Cashless Gaming Proposal Could Lead to Job Losses at Nevada Casinos, UAW Claims

Posted on: June 25, 2020, 09:26h. 

Last updated on: June 26, 2020, 09:32h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

The United Auto Workers (UAW) warns a plan to encourage more cashless gaming at the state’s casinos could lead to job losses and reduced tips among its members, as well as create more risk generally for fraud and litigation. The plan will be discussed Thursday, June 25 by the Nevada Gaming Commission (NGC).

Other concerns came from some providers of gaming technology who said that the language used in the proposal was unclear. The NGC is to hold a hearing on whether to update definitions such as “debit instruments.”

If changed, the move could make way for more debit and credit card use in casinos. Smartphone apps could also be used more frequently.

When reviewing the proposal, the UAW ⁠— which represents some 3,000 dealers or other gaming floor employees ⁠— worried not just about lost tip revenue and job losses, but also other “negative implications,” Brian Bay, president of UAW Local 3555, said in a statement.

Thousands of gaming workers would be potentially laid off or terminated,” the UAW’s statement to the NGC warns. “This could lead to a strain on state resources.”

There are other risks for problem gamblers and increased risk for security breaches, the UAW advises.

The proposed language also led to some confusion. For instance, Aristocrat Technologies, a provider of gaming machines and software, said in a statement to the NGC it wants “clarification regarding the difference between directly and indirectly” when it comes to the transfer of funds from a financial institution.

Automated Cashless Systems, an industry supplier based in Reno, wants to know if its ACS PlayOn System will need new approvals, an attorney for the company asked in a letter.

Cashless Gaming Initiative Praised

But the Association of Gaming Equipment Manufacturers (AGEM) voiced several compliments for the NGC initiative.

“As we collectively experienced over a decade ago with ticket-in/ticket-out technologies, driving the gaming environment toward a cashless environment will have profoundly positive impacts,” Dan Reaser, an attorney for AGEM said.

These outcomes range from enhanced legal compliance, improved public health and safety, especially given the COVID-19 pandemic, as well as more robust responsible gaming alternatives and advanced operating efficiencies,” Reaser continued.

The NGC apparently still wants to ban direct transfers of money from a player’s bank account to a casino gaming device, the Las Vegas Review-Journal reported. Transfers could be made via digital wallets or other approved cashless wagering systems.

Sandra Douglass Morgan, chairwoman of the Nevada Gaming Control Board ⁠— the companion regulatory body to the NGC ⁠— has backed the concept of cashless gaming. “I’ve been pretty public saying that I’m open to looking at new ways that technology can help attract new customers and be beneficial for not only the industry but even for responsible gaming measures as well,” Morgan recently told the Review-Journal.

Now, players who need cash go to an ATM. They are found in many locations within gaming properties.

The NGC previously approved ticketing systems where players can use technology to print a ticket or voucher at a kiosk located in the casino.

Among the companies which are looking to expand cashless technology options is Nevada-based Everi Holdings.

“We have had preliminary dialogue with [the] NGC on our various cashless solutions, including our [CashClub] Wallet product,” Darren Simmons, executive vice president and fintech business leader at Everi Holdings, told Casino.org. “They are supportive of new technology, especially when it comes to cashless wagering.” CashClub Wallet has been tried out in field tests, the Review-Journal reported.

The NGC previously approved Everi’s product called QuikTicket, a ticketing system. That product lets players get funds through a ticket purchase at kiosks that can then be placed into a gaming machine, Simmons explained.

Also, Shawn Quick, chief technology officer at ACS PlayOn, told Casino.org his company has “worked very closely with the Nevada GCB [Gaming Control Board] and Gaming Commission over several years to get PlayOn approved in Nevada [in 2019]. Many of the regulatory changes being considered were items that we discussed many times, and have been reworded to clear up confusion that existed.”

When asked for advice to regulators, Quick encourages them to move cautiously.

“Consult the experts to make sure you understand exactly how the technology works,” Quick said. “Consider the long-established term ‘follow the money’, as many of the technologies that will soon be presented may have security and accounting risks that … may not have been considered.”

Regulations Should Be Liberalized

Anthony Cabot, Distinguished Fellow in Gaming Law at UNLV’s William S. Boyd School of Law, further points out that “cashless wagering is the future of commerce in general and the casino floor in particular.

“The regulators need to allow the casinos to convert entirely to a wallet system that can be funded from any source and can be universally used throughout the resort,” Cabot told Casino.org. “A casino should be able to integrate the wallet with the rewards program fully. The regulations also need to be reconciled with a cashless system that persons who want to remain anonymous can access and use (like a prepaid card).

“The key, in any case, is to liberalize the regulation to allow the industry to adapt to any current or future payment methodologies without the necessity for a legislative or regulation change,” Cabot added. “The regulators also need to allow expedited approval of vendors, including waivers for major companies like Visa or Apple, and a rapid path to field trials.”

Also, Attorney V. Gerard (Jerry) Comizio, chair of the banking practice group at Fried Frank’s Washington, DC office and a professor at American University’s Washington College of Law, said, “Commercial and tribal casinos, like other retail customer-based industries, have been studying this issue for some time as they seek to implement cashless transactions on a wider basis. As such, where it is generally permissible under state gaming laws, some casinos already accept debit and credit cards, as well as Apple Pay and PayPal.”

What Is Cashless Gaming?

It typically uses existing ticket-out-ticket-in technology between slot machines (which dispense the ticket) and kiosks (which suck in the ticket, read a bar code, and dispense cash). Everi Holdings’ CashClub Wallet has expanded this approach. Players can get winnings deposited into a digital wallet when tickets are taken to kiosks.

Regulators will face obstacles because the new technology raises many potential issues ranging from hacking risk to the potential for players’ cards being accidentally left in machines and subsequent theft.