Action | Promulgate new regulation governing casino gaming |
Stage | Proposed |
Comment Period | Ended on 12/24/2021 |
Virginia Lottery
Permanent Regulation
Casino Gaming
11 VAC 5-90
Preferred Casino Gaming Operators’ Comments
The undersigned, representing the certified Preferred Casino Gaming Operators in Virginia (“PCGO Group”), respectfully submit the below comments and suggested amendments to 11 VAC 5-90, Casino Gaming. The PCGO Group has worked diligently to provide consolidated comments on issues of importance in making Virginia a competitive gaming state. Individual PCGOs may have additional comments which will be submitted separately from the consolidated comments contained herein.
The issues we have raised and the suggested fixes we are submitting are rooted in regulatory research regarding best practices across other gaming states, particularly those states that Virginia will ultimately compete with for gaming market share. The PCGO Group believes that the suggested regulatory changes will improve Virginia’s competitiveness and thus increase state revenue as our facilities go into service in the Commonwealth.
Thank you in advance for your consideration,
Headwaters Resort & Casino Rivers Casino Portsmouth
Caesars Entertainment Hard Rock Hotel & Casino Bristol
Regulation Number |
Concern/Clarification |
11 VAC 5-90-20 Unclaimed Jackpots
A. A player shall have a maximum of 180 days from the date an unclaimed jackpot is won to claim it. |
There may be instances in which a customer is unable to claim a jackpot within 180 days, and regulation should provide flexibility for claiming of jackpots beyond that period
A. Unless a casino operator submits a request in writing to the department and the department agrees to the request, a player shall have a maximum of 180 days from the date an unclaimed jackpot is won to claim it. |
11 VAC 5-90-40 Licenses and permits generally
H. 3. Every five years after the date a license is issued, a facility operator shall submit to the department for review and approval a reinvestment projection related to the casino gaming establishment to cover the succeeding five-year period of operations. |
Requiring department approval for reinvestment plans every five years is unusual and overly burdensome. Capital plans should be included in an operator’s license renewal application.
H. 3. As part of its license renewal application, |
11 VAC 5-90-90 Enforcement
D. 5. Department staff shall prove a licensee or permit holder with notice of the violations that describes the statute, regulation, or directive allegedly violated, along with the director’s recommendation for addressing the alleged violation. |
Providing investigative findings is helpful to operators, appropriate, and consistent with regulatory practice elsewhere in the U.S. D. 5. Department staff shall provide a licensee or permit holder with notice of the violations that describes the statute, regulation, or directive allegedly violated, along with the investigative findings and director’s recommendation for addressing the alleged violation. |
11 VAC 5-90-90 Enforcement
F. 1. The director may provide a licensee or permit holder with the opportunity to discuss with staff a means of entering into a voluntary settlement agreement between the licensee or permit holder and the department by which the violation is settled without a sanction or civil penalty. F. 2. A settlement may involve elements of corrective action and may also include a remittance of funds to the department from the licensee or permit holder. |
Guaranteeing that operators have opportunities for discussions with staff of voluntary settlement agreements would encourage a spirit of regulation by consensus. Operators should also be provided the opportunity to make affirmative defenses as part of the settlement process.
F. 1. The director shall F. 2. A settlement may shall involve elements of corrective action, affirmative defense, or both and may also include a remittance of funds to the department from the licensee or permit holder. |
11 VAC 5-90-100 General Facility Operator Requirements
D. 6. If the certification under subdivision D 5 states that the facility operator is not in compliance, the department shall require the operator to submit a plan of compliance, corrective action, or request for variance consistent with this chapter. |
There may be situations in which there is a good-faith disagreement on an operator’s compliance and there should be procedures to evaluate the merits of any disagreement.
D. 6. If the certification under subdivision D 5 states that the facility operator is not in compliance, and the operator does not contest the host city’s determination, the department shall require the operator to submit a plan of compliance, corrective action, or request for variance consistent with this chapter. If an operator contests the host city’s determination, the department shall review the matter and issue a ruling on the operator’s compliance or non-compliance. |
11 VAC 5-90-100 General Facility Operator Requirements
D. 11. b. (3) Provided access to health insurance and retirement savings benefit opportunities for all full-time employees of the facility operator performing work at the facility; |
Many benefit programs include reasonable probationary periods and should be accommodated.
D. 11. b. (3) Provided access to health insurance and retirement savings benefit opportunities at the conclusion of a reasonable probationary period for all full-time employees of the facility operator performing work at the facility; |
11 VAC 5-90-100 General Facility Operator Requirements
G. 6. No licensee or permit holder shall accept postdated checks in payment for participation in any gaming operation. |
A “knowingly” standard is appropriate for assessing compliance with this requirement.
G. 6. No licensee or permit holder shall knowingly accept postdated checks in payment for participation in any gaming operation. |
11 VAC 5-90-100 General Facility
4.A facility operator shall be subject to review by the department on an ongoing basis and annual to determine compliance with gaming law, this chapter, and directives of the department and the director |
The review should be coincident with license renewal processes.
4.A facility operator shall be subject to review by the department on an ongoing basis |
11 VAC 5-90-100 General Facility Operator Requirements |
The voluntary exclusion program for patrons of Virginia casinos should be administered by the state, consistent with detailed standards and procedures that are articulated in regulation, apply to all casinos, and be structured similar to the way self-exclusion is structured in jurisdictions across the United States. |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
E. 2. a. A certification by the facility operator’s chief executive officer or chief legal officer that, to the best of their knowledge, the submitted internal controls conform to the requirements of the casino gaming law, this chapter, and any directives of the department or the director; |
Typically, a facility operator will have a general manager, not a chief executive officer. “Chief executive officer” confuses property personnel with corporate personnel. We request that this change be made throughout where the reference to the senior-most staff of a facility is intended.
E. 2. a. A certification by the |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
F. 3. Unless otherwise specified by the department, reports to the department shall be signed by the: a. Chief executive officer if the facility operator is a corporation; b. General partner if the facility operator is a partnership; c. Manager if the facility operator is a limited liability company; d. Chief executive officer or functional equivalent if the facility operator is any other form of business association; or e. Owner if the facility operator is a sole proprietorship.
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The suggested changes builds in some needed flexibility concerning who should be permitted to sign the required reports. F. 3. Unless otherwise specified by the department, reports to the department shall be signed by the: |
11 VAC 5-90-110
K. 3. A facility operator’s surveillance department operating procedures shall, at a minimum, require: |
Surveillance incident reports are used as evidence, so there should be a standard to ensure reporting software has controls to reasonably prevent malicious tampering. As currently written, the regulation could be interpreted to mean that once an entry is typed, it must permanently become embedded, which does not seem to be a reasonable standard. Surveillance reviews and investigations evolve to where information or findings might change as investigation is ongoing and sometimes the Surveillance Department's initial direction changes. Furthermore, Surveillance employees are not always perfect in their initial documenting of a report resulting in grammar issues or incorrect findings. Something as simple as forgetting the word “no” can have a major impact and cause misunderstandings down the road. For example, if a report should state: “Surveillance reviewed the play of John Smith and found no cheats,” but the employee making the entry inadvertently neglected to enter "no" before "cheats," this finding would ultimately be incorrect and lead to a misunderstanding about John Smith's play status. Therefore, to eliminate any misunderstanding, a supervisor should have the ability to correct, or reopen the report for correction, during his/her audit of reports.
A facility operator’s surveillance department operating procedures shall, at a minimum, require: |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
L. 3. A facility operator’s security department operating procedures shall, at a minimum, include: |
“Ensure” is an unrealistic and inappropriate standard here.
L. 3. A facility operator’s security department operating procedures shall, at a minimum, include: |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
Y. 3. A facility operator shall provide a player with a record of casino game spending levels if: |
Estimates of table game spending are just that, estimates, and facility operators cannot provide exact documentation of these spend levels.
Y. 3. A facility operator shall, to extent practical, provide a player with a record of casino game spending levels if: |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
O.2.d. Timely report a deficiency in, or noncompliance with, the facility’s internal controls to: |
A materiality standard is appropriate for notice to the audit committee and chief executive officer.
O.2.d Timely report a deficiency in, or noncompliance with, the facility’s internal controls to: |
11 VAC 5-90-110 Casino Gaming Facility Minimum Internal Control Standards
O. 3. The audit department shall audit at least semiannually the functions and operations of the facility’s: h. Player tracking; and i. Surveillance department. |
The suggestions are provided to recognize relative risk as well as accepted industry standards.
O. 3. The audit department shall audit at least semiannually the functions and operations of the facility’s: i. Surveillance department; |
11-VAC-5-90-120 Casino Gaming Facility Standards
D. 5. A facility operator may not implement any change to its approved gaming floor plan without the prior written approval of the department |
Casino floors may experience slight cosmetic and/or non-material modification that do not impede approved routes, machine counts, or table counts.
D. 5. A facility operator may not implement |
11VAC5-90-150 Slot machines
Y. External bonusing system - additional requirements.
1. A facility operator may utilize an external bonusing system that has been tested, certified, and approved under this section.
2. In addition to complying with the minimum design standards of subdivision V of this section, a casino gaming machine connected to an external bonusing system may not equal or exceed an average payout percentage of 100% when the contribution of any bonus awards available on a casino gaming machine is added to the casino gaming machine's average payout percentage. |
In other jurisdictions, we award bonuses to players based either upon their total spend or their potential to spend. In the former case, we calculate total spend across all machines a player plays but make the award to a single machine. Doing so could drive that machine’s payout above 100% for a short time period. In reality, the one machine is paying an award that the player earned at a number of machines.
A similar issue arises with progressive jackpots. Example: 30 games are lined to a common progressive and 2% of the wagers on each game are added to the progressive. The progressive grows to $200,000 and is won on one of the machines. That machine pays out $200,000 and goes well above 100% payout.
Ideally, this language would be modified to indicate that individual player bonuses cannot accrue from any single gaming machine at a rate that equals or exceeds an average payout of 100%. If we pay attention to accrual, instead of reward, the above problems are resolved.
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