MTA eyes 2011 session
The Montana Tavern Association Legislative and Gambling Committee knew specifically what it didn't want and generally what it did when it came to considering options that might revive flagging gaming revenues.
The subject was deemed of such importance that the committee could only take up the second half of its agenda – alcohol issues – during the full executive board meeting later in the afternoon.
The committee met at Jorgenson's ballroom in Helena June 8, following a Time and Place (convention) Committee and Public Relations Committee meeting which had commenced at 8 a.m. and 9 a.m. respectively.
Following a brief primary election analysis by MTA Government Affairs Counsel Mark Staples (the primary election was being conducted as the committee and board met), he reminded the group they had heard presentations on fully automated player tracking systems at the March 2 meeting. The subject was eventually withdrawn from discussion so the MTA board did not cast a formal vote at that time.
Staples said the board needed to speak clearly to the issue, up or down, noting player rewards systems are fairly widely in use presently, but that the potential to integrate the systems with the automated functions of the state electronic reporting system raised a spectre for some and had been the subject of much discussion for months among industry members.
"People are asking, ‘will this make things more expensive and more intrusive, or simply less labor intensive?’" Staples asked.
The floor nod went to Kent Frampton of Kalispell who has been vocal in his opposition to further automation of the systems. He said he fears it could lead to video gaming machine vendors accessing and sharing player information that should, he said, remain proprietary to the location.
Andrew Cetraro, Bozeman, said he was hoping "to get an idea of what kind of progress we can look at to stimulate our businesses. Player tracking seems progressive. I'd like the ability to know more about my customers and how we can employ more progressive thinking."
Sandy Jones of Missoula said, "I'm all for moving this industry along. There are player rewards systems available now. But we shouldn't have them shoved down our throats."
Cetraro noted operators are free to adopt or reject the systems now.
Staples said he thought the central question might be, would operators who opted out of the most advanced systems, whether uneasy with security of the player data or with the potential costs, be "left in the dust," especially by casino locations that worked closely with vendors who would supply and operate the systems. He mentioned that many operators had also expressed concerns that while it was fine for an operator to know its player propensities, many did not feel comfortable with vendors having that information.
Darrell Keck of Shelby answered, "I'm opposed to the (proposed fully automated) player rewards systems. The small guys can't afford them, so they'll get hurt. Neither can we afford multi-location operations sharing information between locations. The promotions are already aggressive and that's tough on the little guy. It will raise the price of machines again. We're not Vegas."
Great Falls' Tom Heisler said, "I'm not sure the majority understands what this does. Tier I player tracking means automated data collection in the locations, then to the state and the vendors. The state will get the numbers daily. That's 'dial-up' and that was voted down in the Legislature. The state will take the (tax) money owed right out of our accounts. And dial-up costs a lot of money. Where is that money to come from?"
Dax Cetraro of Helena said, "Our energy should be directed to re-engineering the machines. This proposal won't help the small guys. Even though it wouldn't be mandatory, it could force the small people to play catch up. We need game enhancements; better games."
At that, a motion was made, seconded and approved that MTA oppose efforts to change state law to allow full automation of player rewards systems.
Frampton then addressed other proposals coming out of a Gaming Advisory Council (GAC) committee that is studying possible "cleanup legislation."
"We want the manufacturing sector to work on our most pressing problem, which is poor profitability," Frampton began. "MTA needs to weigh in specifically on these items.
"One proposal is to allow manufacturers, vendors and locations to lease machines to each other. I'm opposed to this. We had no input. My question is, who owns the information collected from the machines? Is it to be tied to player rewards systems? Then what? This would lead to further consolidation of ownership and I'm opposed to that."
Helena's Steve Morris, who serves as the MTA representative on the GAC, suggested Frampton misunderstood the intent of the proposal and was entertaining unwarranted fears. "All this would do is allow three-way splits" of machine income. There is no implication of shared player information, he said.
"Right now there are three-way splits, except they're characterized as 'maintenance agreements,'" Morris continued. "We're just trying to allow a little more flexibility in how those agreements are structured under the law," he said. "This would force no one to do anything."
"Does this give a location an opportunity to get a better deal?" Frampton asked. "This proposal is for the vendors and manufacturers. But no one seems to want to work on our games, on our profitability challenges."
Jim Grubbs of Billings said the "lease-to-lease" proposal could contribute to some locations getting certain machines and games to the exclusion of others. "The manufacturers and vendors make all the rules," he said.
Kalispell's Bill Lincoln said, "Who is rewarded and who is punished? Our mission is to protect the interests of the license holders. If this leads to more vendor consolidation, that's not a great deal for us."
Dax Cetraro asked, "What do we take a stand on? We need innovation; we need new excitement."
Frampton responded, "We need to deal with these things first. I don't think the manufacturers and vendors take us and our problems seriously."
Staples interjected that it is difficult for all the concerned entities to be on the same page simultaneously when most only meet four times a year, and the timing of the deliberations and possible information exchange tightens considerably as legislative deadlines, and the session itself, draws nearer. "Because of our MTA quarterly board meeting schedule versus the GAC's quarterly schedule, the GAC committee didn't disseminate the information to MTA earlier so you all could discuss it and understand it before it appeared in draft legislation," he said.
With that, a motion was made, seconded and approved for MTA to oppose the "lease-to-lease" proposal. The group then approved a motion to endorse a GAC committee proposal to allow machines to be sold between the manufacturing, vending and location tiers.
Another proposal out of the GAC committee would create a task force to study the various methods of calculating bonus play win as a percentage of total machine play win, which currently is viewed differently by manufacturers and the Gambling Control Division.
Frampton said he asked manufacturers point-blank if they could with all certainty say how this might affect machine play. He said none could, since the theoretical and actual affects are often divergent.
"We need to make sure any changes will not further negatively affect machine profitability," he said, "and we need to make sure the task force understands the MTA position. We need to send a message to the manufacturers ... right now!"
Mike Kenneally of Butte said he feared changing bonus play win calculations could lead to "an obsolescence issue."
For clarification, Thom Propp of Butte pointed out, "This is not a manufacturers-backed proposal."
A motion was made and approved to oppose the proposed task until it was assured that MTA would have representation on the task force, and that the task force would clearly understand MTA's opposition to game changes that could conceivably negatively affect the operator's interest in game play.
Already, the meeting had run beyond its usual noon adjournment, so it was decided the committee would open liquor issues discussion to the entire board after lunch. See the related article on the full MTA Executive Board meeting beginning on page one.