GamblingCompliance: Massachusetts Considers Revoking Mandatory Licensing Of Directors

28TH APR 2017 | WRITTEN BY: CHRIS SIEROTY

The Massachusetts Gaming Commission (MGC) on Thursday approved proposed changes to the state’s regulations governing electronic games, while also discussing a proposal to revoke mandatory licensure of outside directors of casino companies.

The five-member commission requested gaming industry comment on the state’s requirement for licensing of outside directors, with most of the responses asking for a reciprocity policy or a more basic background check.

“Recruiting outside directors is a constant challenge for licensed gaming companies,” Geoff Freeman, president and CEO of the American Gaming Association (AGA), said in a letter to the commission.

Freeman noted that outside directors with experience in finance, marketing and technology can contribute to a gaming licensee’s management and growth.

“Yet many potential outside directors have never been licensed in the casino industry,” Freeman said. “An intrusive personal background check and suitability investigation for a part-time responsibility frequently deters talented business leaders.”

Freeman wrote that outside directors who have already gone through the rigorous background investigation and licensing process in one state may be forced to do it all over again in another jurisdiction.

He called on commissioners to consider two proposals to streamline the process:

* Recognition of Reciprocity: If an outside director is licensed in another U.S. regulated gaming jurisdiction, the Massachusetts Gaming Commission would permit that individual to “waive in” without further background investigation.

* Basic Background Registration: In the absence of an existing license in another state gaming jurisdiction, the outside director would disclose basic employment and identification information through a straightforward registration process.

Freeman added that by following established approaches in New Jersey, Pennsylvania and Michigan, Massachusetts would have the discretion to require licensure depending on the individual’s role in the casino company.

Robert DeSalvio, president of Wynn Boston Harbor, also submitted a letter of support for revoking mandatory licensure of outside directors in Massachusetts.

In a letter to the MGC, Nicholas Casiello, an attorney with Fox Rothschild, who represents MGM Resorts International in Massachusetts, said his client has problems attracting “highly qualified candidates” because of licensing requirements.

MGM Resorts operates in eight states, including Nevada and New Jersey. The company’s $950m casino in downtown Springfield, Massachusetts, is scheduled to open next year.

So far, Penn National Gaming’s Plainridge Park Casino is the only gaming facility open in Massachusetts. Wynn Resorts will open the $2.4bn Wynn Boston Harbor in 2019.

“Any reduction in licensing requirements of any jurisdiction in which MGM operates would be welcome and helpful in MGM’s continuing endeavours to attract qualified board members,” Casiello wrote.

Casiello urged the MGC to follow the approach taken by the Pennsylvania Gaming Control Board, “in which only directors of publically traded companies holding certain positions have to be licensed.”

According to Pennsylvania’s gaming statute, all directors in a “privately held company must qualify.”

Meanwhile, “for publicly traded companies, only those outside directors who serve on the audit committee or are the chairman of the board (must qualify). However, the gaming board, in its discretion, may determine that any director must qualify.”

Both Massachusetts gaming commissioner Enrique Zuniga and chairman Stephen Crosby expressed their support for Pennsylvania’s approach to licensing outside directors.

Zuniga said the the Pennsylvania approach was an “easy tool for us to implement.”

Crosby agreed, saying he would “definitely like to pursue this,” but wants to “think about it a little more.”

The gaming commission on Thursday also decided to begin the process of considering proposed changes to the state’s rules governing standards for gaming devices.

Todd Grossman, the MGC’s deputy counsel, said his department had received comment from Scientific Games on the proposed changes, and would also talk with Gaming Laboratories International (GLI).

Among the changes to the standards are demands the licensee develop and submit for approval a “preventative maintenance program for the care and upkeep” of any physical part of any slot machine on the gaming floor.

The proposed rules would also deny the use of credit cards, debit cards or government issued electronic benefits transfer cards to play slot machines or purchase “any form or gaming value.”

Skill-based games, meanwhile, would be accommodated if they comply with the most recent update to GLI’s independent technical standards.

Grossman told commissioners that there may be other changes, but he suggested setting up a public hearing on the proposed changes and new regulations. As of Friday, no public hearing had been scheduled.

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