GAC talks tabs, card tourneys, new games
The Gaming Advisory Council discussed a variety of issues during its most recent meeting in Missoula, including a proposed rule on sports tab games, a review of card tournaments, and streamlining some licensing requirements.
Licensing Subcommittee
The Council discussed some proposals offered by its Licensing Subcommittee, which was tasked with streamlining some of the paperwork concerning foreclosures, change of business location and change of entity type.
The foreclosure proposal would allow previous owners who are the foreclosing party to submit a new short application form if no change in ownership has occurred since last licensed, and the foreclosure takes place within two years following the sale. The law now requires an amended long form be submitted in that situation. If the foreclosure takes place more than two years but fewer than five years following sale, a new license application would be required.
The second proposal would allow the use of the short application form for licensees who don't have an on-premise liquor license – such as route operators, distributors, and manufacturers – when they change locations of their businesses. Currently they have to utilize the long application form upon changing locations.
The third proposal seeks to shorten the application procedure for a licensee to change its entity type – for example, from an LLC to a corporation. As long as ownership remains the same, said Shauna Helfert, administrator for the Liquor Control Division, the licensee changing its entity type can use the new one-and-one-half page application form.
She told the Council the new short form could also be used (along with corresponding documents) if ownership changes from less than 10 percent to more than 10 percent ownership.
Helfert also stated that her agency is reviewing streamlining license-type changes (for example, restaurant beer and wine to all-beverage license) so long as ownership remains the same.
Sports Tab Game Sponsors
The Council also discussed a proposed rule regarding sports-tab game sponsors. Ask explained the difference between sports tab games, which are popular in Butte and Anaconda, and sports pool boards. A sports tab game sponsor can keep up to 10 percent of the cost of the 100 sports tabs on a board for administration and other expenses. However, a sports pool must payout 100 percent of the value of the sports pool.
One of the anomalies in the law, Ask said, is that the sports tab game sponsor doesn't have to be the location operator. If a sponsor is someone other than the location operator, the sponsor would need an Associated Gambling Business License.
GAC member Steve Morris asked why the Division does not require the gambling operator to be the sponsor. Ask responded that would have to be done by the Legislature.
Member Jed Fitch stated that unless someone is actively promoting the sale of the sports tabs for a game, there is a chance of losing money if the person doesn't sell all the tabs on a board and the winner has been sold.
The Division, Ask said, will bring this issue back to the Council in May 2012 for further discussion to see if the Council wants to propose Legislation making it a requirement for a licensed gambling operator to be the sports tab game sponsor.
Card Tournaments
Council then switched its focus to proposed changes to the state card-tournament rules.
Currently a licensed operator who has a permit for at least one live card game table may conduct up to 12 live card tournaments a year. The rules are:
• Each tournament may last for no more than five consecutive days;
• At least seven days must lapse between tournaments;
• An application must be submitted to the department at least ten working days before the start of the tournament along with the $10 application processing fee;
• And the total paid by an individual to participate in a tournament may not exceed $2,500.
Neil Peterson, GIA executive director, stated that his members would like to see the Council expand the number of tournaments a location can have per year, eliminate the application fee, and improve the poker tournaments to get more people involved.
Council member John Tooke said Las Vegas casinos have a lot of “Sit n Go” tournaments where a player buys in for $10 to generate the house game of the night. Tooke said this style of tournament seems to be successful in generating more play.
He also said the industry should generate some more interest in table poker to combat the interest in internet gambling and suggested setting up a subcommittee to review the topic.
The council agreed, and Chairman Kennedy appointed council members Jed Fitch and John Tooke, GCG staffer Jeff Bryson and GIA/MTA member Kent Frampton to the Card Tournament subcommittee. Tooke will chair the subcommittee, which will report back to the Council by May 2012.
Line-game Submissions
The Council then heard from GCD's Ben Kamerzel, who gave an update on line game submissions. The Division has recently updated the requirements and test plans on the website, he said, adding that only one manufacturer has submitted its software (as of the Sept. 16 meeting).
New games usually have a 60-90 day turnaround to be approved.
Carson said a Jan. 1 start date for line games is not a reality for most manufacturers. Tooke asked about the reality that line games will be available in the field by Jan. 1. Based on his understanding of when the manufacturer's submissions will come into the lab, Kamerzel estimated that around 75 percent will be approved by Jan. 1.
If new line-game software is approved prior to Jan. 1, it can be sent to the field with the line-game portion turned off, then activated with a security code that will switch the line games on Jan. 1.
Council member Sen. Jon Sonju said he assumed the manufacturers would have the games ready as soon as the legislation was passed. But Kamerzel said development has taken more time because most of the manufacturers in Montana have not developed line games before.
Video Gaming Statistics
Ask also reviewed some statistics on video gambling machine tax collections. Fourth quarter FY11 VGM revenues were $12.76 million, an increase of $577,000 (4.7 percent) from the previous quarter, and $123,000 more than the fourth quarter FY10.
Permit renewals were down about 5 percent, but Ask said the renewals should rebound with the implementation of line games. Tooke asked how permit fees are allocated. Ask said that out of the $220 permit fee, $100 goes to local government and $120 goes to the gambling state special revenue fund that helps fund the Division.
Asked by Tooke if the decline has affected the Division's budget, Ask said the Division prepared its budget conservatively going into the last session, but if the trend continues, it will affect the budget. Councilman Tim Carson agreed that a surge in permits will come when line games begin to get approved.
Montana Council on Problem Gambling
GAC Chairman Mark Kennedy, who also is the president of the Montana Council on Problem Gambling (MCPG), reported on MCPG and thanked the industry for its support. The non-profit private organization, now in its 11th year, is funded by sponsor donations by industry groups (currently Town Pump, Montana Tavern Association, and the Montana Coin Machine Operators Association). The Gaming Industry Association, which was a sponsoring group, no longer is.
In the last year the program sponsored 969 groups with over 3,000 participants, Kennedy said. Montana is the only state, he added, that provides groups for the families of gamblers and 85 percent of the donations goes to treatment of individuals.
Morris asked if the MCPG had approached the tribes to help with funding. Council member Bob McAnally then suggested that the MCPG contact the Montana Tribal Leaders Council and approach each Tribal government through its executive departments or their gambling divisions. McAnally said he thought the Tribes would be very receptive. Kennedy voiced support for the idea and said he'd take it back to his board.
The Council then scheduled their next meeting for Nov. 29, in Helena. Ask said the Division would like to see internet gambling discussed at the next meeting.