SUMMARY--Makes various changes to provisions governing regulation of gaming. (BDR 41-485)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to gaming; making various changes to the provisions governing the regulation of gaming; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Chapter 463 of NRS is hereby amended by adding thereto the provisions set forth as sections 2, 3 and 4 of this act.
Sec. 2. "Banking game" means any gambling game in which players compete against the licensed gaming establishment rather than against one another.
Sec. 3. "Representative of value" means any chip, token, wagering credit or instrumentality approved by the board that must be redeemable for an amount of cash, cash equivalents, goods or services that is at least equal to its value for wagering purposes.
Sec. 4. "Specific wager" means any activity that requires two or more persons, one of whom must be a licensed gaming establishment, to stake legal tender of the United States or a representative of value on an event for which the outcome is uncertain where each person has a chance of gain and a risk of loss.
Sec. 5. NRS 463.013 is hereby amended to read as follows:
463.013 As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 463.0133 to 463.0197, inclusive, and sections 2, 3 and 4 of this act, have the meanings ascribed to them in those sections.
Sec. 6. NRS 463.0136 is hereby amended to read as follows:
463.0136 "Associated equipment" means [any] :
1. Any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming, any game, race book or sports pool that would not otherwise be classified as a gaming device, including dice, playing cards, links which connect to progressive slot machines, equipment which affects the proper reporting of gross revenue, computerized systems of betting at a race book or sports pool, computerized systems for monitoring slot machines and devices for weighing or counting money [.] ; or
2. A computerized system for recordation of sales for use in an area subject to the casino entertainment tax pursuant to NRS 463.401.
Sec. 7. NRS 463.014 is hereby amended to read as follows:
463.014 "Cashless wagering system" means a method of wagering and accounting [in] :
1. In which the validity and value of a wagering instrument or wagering credits are determined, monitored and retained by a computer operated and maintained by a licensee which maintains a record of each transaction involving the wagering instrument or wagering credits, exclusive of the game or gaming device on which wagers are being made. The term includes computerized systems which facilitate electronic transfers of money directly to or from a game or gaming device [.] ; or
2. Used in a race book and sports pool in which the validity and value of a wagering instrument are determined, monitored and retained by a computer operator and maintained by a licensee who maintains a record of each transaction involving the wagering instrument.
Sec. 8. NRS 463.0157 is hereby amended to read as follows:
463.0157 1. "Gaming employee" means any person connected directly with an operator of a slot route, the operator of a pari-mutuel system, the operator of an inter-casino linked system or a manufacturer, distributor or disseminator, or with the operation of a gaming establishment licensed to conduct any game, 16 or more slot machines, a race book, sports pool or pari-mutuel wagering, including:
(a) Accounting or internal auditing personnel who are directly involved in any recordkeeping or the examination of records associated with revenue from gaming;
(b) Boxmen;
(c) Cashiers;
(d) Change personnel;
(e) Counting room personnel;
(f) Dealers;
(g) Employees of a person required by NRS 464.010 to be licensed to operate an off-track pari-mutuel system;
(h) Employees of a person required by NRS 463.430 to be licensed to disseminate information concerning racing;
(i) Employees of manufacturers or distributors of gaming equipment within this state whose duties are directly involved with the manufacture, repair or distribution of gaming [equipment;] devices or cashless wagering systems;
(j) Employees of operators of slot routes who have keys for slot machines or who accept and transport revenue from the slot drop;
(k) Employees of operators of inter-casino linked systems [;] whose duties include the operational or supervisory control of the systems or the games that are part of the systems;
(l) Floormen;
(m) Hosts or other persons empowered to extend credit or complimentary services;
(n) Keno runners;
(o) Keno writers;
(p) Machine mechanics;
(q) Odds makers and line setters;
(r) Security personnel;
(s) Shift or pit bosses;
(t) Shills;
(u) Supervisors or managers; and
(v) Ticket writers.
2. "Gaming employee" does not include bartenders, cocktail waitresses or other persons engaged exclusively in preparing or serving food or beverages.
Sec. 9. NRS 463.0161 is hereby amended to read as follows:
463.01611. "Gross revenue" means the total of all:
(a) Cash received as winnings;
(b) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(c) Compensation received for conducting any game in which the licensee is not party to a wager,
less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses by NRS 463.3715. For the purposes of this section, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses, except that losses in a contest or tournament conducted in conjunction with an inter-casino linked system may be deducted to the extent of the compensation received for the right to participate in that contest or tournament.
2. The term does not include:
(a) Counterfeit facsimiles of money, chips, tokens, wagering instruments or wagering credits;
(b) Coins of other countries which are received in gaming devices;
(c) Any portion of the face value of any chip, token or other representative of value won by a licensee from a patron for which the licensee can demonstrate that it or its affiliate has not received cash;
(d) Cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed;
(e) Cash received as entry fees for contests or tournaments in which patrons compete for prizes, except for a contest or tournament conducted in conjunction with an inter-casino linked system; [or]
(f) Uncollected baccarat commissions [.] ; or
(g) Cash provided by the licensee to a patron for which the licensee can demonstrate that it or its affiliate has not been reimbursed.
3. As used in this section, "baccarat commission" means:
(a) A fee assessed by a licensee on cash paid out as a loss to a patron at baccarat to modify the odds of the game; or
(b) A rate or fee charged by a licensee for the right to participate in a baccarat game.
Sec. 10. NRS 463.0177 is hereby amended to read as follows:
463.0177 "Nonrestricted license" or "nonrestricted operation" means [a] :
1. A state gaming license for, or an operation consisting of, 16 or more slot machines [or a] ;
2. A license for , or operation of , any number of slot machines together with any other game, gaming device, race book or sports pool at one establishment [.] ;
3. A license for, or the operation of, a slot machine route; or
4. A license for, or the operation of, an inter-casino linked system.
Sec. 11. NRS 463.0193 is hereby amended to read as follows:
463.0193 "Sports pool" means the business of accepting wagers on sporting events by any system or method of wagering . [other than the system known as the pari-mutuel method of wagering.]
Sec. 12. NRS 463.159 is hereby amended to read as follows:
463.159 1. The commission shall by regulation require audits of the financial statements of all nonrestricted licensees whose annual gross revenue is $5,000,000 or more.
2. The commission may require audits, compiled statements or reviews of the financial statements of nonrestricted licensees whose annual gross revenue is less than $5,000,000.
3. The amounts of annual gross revenue provided for in subsections 1 and 2 must be increased or decreased annually in an amount corresponding to the percentage of increase or decrease in the Consumer Price Index (All Items) published by the United States Department of Labor for the preceding year. On or before December 15 of each year, the commission shall determine the amount of the increase or decrease required by this subsection and establish [by regulation] the adjusted amounts of annual gross revenue in effect for the succeeding calendar year. The audits, compilations and reviews provided for in subsections 1 and 2 must be made by independent accountants holding permits to practice public accounting in the State of Nevada.
4. Except as otherwise provided in subsection 5, for every audit required pursuant to this section:
(a) The independent accountants shall submit an audit report which must express an unqualified or qualified opinion or, if appropriate, disclaim an opinion on the statements taken as a whole in accordance with standards for the accounting profession established by rules and regulations of the Nevada state board of accountancy, but the preparation of statements without audit does not constitute compliance.
(b) The examination and audit must disclose whether the accounts, records and control procedures maintained by the licensee are as required by the regulations published by the commission pursuant to NRS 463.156 to 463.1592, inclusive.
5. If the license of a nonrestricted licensee is terminated within 3 months after the end of a period covered by an audit, the licensee may submit compiled statements in lieu of an additional audited statement for the licensee's final period of business.
Sec. 13. NRS 463.170 is hereby amended to read as follows:
463.1701. Any person who the commission determines is qualified to receive a license [or] , to be found suitable or to receive any approval required under the provisions of this chapter, or to be found suitable regarding the operation of a charitable lottery under the provisions of chapter 462 of NRS, having due consideration for the proper protection of the health, safety, morals, good order and general welfare of the inhabitants of the State of Nevada and the declared policy of this state, may be issued a state gaming license [or] , be found suitable [,] or receive any approval required by this chapter, as appropriate. The burden of proving his qualification to receive any license , [or] be found suitable or receive any approval required by this chapter is on the applicant.
2. An application to receive a license or be found suitable must not be granted unless the commission is satisfied that the applicant is:
(a) A person of good character, honesty and integrity;
(b) A person whose prior activities, criminal record, if any, reputation, habits and associations do not pose a threat to the public interest of this state or to the effective regulation and control of gaming or charitable lotteries, or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of gaming or charitable lotteries or in the carrying on of the business and financial arrangements incidental thereto; and
(c) In all other respects qualified to be licensed or found suitable consistently with the declared policy of the state.
3. A license to operate a gaming establishment must not be granted unless the applicant has satisfied the commission that:
(a) He has adequate business probity, competence and experience, in gaming or generally; and
(b) The proposed financing of the entire operation is:
(1) Adequate for the nature of the proposed operation; and
(2) From a suitable source.
Any lender or other source of money or credit which the commission finds does not meet the standards set forth in subsection 2 may be deemed unsuitable.
4. An application to receive a license or be found suitable constitutes a request for a determination of the applicant's general character, integrity, and ability to participate or engage in, or be associated with gaming or the operation of a charitable lottery, as appropriate. Any written or oral statement made in the course of an official proceeding of the board or commission by any member thereof or any witness testifying under oath which is relevant to the purpose of the proceeding is absolutely privileged and does not impose liability for defamation or constitute a ground for recovery in any civil action.
5. The commission may in its discretion grant a license to:
(a) A publicly traded corporation which has complied with the provisions of NRS 463.625 to 463.643, inclusive;
(b) Any other corporation which has complied with the provisions of NRS 463.490 to 463.530, inclusive;
(c) A limited partnership which has complied with the provisions of NRS 463.564 to 463.571, inclusive; and
(d) A limited-liability company which has complied with the provisions of NRS 463.5731 to 463.5737, inclusive.
6. No limited partnership, except one whose sole limited partner is a publicly traded corporation which has registered with the commission, or a limited-liability company, or business trust or organization or other association of a quasi-corporate character is eligible to receive or hold any license under this chapter unless all persons having any direct or indirect interest therein of any nature whatever, whether financial, administrative, policymaking or supervisory, are individually qualified to be licensed under the provisions of this chapter.
7. The commission may, by regulation:
(a) Limit the number of persons who may be financially interested and the nature of their interest in any corporation, other than a publicly traded corporation, limited partnership, limited-liability company or other organization or association licensed under this chapter; and
(b) Establish such other qualifications for licenses as it may, in its discretion, deem to be in the public interest and consistent with the declared policy of the state.
Sec. 14. NRS 463.3857 is hereby amended to read as follows:
463.3857 1. Except as otherwise provided in NRS 463.386, the commission shall charge and collect from each licensee who concludes a gaming operation [, a] :
(a) A fee, to be included on the final tax return at the close of operations and derived from application of the rates and monetary limits set forth in NRS 463.370, based on the total outstanding value of collectible credit instruments received as a result of that gaming operation which are held by the licensee and remain unpaid on the last tax day; or
(b) A monthly fee on all cash or other compensation received by the licensee or any affiliate of the licensee in payment of any credit instrument received as a result of that gaming operation which is held by the licensee or any affiliate of the licensee and remains unpaid on the last tax day.
2. The monthly fee must be:
(a) Calculated by applying to the amount of cash or other compensation received in payment of a credit instrument during the month a rate derived from the application of the rates and monetary limits set forth in NRS 463.370 to the licensee's experience in receiving payment of credit instruments before concluding gaming operations; and
(b) Collected and refunded pursuant to the regulations adopted by the commission.
3. To secure payment of the monthly fee, the licensee must make a cash deposit or post and maintain a surety bond or other acceptable form of security with the commission in an amount determined by applying the rate derived pursuant to paragraph (a) of subsection 2 to the value of all collectible credit instruments.
4. As used in this section:
(a) "Last tax day" means the last day for which a licensee is legally obligated to pay the fees imposed pursuant to NRS 463.370.
(b) "Value of all collectible credit instruments" means the amount of cash or other compensation the licensee may reasonably expect to receive in payment of unpaid credit instruments after conclusion of his gaming operation, taking into account all relevant factors.
Sec. 15. NRS 463.388 is hereby amended to read as follows:
463.388 1. If any person fails to make a report of the state license fees or taxes as required by this chapter, or if the board is not satisfied with the report of the state license fees or taxes required to be paid to the state pursuant to this chapter by any person, the board may compute and determine the amount required to be paid upon the basis of:
(a) The facts contained in the report, if any;
(b) An audit conducted by the board;
(c) An estimate of the amount of taxes or fees due pursuant to the provisions of this chapter;
(d) Any information within its possession or that may come into its possession; or
(e) Any combination of the methods described in paragraphs (a) to (d), inclusive.
2. Any interest on the tax unpaid by reason of a credit instrument that is the subject of a determination by the board pursuant to NRS 463.371 accrues from the first day of the second month following the month in which the credit instrument was accepted by the licensee.
3. In making such a determination, the board may offset overpayments and interest due thereon against underpayments and interest or penalties due thereon for the period of the audit.
[3.] 4. If overpayments and interest thereon exceed underpayments, penalties and interest thereon, the excess must be refunded to the licensee except where otherwise expressly provided.
Sec. 16. NRS 463.567 is hereby amended to read as follows:
463.567 1. The purported sale, assignment, transfer, pledge , granting of an option to purchase, or other disposition of any interest in a limited partnership which holds a state gaming license is ineffective unless approved in advance by the commission.
2. If at any time the commission finds that an individual owner of any such interest is unsuitable to hold that interest, the commission shall immediately notify the limited partnership of that fact. The limited partnership shall, within 10 days from the date that it receives the notice from the commission, return to the unsuitable owner, in cash, the amount of his capital account as reflected on the books of the partnership.
3. Beginning on the date when the commission serves notice of a determination of unsuitability pursuant to subsection 2 upon the limited partnership, it is unlawful for the unsuitable owner:
(a) To receive any share of the profits or interest upon any limited partnership interest;
(b) To exercise, directly or through any trustee or nominee, any voting right conferred by such interest; or
(c) To receive any remuneration in any form from the limited partnership, for services rendered or otherwise.
4. The certificate of limited partnership of any limited partnership holding a state gaming license must contain a statement of the restrictions imposed by this section.
Sec. 17. NRS 463.569 is hereby amended to read as follows:
463.569 Every general partner and limited partner of a limited partnership which holds [or applies for] a state gaming license must be licensed individually, according to the provisions of this chapter, and if, in the judgment of the commission, the public interest will be served by requiring any or all of the limited partnership's lenders, holders of evidence of indebtedness, underwriters, key executives, agents or employees to be licensed, the limited partnership shall require those persons to apply for a license in accordance with the laws and requirements in effect at the time the commission requires the licensing. Publicly traded corporations which are limited partners of limited partnerships are not required to be licensed, but shall comply with NRS 463.635 to 463.645, inclusive. A person who is required to be licensed by this section as a general or limited partner shall not receive that position until he secures the required approval of the commission. A person who is required to be licensed pursuant to a decision of the commission shall apply for a license within 30 days after the commission requests him to do so.
Sec. 18. NRS 463.5733 is hereby amended to read as follows:
463.5733 1. The purported sale, assignment, transfer, pledge , granting of an option to purchase or other disposition of any interest in a limited-liability company which holds a license is ineffective unless approved in advance by the commission.
2. If at any time the commission finds that a member is unsuitable to hold an interest in a limited-liability company, the commission shall immediately notify the limited-liability company of that fact. The limited-liability company shall, within 10 days after it receives the notice from the commission, return to the member, in cash, the amount of his capital account as reflected on the books of the company.
3. Except as otherwise provided in subsection 2, beginning on the date when the commission serves notice of a determination of unsuitability pursuant to subsection 2 upon the limited-liability company, it is unlawful for the unsuitable member:
(a) To receive any share of the distribution of profits of the limited-liability company or any payments upon dissolution of the company;
(b) To exercise any voting right conferred by the member's interest in the limited-liability company;
(c) To participate in the management of the limited-liability company; or
(d) To receive any remuneration in any form from the limited-liability company, for services rendered or otherwise.
4. The articles of organization of any limited-liability company holding a license must contain a statement of the restrictions imposed by this section.
Sec. 19. NRS 463.5735 is hereby amended to read as follows:
463.5735 1. Every member, transferee of a member's interest in a limited-liability company and manager of a limited-liability company which holds [or applies for] a license must be licensed individually, according to the provisions of this chapter.
2. If, in the judgment of the commission, the public interest will be served by requiring any of the limited-liability company's lenders, holders of evidence of indebtedness, underwriters, key executives, agents or employees to be licensed:
(a) The limited-liability company shall require those persons to apply for a license in accordance with the laws and requirements in effect at the time the commission requires the licensing; and
(b) Those persons shall apply for a license within 30 days after being requested to do so by the commission.
3. A publicly traded corporation which is a member of a limited-liability company is not required to be licensed, but shall comply with NRS 463.635 to 463.645, inclusive.
4. No person may become a member, a transferee of a member's interest in a limited-liability company or a manager of a limited-liability company which holds [or has applied for] a license until he secures the required approval of the commission.
Sec. 20. NRS 463.635 is hereby amended to read as follows:
463.635 1. If a corporation, partnership, limited partnership, limited-liability company or other business organization applying for or holding a state gaming license is or becomes owned in whole or in part or controlled by a publicly traded corporation, or if a publicly traded corporation applies for or holds a state gaming license, the publicly traded corporation shall:
(a) Maintain a ledger in the principal office of its subsidiary which is licensed to conduct gaming in this state, which must:
(1) Reflect the ownership of record of each outstanding share of any class of equity security issued by the publicly traded corporation. The ledger may initially consist of a copy of its latest list of equity security holders and thereafter be maintained by adding a copy of such material as it regularly receives from the transfer agent for its equity securities of any class which are outstanding.
(2) Be available for inspection by the board and the commission and their authorized agents at all reasonable times without notice.
(b) Register with the commission and provide the following information to the board:
(1) The organization, financial structure and nature of the business of the publicly traded corporation, including the names of all officers, directors and any employees actively and directly engaged in the administration or supervision of the activities of the gaming licensee, and the names, addresses and number of shares held of record by holders of its equity securities.
(2) The rights and privileges accorded the holders of different classes of its authorized equity securities.
(3) The terms on which its equity securities are to be, and during the preceding 3 years have been, offered by the corporation to the public or otherwise initially issued by it.
(4) The terms and conditions of all its outstanding loans, mortgages, trust deeds, pledges or any other indebtedness or security device, directly relating to the gaming activities of the gaming licensee.
(5) The extent of the equity security holdings of record in the publicly traded corporation of all officers, directors, underwriters and persons owning of record equity securities of any class of the publicly traded corporation, and any payment received by any such person from the publicly traded corporation for each of its 3 preceding fiscal years for any reason whatsoever.
(6) Remuneration exceeding $40,000 per annum to persons other than directors and officers who are actively and directly engaged in the administration or supervision of the gaming activities of the gaming licensee.
(7) Bonus and profit-sharing arrangements of the publicly traded corporation directly or indirectly relating to the gaming activities of the gaming licensee.
(8) Management and service contracts of the publicly traded corporation directly or indirectly relating to the gaming activities of the gaming licensee.
(9) Options existing or from time to time created in respect of its equity securities.
(10) Balance sheets, certified by independent public accountants, for at least the 3 preceding fiscal years, or if the publicly traded corporation has not been incorporated for a period of 3 years, balance sheets from the time of its incorporation. These balance sheets may be those filed by it with or furnished by it to the Securities and Exchange Commission.
(11) Profit and loss statements, certified by independent certified public accountants, for at least the 3 preceding fiscal years, or, if the publicly traded corporation has not been incorporated for a period of 3 years, profit and loss statements from the time of its incorporation. These profit and loss statements may be those filed by it with or furnished by it to the Securities and Exchange Commission.
(12) Any further information within the knowledge or control of the publicly traded corporation which either the board or the commission may deem necessary or appropriate for the protection of this state, or licensed gambling, or both. The board or the commission may [in its discretion] make such investigation of the publicly traded corporation or any of its officers, directors, security holders or other persons associated therewith as it deems necessary.
(c) Apply for an order of registration from the commission which must set forth a description of the publicly traded corporation's affiliated companies and intermediary companies, and the various gaming licenses and approvals obtained by those entities. The commission may issue an order of registration upon receipt of a proper application. If the information set forth in an order of registration changes, the publicly traded corporation shall apply for and the commission may issue amendments to and revisions of the order of registration to reflect the changes.
(d) If the publicly traded corporation is a foreign corporation, qualify to do business in this state.
2. If the board determines that a publicly traded corporation registered with the commission or any of its affiliates or intermediary companies, have ceased engaging in gaming activities in Nevada, the board may, upon its own motion, recommend that the commission deregister the publicly traded corporation. Before making such a recommendation for deregistration, the board shall provide at least 30 days' notice to the publicly traded corporation that it intends to move for deregistration. If the board is unable to confirm that notice has been received by the publicly traded corporation, the board shall provide notice to the last known address of the registered agent of the publicly traded corporation. If the commission issues an order deregistering the publicly traded corporation, a copy of the order must be provided to the publicly traded corporation together with a notice that the publicly traded corporation must apply, within 1 year after the date of the order of deregistration, to the commission for a refund of any money of the publicly traded corporation held by the board. If the commission is unable to confirm that the publicly traded corporation has received the order, the commission shall provide the order to the last known address of the registered agent of the publicly traded corporation. The publicly traded corporation must apply to the board for a refund of any investigative or other money of the publicly traded corporation held by the board within 1 year after the date of deregistration. Any money of the publicly traded corporation for which a refund is not requested within 1 year after the date of deregistration escheats to the state.
3. The commission may adopt regulations that generally or selectively impose on any publicly traded corporation any requirement not inconsistent with law which it may deem necessary in the public interest. Without limiting the generality of the preceding sentence, any such requirement may deal with the same subject matter as, but be more stringent than, the requirements imposed by NRS 463.482 to 463.645, inclusive.
Sec. 21. NRS 120A.220 is hereby amended to read as follows:
120A.220 1. All intangible personal property held for the owner by any court, public corporation, public authority or public officer, an appointee thereof, a federal or state governmental entity or a political subdivision thereof, that has remained unclaimed by the owner for more than 5 years after it became payable or distributable is presumed abandoned and subject to the provisions of this chapter if:
[1.] (a) The last known address or residence of the owner of the property is in this state; or
[2.] (b) The property is otherwise abandoned in this state.
2. This section does not apply to [refunds] :
(a) Refunds held by the public service commission of Nevada pursuant to NRS 703.375 [.] ; or
(b) Money held by the state gaming control board pursuant to subsection 2 of NRS 463.635.