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Best of I. Nelson Rose

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Defining Slots-For-Tots

25 August 2000

The new Millennium has begun with a new controversy for legal gaming: whether some slot machines might be unduly attractive to children.

The issue became news in October, 1999, when the Nevada Gaming Commission ("NGC") made public its growing unhappiness over gaming devices with cartoon themes. In December, the NGC circulated proposed regulations. On January 27, 2000 the NGC met and adopted amendments to NGC Regulation 14, prohibiting slot machines with themes derived from products marketed to children.

The mass media loves stories like this. Headlines of "Children At Risk!" always sell papers, especially tabloids. Television news shows want action and color: one slot machine is worth a thousand talking heads. Even radio could get in on this story, throwing out familiar names, like Betty Boop® and South Park®.

Gambling is a sexy issue, so long as it does not get too complicated. It also gives rise to strong emotional reactions, especially from its opponents, the "anti's."

The enormous success of Wheel of Fortune® led manufacturers to look for other well-know brand names. The issue over age-appropriate gaming devices was inevitable, since so many of our best-loved trademarks come from our childhood: Monopoly®, The Three Stooges®, Elvis Presley®. The whole point of branded slots is to tap in to our warm, fuzzy feelings of nostalgia. Such selling-by-association is certainly nothing new: movies like Star Wars® may make more money from toys and other products than from the movie itself. But it is relatively new to legal gambling.

Regulators face a myriad of problems when an issue like kiddie-theme slots is raised in the press. It would be natural to think the first question to be resolved is whether the problem really exists. This is not as easy as it seems. Exactly how does one discover whether children are being unduly enticed into gambling by machines with themes?

What is the standard? Would it be enough to show that merely one child in the country put money into a particular slot machine? How do we prove that the child would not have made the bet, but for the lure of the brand name?

It is very difficult to show that something is true beyond any doubt, like the claim that certain games create underage gambling. But it is nearly impossible to prove the opposite, that something is not true. What evidence would you use to show a slot machine is not unduly attractive to children?

Since we are forced to deal with probabilities, should regulators be concerned if there is only a slim possibility the claim is true? For a politically explosive issue like this, regulators will, often unconsciously, follow the path with the least downside risk to themselves.

If regulators ban certain slots that should not have been banned, the loss to casinos, manufacturers and players is small and difficult to measure. But, if they allow a device they should have outlawed, there is the possibility of scandal -- such as pictures of kids playing slots on national T.V. -- that will raise questions about the regulators' own competence.

Although there may be a bias in favor of imposing new standards in the name of protecting children, there is also a bias against making any new rule. The first question a good regulator, or lawyer representing an interested party, will ask is whether these regulators have the power to issue regulations such as these.

Major constitutional challenges make news. But the day-to-day world of making regulations involves questions of procedure and delegation.

What procedures should the regulators use to guarantee due process -- that all interested parties have a fair and equal opportunity to have their say -- not just now, but when new machines are invented in the future? The easiest format is to allow presentations of evidence and arguments at hearings open to the public.

The delegation doctrine is also fundamental to our democratic system. Regulators are appointed, not elected. The only power they have is the specific, limited power given them by the legislature or governor.

The NGC found a law passed by the Nevada Legislature to justify its action. Section 463.350 of the Nevada Gaming Control Act makes it a crime for a licensed operator to allow anyone under 21 to gamble. The NGC declared its new rules "will further the enforcement of 463.350 by establishing standards for gaming device themes."

Is it necessary to have a prohibition on these games at all? Regulators of riverboat casinos, which can easily prevent any child from boarding, will probably find it unnecessary to issue new rules about gaming themes. In other cases, self-regulation will work. You are not going to see any Pokemon slot machines.

How does a regulator define what games are prohibited? A rule that simply lists cartoon characters and other kiddie attractions obviously will not work. There are too many and they are constantly changing.

The NGC had to take three pages to describe what themes it was making illegal. The regulators used a mix of general statements and specific examples. Banned are themes "based on a product that is currently and primarily intended or marketed for use by persons under 21." These include TV programs, cartoons, books, board games, movies and video games less than 21 years old with "G" and similar ratings.

Exceptions are allowed where "the theme is attractive to adults because of its nostalgic appeal." The regulators also gave themselves the power to "restrict the time, place and manner in which an approved gaming device may be displayed." And they grandfathered-in "any themes that were used in connection with gaming devices" already approved.

Being a regulator may seem like child's play, but usually it is hard work.

Recent Articles
Best of I. Nelson Rose
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Gambling and the Law

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

> More Books By I. Nelson Rose