gaming machines at 12 locations with gross revenues of $3.2 million a year, according to CS&KT spokesman Robert McDonald.
He said non-tribal licensees operate 371 poker and keno machines at 37 locations which are regulated and taxed by the state and have gross revenues of $5.5 million, of which the state collects $825,000 in taxes.
Initial press coverage said tribal machines grossed $11.4 million and non-tribal machines grossed $15.7 million. Instead, a later tribal clarification indicated those amounts represented the total cash-in and did not take into account cash paid out in prizes.
McDonald added that some early press accounts erroneously stated the tribe wanted control of all gaming revenues, whereas he said in a further clarification that the tribe was instead seeking the tax revenue currently collected by the state from non-tribal gaming operations.
The Tribe also operates an undisclosed number of Class II video gaming machines that have been declared by the courts to be a variety of bingo but which operate much like conventional slot machines.
The tribe is allowed to operate as many Class III gaming machines as non-tribal licensees operate on the reservation, may place as many of the allowed machines as they desire in any one location, and may offer $5 maximum wagers and $1,500 maximum payouts, whereas non-tribal operators may place 20 machines at a location and offer $2 maximum wagers and $800 maximum payouts.
The tribe is also running the slot-like Class II "bingo" machines that offer theoretically unlimited payouts. In 2005, one player won over $180,000 in a single jackpot on one of the Class II machines. Currently, the federal justice department is seeking changes to the National Indian Gaming Regulatory Act (NIGRA) that would restrict the Class II "bingo" machines.
Under the tribe's proposed new compact, the tribe alone would "license, regulate and enforce (law)...for all gaming" within reservation borders.
Further, the tribe would regulate and presumably tax all forms of gaming including video gaming, simulcast racing, calcutta pools, fantasy sports leagues, raffles and all other forms of gaming currently allowed by state law.
The tribe's proposal would authorize the tribe to, solely at their discretion, set bet and wager limits and prize limits, set the number of gaming machines, tables or devices, and to be the sole enforcement authority over all gaming on the reservation.
When it comes to tribal gaming and gaming operated privately by tribal members, the tribal government functions as the lone machine vendor and keeps 58 percent of gross revenues with 42 percent going to the location operator.
Source: The Montana Tavern Times, Feb., 2006, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.