Regulatory ReformRegulatory ReformDavid O. StewartDavid O. Stewart

Ropes & Gray, LLP Ropes & Gray, LLP

Global Gaming ExpoOctober 4, 2011

Current Climate Favors Current Climate Favors Regulatory ReformRegulatory Reform

Overhaul of New Jersey’s casino regulations (S.12)

Nevada reform legislation (closing state testing lab, etc.)– Governor and NGCB both pressing for further

reforms

Even the federal government is touting regulatory reform

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Our ProcessOur Process AGA Regulatory Reform Working Group was

established in spring 2011 Target Audience:  State policymakers

– Regulators, legislative leaders, governors, and senior executive staff

Strategy:  Generate a range of reform proposals– Some are relatively simple and less controversial  – Some seek more fundamental changes, as in New

Jersey

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ProcessProcess

Stage One:  Develop proposals through of the working group

Stage Two:  Prepare white paper, secure Board of Directors’ adoption, and disseminate it–  “IMPROVING GAMING REGULATION:  10 Recommendations

for Streamlining Processes While Maintaining Integrity”

Stage Three:  Public education, lobbying and direct advocacy at the state level to seek adoption of reforms

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Licensing-related Licensing-related RecommendationsRecommendations

Move to gaming licenses without fixed terms, as in N.J. and Nev., or at least five-year terms

Secure wider adoption of standardized IAGR form for “personal history” for licensing of key employees– Also, develop standardized application form for licensing

of business entities and reciprocity between jurisdictions Allow for the waiver of licensing for institutional

investors holding up to a 25 percent stake in a licensee, and automatic waiver up to 15 percent.

Require no more than registration of outside directors.

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Operations-related Operations-related RecommendationsRecommendations

Authorize five-year shelf approvals of debt and equity offerings

Eliminate unnecessary reports to regulators– Foreign Gaming Reports (Nev.)– Loan Reports (Nev., Miss.) – Ownership reports (Ill., Ind., La.)– Quarterly Contract Reports (Ill., Ind., Mich.)

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Operations-related Operations-related RecommendationsRecommendations

Update licensing practices– Request “employment-related” credit checks, not “credit-

related”– Accept electronic fingerprint records from any law

enforcement agency– Use video-conferencing for most licensing interviews of

distant applicants– Eliminate licensing of non-gaming-related employees

(hotel, food & beverage)– License applications should be presumed confidential.– Allow secure electronic filing of all regulatory

submissions Eliminate Prescribed Minimum Internal Control

Standards (MICS) (Ill., Mo.)7

Electronic Gaming MachinesElectronic Gaming Machines

Eliminate prior approval or pre-notification of electronic gaming machine shipments

Eliminate pre-approval of machine modifications relating solely to the esthetic features of games– Artwork– Sounds

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