Regulators are really the lynchpin of the casino industry.

The Good, The Bad and the Ugly

In this issue, we have an example of one of the gaming industry’s best regulatory organizations and one of the worst.

I know people will say customers and players are the lifeblood of the gaming industry, but I have to put regulators right at the top. Because if the games aren’t “square”—they must have integrity and transparency—those customers wouldn’t feel comfortable playing the games. So, regulators are really the lynchpin of the industry.

Not surprisingly, one of the best regulatory schemes in the industry is in Nevada. Our interview with Gaming Control Board Chairman A.G. Burnett clearly demonstrates that. You can read an excerpt of the interview on the Casino Commu-nications page at the back of this month’s magazine, but you should really listen to the podcast, available at GGBMagazine.com, to really get a sense of the man and the mission.

A good regulatory agency understands the symbiotic relationship between the organization and the companies and individuals it regulates. Because it was the very first regulatory scheme in the U.S., beginning in 1955 in Nevada, there were some fits and starts before it really got up to speed when the late Bob Faiss authored the modern casino regulations in the early 1970s. Faiss understood that gaming wasn’t being conducted in a vacuum, so he made the Nevada regs flexible.

And that flexibility is duly noted in the Burnett interview when he explains how Nevada came to regulate iGaming and skill games. He notes that he works with the industry to give them the opportunity to succeed, while working from the regulatory baseline of integrity and transparency.

And of course, the poster child for dysfunctional gaming regulation is California. While Nevada and many other progressive gaming regulatory states have two separate regulatory boards, they work in conjunction with each other and report to the same state official, a necessary function of bifurcation where the licensing and regulatory arms are separate. California, however, has two completely separate regulatory bodies which rarely talk to each other, and report to two elected public officials. The setup makes for wildly inconsistent enforcement, a complete lack of transparency and serious ethical issues. Our writer Dave Palermo outlines some of the problems in California in his story about card rooms and tribes beginning on page 30.

Now this isn’t to say that the people who run the agencies in California aren’t hard-working or don’t have good intentions; most of them do. But the problem stems from far up the ladder when state officials appoint regulators who know nothing about gaming in some sort of political payback. It happens far too frequently in all gaming jurisdictions.

It’s true gaming is a somewhat narrow discipline—you can’t always get someone knowledgeable about gaming as a regulator. But you can find people in either related fields or those that have business and/or legal backgrounds who understand how systems work. That doesn’t always happen, and clearly is a problem in California.

But there is a quiet revolution going on in many regulatory agencies. Nevada’s “gold standard” is being copied and adjusted in many jurisdictions. In New Jersey, David Rebuck has transformed the traditionally intransigent Division of Gaming Enforcement into an enlightened agency that does what is right for the state and the industry.

The first chairman of the Massachusetts Gaming Commission, Stephen Crosby, has been doing things right from the very beginning—sometimes to the annoyance of politicians (which is a good thing!)—and the Bay State now has some of the most progressive regulations in the nation. Up north, the British Columbia regulatory scheme has paid benefits for the province and for the companies operating there.

The nascent casino industry in Bermuda has benefited from the experience and integrity of Richard Schuetz, combined with the “local knowledge” of Allen Dunch. Even in Louisiana, once a backwater of regulations, Ronnie Jones has created an effective machine overseeing the wide range of gaming in that state. And there are many other

citations of regulators doing the right thing for their jurisdiction and for the companies they regulate.

So, there are many examples of how to do regulations right—just not enough of them. Here at GGB, we’ll continue to highlight the success stories—and shine the spotlight on the problems. By working together, we can drag the Neanderthals kicking and screaming into the 21st century.

Roger Gros

Author: Roger Gros

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.