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Big Gaming in Nevada can make life difficult for the little guy

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J. Patrick Coolican

The spread of sports betting kiosks at bars certainly seems like a great innovation: Your beer, your sweat-inducing chicken wings and your action on your team. And all without the annoyance of being in a casino.

The Gaming Control Board recently approved the latest machines, which allow you to set up your account, put money into it, make your bets and get a voucher to collect your winnings all right at the bar. The Nevada Gaming Commission also approved a profit-sharing agreement between Leroy’s Sportsbook and Golden Gaming, so you’ll see the kiosks all over town soon enough.

But I have a funny feeling the kiosks won’t survive. Here’s why:

Big Gaming surely sees this as a threat on the horizon, and I can imagine narrowed eyes among gaming executives as they consider how to force sports bettors back into the big casinos.

Ostensibly, this is about allowing sports betting at bars with restricted gaming licenses or continuing to force players to cash in their winning tickets at bigger properties with unrestricted licenses. But I think we all know what this is really about: competition, especially for local customers.

“It’s the same old story of established business trying to regulate away their competition,” says Geoffrey Lawrence, of the libertarian Nevada Policy Research Institute.

If this sounds vaguely familiar, it should: This year, the resort association successfully lobbied the county and then the Nevada Gaming Commission to effectively shut down the business model of Dotty’s, the little slot parlors that dot the valley like pubs in Dublin.

Peter Bernhard, the chairman of the commission and the only dissenting vote on the Dotty’s issue, believes the gaming kiosks are materially different from the Dotty’s situation because its business model was approved more than a decade ago. The confusion with the kiosks, Bernhard says, has to do with whether they are mere communication devices or if they’re actual games — thus subject to strict limits.

Virginia Valentine, head of the powerful Nevada Resort Association, says this move to sports betting in bars would put us on a different path from the long tradition of “Las Vegas-style gambling” — large resorts that inject capital and jobs into the community. Instead, it would move us toward a model more like London, where slots and sports betting are on every corner.

The commission approved the Leroy’s/Golden Gaming licensing agreement through the summer of 2013, which will allow the Legislature to settle this policy question if it so chooses.

How much do you want to bet that the resort association will be throwing its weight around at the next Legislature, out to kill the betting kiosks? And if that doesn’t work, it’ll plead before the Gaming Commission to destroy what will no doubt be cast as “unfair, job-killing competition.”

But it’s not just Big Gaming that doesn’t like pesky innovators. Think of the cab industry: Just a handful of companies, and no more than about 2,000 cabs on the road at any one time as declared by regulatory fiat. They’re sort of like OPEC.

These industries are always sure to set aside plenty of money for lobbying and political campaigns.

Of course, there are legitimate reasons some industries are heavily regulated. We want cabs to be safe, and we want the gaming industry to be on the up-and-up.

True, but as Lawrence says of Big Gaming’s use of its juice to squeeze out innovative competitors, it sure feels like “the horse and buggy industry saying the automobile unfairly changes the game. For most people, it’s a sign of progress. But of course some people stand to lose,” he says.

Unless the big guys can pressure legislators and regulators to stand with them.

We think of Nevada as a “pro-business state.” We have low taxes and relatively light regulation on issues like environmental cleanup and worker safety, especially compared to California. But when you consider the immense advantages we give to incumbent businesses — businesses that are already here — the more accurate way to think of our business climate is that we’re pro-business, if you already have one.

A version of this story first appeared in Las Vegas Weekly, a sister publication of the Sun.
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