Defining Slots-For-Tots

The new Millennium has begun with a new controversy for legal gaming: whether some slot machines might be
unduly attractive to children.

The issue became news in October, 1999, when the Nevada Gaming Commission (ANGC) made public its growing
unhappiness over gaming devices with cartoon themes. In December, the NGC circulated proposed regulations.
On January 27, 2000 the NGC met and adopted amendments to NGC Regulation 14, prohibiting slot machines with
themes derived from products marketed to children.

The mass media loves stories like this. Headlines of AChildren At Risk! always sell papers, especially tabloids.
Television news shows want action and color: one slot machine is worth a thousand talking heads. Even
radio could get in on this story, throwing out familiar names, like Betty Boop® and South Park®.

Gambling is a sexy issue, so long as it does not get too complicated. It also gives rise to strong emotional
reactions, especially from its opponents, the Aanti’s.

The enormous success of Wheel of Fortune® led manufacturers to look for other well-know brand-names.
The issue over age-appropriate gaming devices was inevitable, since so many of our best-loved trademarks
come from our childhood: Monopoly®, The Three Stooges®, Elvis Presley®. The whole point of
branded slots is to tap in to our warm, fuzzy feelings of nostalgia. Such selling-by-association is
certainly nothing new: movies like Star Wars® may make more money from toys and other products than
from the movie itself. But it is relatively new to legal gambling.

Regulators face a myriad of problems when an issue like kiddie-theme slots is raised in the press.

It would be natural to think the first question to be resolved is whether the problem really exists This
is not as easy as it seems. Exactly how does one discover whether children are being unduly enticed into
gambling by machines with themes?

What is the standard? Would it be enough to show that merely one child in the country put money into a
particular slot machine? How do we prove that the child would not have made the bet, but for the lure of
the brand name?

It is very difficult to show that something is true beyond any doubt, like the claim that certain games
create underage gambling. But it is nearly impossible to prove the opposite, that something is not true.
What evidence would you use to show a slot machine is not unduly attractive to children?

Since we are forced to deal with probabilities, should regulators be concerned if there is only a slim
possibility the claim is true? For a politically explosive issue like this, regulators will, often
unconsciously, follow the path with the least downside risk to themselves.

If regulators ban certain slots that should not have been banned, the loss to casinos, manufacturers and
players is small and difficult to measure. But, if they allow a device they should have outlawed, there
is the possibility of scandal (such as pictures of kids playing slots on national T.V.) that will raise
questions about the regulators’ own competence.

Although there may be a bias in favor of imposing new standards, in the name of protecting children, there
is also a bias against making any new rule. The first question a good regulator, or lawyer representing an
interested party, will ask is whether these regulators have the power to issue regulations such as these.

Major constitutional challenges make news. But the day-to-day world of making regulations involves questions
of procedure and delegation.

What procedures should the regulators use to guarantee due process — that all interested parties have
a fair and equal opportunity to have their say — not just now, but when new machines are invented in
the future? The easiest format is to allow presentations of evidence and arguments at hearings open to
the public.

The delegation doctrine is also fundamental to our democratic system. Regulators are appointed, not elected.
The only power they have is the specific, limited power given them by the legislature or governor.

The NGC found a law passed by the Nevada Legislature to justify its action. Section 463.350 of the Nevada
Gaming Control Act makes it a crime for a licensed operator to allow anyone under 21 to gamble. The NGC
declared its new rules Awill further the enforcement of 463.350 by establishing standards for gaming device
themes.

Is it necessary to have a prohibition on these games at all? Regulators of riverboat casinos, which can
easily prevent any child from boarding, will probably find it unnecessary to issue new rules about gaming
themes. In other cases self-regulation will work: You are not going to see any Pokemon® slot machines.

How does a regulator define what games are prohibited? A rule that simply lists cartoon characters and other
kiddie attractions, obviously will not work: there are too many and they are constantly changing.

The NGC had to take three pages to describe what themes it was making illegal. The regulators used a mix
of general statements and specific examples. Banned are themes Abased on a product that is currently and
primarily intended or marketed for use by persons under 21.” These include TV programs, cartoons, books,
board games, movies and video games less than 21 years old with AG and similar ratings.

Exceptions are allowed where Athe theme is attractive to adults because of its nostalgic appeal. The
regulators also gave themselves the power to Arestrict the time, place and manner in which an approved
gaming device may be displayed. And they grandfathered-in Aany themes that were used in connection with
gaming devices already approved.

Being a regulator may seem like child=s play, but usually it is hard work.