The heightened popularity of poker and blackjack, brought about by television and the Internet, has increased the popularity of table games in Nevada. Developers and casino licensees, in hopes of capitalizing on this trend, have increased their focus on designing and implementing new games. In 2007 alone, Nevada casinos introduced about 50 new games or variations on previously approved games, including variations on “ante up 21,” “black jack press” and “champion poker,” to name a few.1 A casino licensee cannot, however, offer a table game for play unless the Gaming Control Act defines it as a “game,” or a “gambling game,” or unless the Nevada Gaming Commission has approved it as a new game.2
The first step for approval begins with the filing of an application. Unlike the approval process for many aspects of gaming, developers of a new game need not be licensed by the commission. The absence of mandatory licensure, however, does not infer a more lax approval process. Developers of a new game are still required to submit the typical plethora of documents, and the game itself must undergo a field trial before the game is approved.3
Pursuant to Nevada Commission Regulation 14.230(2) each application must include the name, permanent address, social security number and driver’s license number of the person developing the new game; the name of the game, which must be different from the name of a game currently approved by the commission; a description of the new game, including the rules of play and specific examples; the proposed schedule of payouts; and a statistical evaluation of the theoretical percentages of the game. This information must be submitted by the applicant on a CD-ROM in PDF format.4 A November 2007 Gaming Control Board directive entitled “New Game Evaluation Procedure” references a bevy of additional documents that must be filed with the board. These documents include, but are not limited to, a letter requesting game approval; four copies of the table layout; a copy of the rack card that will be available to players during the field trial; a list of names (with telephone numbers) of people with whom the board may discuss aspects of the game; and a copy of the filing receipt from the United States Patent and Trademark Office in reference to the new game patent. Moreover, a notarized statement with regard to the applicant’s intentions as to how a profit is to be made from the submitted game and a breakdown of the percentage of ownership with reference to the applicant’s and/or developer’s company must be submitted. 5
In spite of the fact that developers of new games need not be licensed, personal history records must be filed. A personal history record must be completed by each executive, director and/or key employee of the developing company. The personal history record consists of a seven page review that contains a number of questions with regard to a person’s character and fitness. For instance, applicants must list any arrests, detentions, litigations and arbitrations they have been a party to; their previous residences and employment; and any privileged or professional licenses they may have held. Applicants are advised that the personal history record is an official document and that any misrepresentation or failure to reveal requested information may be deemed sufficient cause for the applicants to be called forward for a finding of suitability by the commission. “Request to Release Information,” “Release and Indemnity of All Claims” and “Affidavit of Full Disclosure” forms must also be signed and notarized.
Once all the required information has been collated, the application packet is submitted to the board for review. A deposit of five thousand dollars must be included to cover investigative costs, including shipment, inspection and incidental costs documented by the board.6 Additional deposits may be requested throughout the course of the investigation. All expenses incurred by the board during the investigation must be paid prior to the game going before the board for approval.
The application must be submitted to the board’s enforcement division, which is not to be confused with the technical division. Once the application packet has been reviewed for completeness, the statistical evaluation will be forwarded to the technical division for analysis and verification. After evaluation, a summary of the game will be prepared for the board chairman, recommending approval or disapproval of a field trial. The timeframe for the recommendation depends on a variety of contingencies. The most crucial being the failure to submit a complete packet, as this means the application will be denied and the incomplete packet will be returned.
If the new game is administratively approved for field trial, written notice is given. The developer is then responsible for supplying a working model of the new game to the casino licensee. If the game is approved for field trial as originally submitted, no changes may be made to the game without prior written permission from the board.
The field trial must start within 30 days of receipt of the approval. Prior arrangements with a casino licensee to conduct the field test are required, as a developer must submit a letter from a nonrestrictive casino license, agreeing to monitor and display the new game as part of the application packet. Two field-trial locations are permitted, provided that one of the locations is in Las Vegas. Yet, only one field trial table per casino is permitted unless otherwise approved by the board. For example, a field trial may be held in both Las Vegas and Reno, with each casino receiving one table. The field trials typically span 90 days; however, the board chairman may order trials lasting up to 180 days.7
A number of responsibilities are imposed upon the casino licensee during the field trial process. The licensee is required to videotape the new game during the entire field trial, and to test the new game against a “control game,” which is usually the existing game with the most similarities in method of play. Moreover, the licensee must submit weekly statistical reports on the results of the new game and of the control game, to the board. Those reports must include total drops, fills, credits and wins, as well as any patron complaints. Failure to submit complete and accurate data in a timely manner may result in termination of the field trial, resulting in a delay of the new game approval process.
Because the casino licensee bears the workload during the field trial, the licensee is entitled to receive 100% of the revenue produced by the game. To ensure this occurs, the developer of the new game is required to submit to the board, as part of the application package, a notarized statement attesting to the fact that the developer will forgo this revenue generated during the field trial.
Upon completion of the field trial, the casino licensee is required to submit a final written report summarizing its analysis of the test and recommending the game for approval, rejection or further field testing. Using this report, the enforcement division will prepare a request for final approval report and submit it to both the board and commission. The applicant and a representative of the field trial casino will receive written notification requiring their presence at the board and commission meetings. At this time, the board can either decide that it requires additional testing or give a recommendation to the commission whether to approve the game.8 In making the final determination whether to approve a new game, the commission considers whether such approval is consistent with public policy.9 To which, an economic evaluation is critical—i.e., does the game generate more revenues to the state than it costs to police.
Nevada regulators have made the process for new game approval quite manageable. With this manageability, however, comes the understanding that application procedures will be followed correctly and in a timely fashion, and that complete and accurate applications will be the standard. It is important that developers do not let the relative ease of the process lull them into a state of carelessness, as one misstep may not only lengthen the approval process but could ultimately prevent an otherwise successful new game from coming to fruition.
New Games Footnotes
1. A complete list of approved gambling games is published periodically by the Board’s Enforcement Division.
2. Among the games listed in the definition of “game” and “gambling game” are baccarat, bingo, blackjack, chemin de fer, faro, keno, pai gow, poker, roulette, twenty one and wheel of fortune. See Nev. Rev. Stat. § 463.0152.
3. NGC Reg.14.240.
4. NGC Reg. 14.230(2).
5. See New Game Evaluation Procedure (effective 11/07).
6. The Enforcement Division investigative hours bill at $80 per hour. The Technology Division bills at $150 per hour for completing the game evaluation. See New Game Evaluation Procedure (effective 11/07).
7. NGC Reg. 14.240(1).
8. NGC Reg. 14.250.
9. NGC Reg. 14.250.