Audit Division

Audit Summary

Department of Business and Industry

Nevada Athletic Commission

Report LA96-6

Results in Brief

The Nevada Athletic Commission could improve its management controls over the identification and collection of fees due the State in connection with exhibitions or contests of unarmed combat. Current methods have resulted in the under collection of approximately $37,000 in license fees due on complimentary tickets and the over collection of $2,100 in permit fees. These errors occurred because management controls relating to identifying, collecting, and safeguarding permit and license fees are not adequately documented. The lack of documentation resulted in the inconsistent or incorrect application of laws and regulations.

Principal Findings

1. The Commission has prepared written policies and job descriptions detailing both the Commission's and employee's functions. However, these policies and job descriptions do not provide enough detail to provide reasonable assurance all revenues are identified and collected. (page 8)

2. The Commission did not collect approximately $37,000 in license fees on complimentary tickets issued during the year ended June 30, 1994. In 5 of the 7 events we tested, the promoter was allowed to exclude more than the 1% limit on complimentary tickets set by NAC 467.332. (page 8)
3. The Commission collected $2,100 in promoter fees not authorized by statute. These fees were collected in error from the sponsors of closed-circuit showings of boxing events. (page 9)

4. Changes in television technology associated with major boxing and wrestling events have resulted in the events generating very significant amounts of financial activity. Pay-per-view subscriptions are generating substantial revenues for promoters. According to the National Cable Television Association, professional boxing earns the largest amount of pay-per-view revenue--more than $129 million in 1993. Professional wrestling is second, earning more than $73 million in 1993. The Nevada Athletic Commission has regulatory responsibility for these events when they take place in Nevada. Since the current fee structure was set 15 years ago, it may not be the most appropriate fee structure in light of the new technology. (page 10)