Page Number of Emergency Regs

Regulation Number

Concern/Clarification

29 (and repeated apparently by mistake at p. 33)

Applications for and issuance of facility operator’s licenses

11 VAC 5-90-60

2. The preferred casino gaming operator may not deviate substantively from the plan it submitted to the host city and the department during the certification process set out in §58.1-4107F and §58.1-4109 of the Code of Virginia.

Operators should be able to respond to changing market conditions as well as improved understanding of both customer and host city preferences. The language as proposed sets in stone project plans, and would not permit operators to make changes such as expanding hotels, adding amenities, changing amenity mix, etc.

Recommendation: that language should be added to the end of the sentence as follows: “…of the Code of Virginia, unless the deviations have been approved by the eligible host city and are otherwise consistent with all requirements of chapter 41 of this Act.” 

43

Vendor-major and Vendor-minor are listed as 2 of the 4 categories of “service permits” under 11VAC5-90-80. 90-80(E)

E. The fee for each service applicant shall be a:

1. Nonrefundable $500 application fee for the service permit applicant, plus any applicable fingerprinting fees; and

2. $50,000 background investigation fee for any principal not the holder of, or applicant for, a supplier permit, including any applicable key manager.

Reduce $500.00 Fee Amount

Fees in other states:

New Jersey - $95 + $66.05 fingerprinting/ NJ Key Employee $750 plus investigation expense

Pennsylvania - $350/ principal $2500 + any cost that exceed this amount. 

Ohio - $250

IL Level 2 - $200/ Key Person - $5,000

IN Level 2 - $200/ Level 1 Key Person -$1,000 + investigation fees

Maryland – Occupational - $250 app fee + 77.25 Fingerprint + $150 issuance = $437.50 total

Recommendation: that the fee be revised to be $300.00 for the application fee plus any applicable fingerprinting fees….”

Clarify who has to pay the $50,000 background investigation fee to be consistent with the statutory provisions

Recommendation:

E. The fee for each service applicant shall be a nonrefundable $300 application fee plus any applicable fingerprinting fees.

F. The fee for any principal not the holder of, or applicant for, a supplier permit, including any applicable key manager, shall be a nonrefundable $50,000 background investigation fee.

75

Use of Cash

The statute (58.1-4122) states “Casino gaming wagers shall be conducted only with tokens, chips, or electronic cards purchased from a licensed casino gaming operator.”  The draft regulations repeat the same language in 90-110(Y):

90-110(Y):

Y. Prohibition on the use of cash, credit cards and debit cards

1. A casino game may not be played or activated in any way by insertion, directly or indirectly, or use of:

a: Cash;

b. Credit card;

c. Debit card; or

d. Electronic transfer of funds from a credit card or debit card.

2. A casino game may be played only with tokens, chips, or electronic cards purchased from the facility operator.

Slot machine section (90-150(P)(3)a.(1)(a).

Slot machines are required to have…

a. A coin-in meter that:

(1) Accumulates the total number of credits wagered whether the wager involves:

(a) Currency;

(b) A gaming ticket;

(c) A promotional play instrument;

(d) Downloaded credits; or

(e) Credits won; and

(2) Does not accumulate subsequent double-up wagers or other wagers of intermediate winnings accumulated during a game event;

Use of Cash at Table Games:

The emergency regulations appear to indicate that a player may use cash to purchase chips or tokens from a dealer at a table game. 

Recommendation: Clarify the regulations regarding the ability to use cash at a table game to convert to chips or tokens.

Use of Cash at Gaming Machines:

Recommendation:

90-110(Y):

Y. Prohibition on the use of wagering with cash, credit cards and debit cards

1. A casino game wager may not be conducted with played or activated in any way by insertion, directly or indirectly, or use of:

a: Cash;

b. Credit card;

c. Debit card; or

d. Electronic transfer of funds from a credit card or debit card.

2. A casino game may be played only with tokens, chips, or electronic

cards purchased from the facility operator.

3. Neither the purchase of casino chips nor the conversion of cash, promotional play instrument, or gaming tickets to electronic tokens or credits at a slot machine shall constitute playing a game or placing a wager.

151

Slot machine payout percentages

11 VAC 5-90-150 Slot Machines

Subsections K.2. through K.6

2. A slot machine shall have an average payout percentage that:

a. Is 89 percent or more; and

b. Does not exceed 94 percent.

3. Notwithstanding the requirements of subdivision K 2, in no event may a slot machine have a theoretical payout percentage of less than 85 percent.

4. A facility may not make available for play a slot machine with an average payout percentage that exceeds 95 percent without the written approval of the department.

5. A facility’s gaming floor shall be configured to collectively achieve, at all times, an average payout percentage that exceeds 89 percent and does not exceed 94 percent.

6. A facility operator shall, in selecting slot machines and configuring a facility’s gaming floor, rely on the slot machine’s theoretical payout percentage.

The slot machine payout percentage requirements are confusing, anti-competitive, and will not maximize revenue to the Commonwealth.

The distinction between “average payout percentage” and “theoretical payout percentage” is unclear.

Hold percentage requirements should provide economic and competitive parity with other commercial casinos in the eastern U.S. They should give operators the flexibility to implement innovative slot machine offerings with widely varying payouts, and they should provide opportunities for operators to maximize tax revenue for the Commonwealth.

Virginia’s 89 percent minimum return percentage requirement is the highest in the region, exceeding the rate in Maryland (85%, per legislation which passed the Maryland General Assembly this year), West Virginia (80%), Ohio (85%), Pennsylvania (85%), New Jersey (83%), Delaware (87%), and New York (85%).

Recommendation: revise Virginia’s minimum payout percentage to 84%.

168

11 VAC 5-90-150 (K) (2) (B)

11 VAC 5-90-150 (K) (4)

11 VAC 5-90-150 (K) (5)

The regulations set a maximum payout percentage for each slot machine of 94% and a maximum gaming floor average slot payout of 94%.  The casino operators ask that the individual slot machine maximum payout percentage and the maximum gaming floor percentage be eliminated.  Higher payout percentages directly benefit the consumer and allow the casino operators to attract customers and adjust to market conditions in other competitive states.  By including a maximum payout percentage, Virginia may receive less tax revenue and unnecessarily limit payouts to gaming customers.  Please see the attached report from Eilers & Krejcik Gaming, LLC, a global gaming research and analytics company.

Recommendation:  Given the maximum percentages that exist in competitive states in the Eastern United States, revise the regulations to provide for a maximum payout percentage of 100%.

CommentID: 97736