What Makes a Manufacturer?
September 2009

On May 18, 2009, Senate Bill No. 83 (“S.B. 83”), introduced on behalf of the State Gaming Control Board (the “Board”), was signed into law by Nevada Governor Jim Gibbons. S.B. 83 enacts various changes to the Nevada Revised Statutes (“NRS”), in particular, changing several of Nevada’s gaming laws that are expected to have a significant impact upon the manufacturing industry. The most important points of S.B. 83 are that it defines the term manufacture, amends the definition of the term gaming device, introduces and defines the term independent contractor and garners greater oversight of game intellectual property for the Board and the Nevada Gaming Commission (the “Commission”). These changes identify which activities will qualify persons and entities as manufacturers, which objects and components constitute gaming devices and which persons are subject to regulatory oversight for conducting activities related to control programs and game intellectual property. Simply, these particular changes serve to clarify and modernize the law with regard to the licensing of participants in the manufacturing industry.

Prior to S.B. 83, the NRS stated that persons and entities who design or assemble gaming devices as well as those who hold or maintain the copyright over such devices must be found suitable by the Commission. While the law appeared to be transparent with regard to who qualifies as a manufacturer and what constitutes a gaming device, the law, in application, was not so lucid. One reason for this is that unlicensed companies continually test the boundaries of the law with regard to what actions they can perform before having to obtain a license. For instance, the influx of other customarily, non-gaming companies from the technology sector and their accompanying innovations spurred a new wave of piecemeal manufacturing in the gaming industry. By parsing the manufacturing of gaming devices into many discrete processes, the regulatory line became blurred. In other words, the NRS no longer maintained a clear delineation between when a manufacturing license is required and when one is not.

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