November 28, 2022

Volume XII, Number 332

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New Nevada Licensing Scheme in the Works for Associated Equipment Manufacturers

Associated equipment manufacturers (“AEMs”) who do business in Nevada are soon going to be subject to a whole new level of gaming licensure requirements. Thanks to the recent passage of Nevada Senate Bill 38, the Nevada Gaming Control Board (the “Board”) has been granted expanded power to regulate and license AEMs.

Most gaming jurisdictions lump all gaming equipment manufacturers into a single “manufacturer” licensing category. Nevada is an exception; it classifies manufacturers into two groups: gaming device manufacturers and AEMs.

In Nevada, gaming devices, which include slot machines, are defined as those devices or objects used in connection with gaming that affect the result of a wager by determining win or loss. Associated gaming equipment is anything other than a gaming device that is tangential to the gaming operation. Examples include dice, cards, items that report revenue, and equipment used for counting money.

Under the current Nevada regulatory scheme, gaming device manufacturers are required to go through the full gaming licensure process with the Board and the Nevada Gaming Commission (the “Commission”). AEMs on the other hand, are not required to have a Nevada gaming license but are subject to generally much less rigorous discretionary licensing approvals.

Now, with SB38, the licensing for AEMs will move from discretionary to mandatory. This does not mean that every AEM will need to undergo the full licensing process like a gaming device manufacturer. What the Board envisions is a tiered system for AEM licensure and approvals, which will consist of different classes of regulatory approvals or licensure depending on where on the scale an AEM falls, from full gaming licensure to nothing at all.

This change is also intended to shift the burden for the cost of any licensing investigations from the Board to the AEM applicant. This is because in Nevada the gaming applicant is required to pay the cost of the licensing investigation in cases of mandatory licensure, but the Board must bear the cost of investigation when it calls forward an entity or person who is subject only to licensure on a discretionary basis. Therefore, those AEMs that will be required to undergo the mandatory full licensing process will also be required to pay the substantial costs of that licensing investigation. The rate currently charged by the Board’s investigative staff is $135 per hour, and the gaming laboratory agents, who are charged with deciding into which classification or tier an AEM will fall, are now billing their time at $155 per hour.

Finally, the employees of an AEM are now deemed to be “gaming employees” and subject to regulation as such.

What this will mean for AEMs will be dependent on the type of equipment they manufacture and where that type of equipment may fall within the tiered structure that the Board and Commission will be crafting. The Board will be hosting workshops where members of the AEM industry will have the opportunity to provide input. 

© Copyright 2022 Dickinson Wright PLLCNational Law Review, Volume V, Number 195
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About this Author

Jennifer J. Gaynor, Dickinson Wright, Carson City, Gaming Attorney
Member

Jennifer Gaynor represents clients before the Nevada Legislature in Carson City, Nevada. She also practices before various professional and licensing boards and state and local tax authorities, and represents clients on matters involving First Amendment law, public records and open meeting law, gaming law and regulatory agency actions.

Professional Involvement

  • Nevada State Chair, CARE

  • Board Member, Nevada Preservation Foundation

  • Member,...

702-550-4462
Kate C. Lowenhar-Fisher, Dickinson Wright, Las Vegas, Gaming Lawyer
Member

Ms. Lowenhar-Fisher is a leading Nevada gaming attorney who counsels many of the world’s premier gaming companies on regulatory issues in connection with mergers and acquisitions, corporate restructuring, reorganizations and financings.  She has extensive experience advising clients on issues related to Internet gaming, social gaming, fantasy sports, liquor licensing, sweepstakes, contests, and promotions. She regularly represents individuals and businesses before regulatory agencies, including the Nevada State Gaming Control Board, the Nevada Gaming Commission, the...

702-550-4459
Gregory R. Gemignani, Dickinson Wright, Intellectual Property Lawyer
Member

Greg Gemignani's practice focuses primarily on intellectual property law, gaming law, technology law, internet law, online gaming law, and online promotions law. He has represented many clients ranging from the largest casino companies to start-up internet ventures.

Professional Involvement

  • Member, International Masters of Gaming Law

  • Member, International Association of Gaming Advisors

  • Member, Technology Business Alliance of Nevada

    ...
702-550-4468
Jeffrey A. Silver, Dickinson Wright, Gaming regulatory Attorney, Nevada
Of Counsel

Mr. Silver's practice focuses on every aspect of gaming, liquor licensing and regulatory law, as well as planning and zoning matters, contractor licensing and transportation law.

Mr. Silver’s representative clients include Gaming Laboratories International, Dubai World, Mohegan Tribal Gaming Authority, Tuscany Hotel & Casino, Riverside Resort (Laughlin, NV), The Stephen Siegel Group, Grand Sierra Hotel & Casino (Reno, NV), Century Gaming Technologies, Applebee’s Restaurants, Bell Transportation, United Coin, Ryan's Express, and Casino...

702-382-1661
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