In a Thursday meeting last week, the Nevada Gaming Commission (NGC) took a small but important step toward modernizing the state’s gambling industry.
By unanimous vote, commissioners modified casino regulations to permit cashless wagering.
In some respects, the Silver State’s long history with gambling has been an impediment to progress in recent years. While states that legalized or expanded gaming more recently could craft their laws and regulations to account for new technology, Nevada’s system had become outdated.
The most important regulatory update is the removal of a section prohibiting the NGC’s Chair from approving systems for electronic funds transfers “until such time as the appropriate regulations for such transfers are adopted.”
The old language is replaced by a new section stating that such technology is allowed with the Chair’s approval:
A licensee shall not allow a patron to use a debit instrument for purposes of making electronic transfers of money from a financial institution directly or indirectly to a game or gaming device unless the transfer uses a cashless wagering system approved by the Chair for such transfer. This subsection only applies to electronic transfers of money at a game or gaming device.
The timing is probably not a coincidence.
The COVID-19 outbreak has highlighted the fact that traditional exchanges of physical cash and casino chips pose a significant public health risk. Cash has already fallen out of favor in most other areas of the economy, and most would agree that it’s time for the casino industry to catch up.
Like the laws themselves, opposition to cashless wagering is more historical than current. Virtually all parties with a stake in the matter are in favor of the change.
The American Gaming Association has made its opinion quite clear. Just last week, it released a list of eight policy principles for modernizing casino payments. That in itself may have provided some of the impetus for the NGC to take action at this moment.
AGA president Bill Miller praised the decision and the NGC’s flexibility on the matter, referring to one of those eight principles.
I applaud today’s decision by the NV Gaming Commission to introduce added regulatory flexibility for digital payment options on casino floors. This important step supports innovation while bolstering existing responsible gaming, financial tracking, and public health measures.
— Bill Miller (@BillMillerAGA) June 25, 2020
Aside from the convenience factor, the change should increase security in the gambling industry.
In the early days of digital commerce, cashless transactions were seen as a greater security risk than their cash counterparts. Now, the situation is quite the opposite. Digital record-keeping could make fraud and money-laundering investigations much easier for law enforcement.
The only significant voice of dissent came from UAW Gaming Union, which represents Las Vegas dealers, cashiers, and other casino employees. Its primary concerns are the potential for job losses and reduced tip income due as a result of a reduction in cash transactions. The union also warned that cashless wagering could bring with it increased criminality and problem gambling.
How significant these risks actually are largely depends on the specific types of transactions the NGC authorizes.
The most obvious benefits of cashless wagering relate to conventional gambling on the casino floor.
Casino operators will naturally be happy that players can top up to extend a session at the tables or slot machines without needing to stand up. Players will benefit from the same convenience and presumably shorter lines when they do need to visit the ATM or the cage.
Depending on what exact policies the NGC eventually settles on, there could be even larger benefits for other types of gaming.
Poker players, for instance, are likely to appreciate more modern systems. Tournament registration and refreshing one’s stack in a cash game should both become easier, for starters. High-stakes players will also be at a lower risk of attracting unwanted attention if they no longer need to keep large sums of cash in their hotel rooms or on their person.
Perhaps the biggest potential impact, however, is on the mobile sports betting industry. Despite being the only state with legal sports betting prior to the repeal of PASPA, Nevada mobile wagering has some of the least convenient rules. Regulations require both in-person registration and in-person deposits in most cases, largely the result of the language the NGC just changed.
It remains to be seen if this paves the way for fully mobile sports wagering, but it’s now looking like a realistic possibility.