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AMERICAN GAMING ASSOCIATION
The Root of the Problem
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Illegal slot games take advantage of players, states and communities
n normal times, one of the most exciting parts of the Global Gaming Expo (G2E) is walking the trade show floor and seeing all the new gaming machines that suppliers have developed. It’s thrilling to see the newest products that will soon make their debut on casino floors. The road to create them reflects years of hard work, including technological innovation, research into consumer preferences and negotiating intellectual property rights. But creating games is only part of the story. Before these machines ever reach the floor, they must undergo rigorous testing and secure approvals from gaming regulators. Regulators are notified when machines are shipped to casino properties, and qualified individuals must receive the secured shipments once they are delivered. In some cases, suppliers even have to ship machines in separate parts to protect against tampering. Once these machines are installed on the casino floor, they are continuously monitored and maintained to ensure fair game play. Although game approval is a lengthy process, it is central to ensuring patrons have confidence they are treated fairly when visiting our properties. However, illegal and unregulated gaming machines continue to proliferate across the country, flouting regulations, undermining consumer confidence and compromising the value of casino gaming. Unregulated machines skirt the law by calling themselves “skill-based,” “nudge,” or any number of euphemisms to operate in gray areas of the law to avoid regulation, licensing and taxation. What’s worse is that some machines simply operate in violation of the law, taking the risk of operating openly—and illegally. These machines continue to operate across the country in illegal slot parlors, convenience stores, truck stops, bars and more, putting consumers at risk while also failing to provide any meaningful tax revenue to our communities. The AGA recently added new resources to aid in the fight against these machines. In mid-April, we released a new white paper and infographic outlining the rigorous standards the regulated casino gaming industry upholds. The paper further illustrates how unregulated and illegal gaming machines deplete the value of the casino license privilege, con-
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Global Gaming Business
MAY 2021
By Jess Feil By Jess Feil
fuse and endanger customers and deprive states of key tax revenue. This white paper will be the basis of ongoing and sustained efforts to educate our partners and allies in law enforcement and other industries, all of whom will be critical in the fight against illegal machines. In many states, our partners in law enforcement understand the seriousness of this issue. Law enforcement agencies regularly investigate complaints of illegal and unregulated gaming machines, often seizing machines and filing criminal charges for manufacturers and operators that put communities at risk. This year alone, law enforcement units have conducted raids in Arkansas, California, Hawaii and New Jersey. While these raids are focused on illegal machines, they also uncover other forms of contraband, such as drugs, weapons and illicit funds tied to organized crime, underscoring the expanded danger of illegal gambling to our communities. Unfortunately, while many law enforcement officials understand the importance of rooting out these machines, others continue to look the other way. Education is central to this effort—and our industry must tell our story about gaming regulation, including the necessary testing and approvals to ensure fairness and foster consumer confidence. We must also further educate law enforcement and policymakers about the difference between our regulated industry and unregulated machines that take advantage of legal loopholes. Beyond policymakers, businesses and companies allowing their licensees and franchisees to circumvent the law must be held accountable. By working with policy leaders, law enforcement and other businesses, we can root out illegal gaming machines once and for all. Other industries can also be our allies in fighting against illegal machines— but only if we educate them. With this cooperation, we will make meaningful progress in removing illegal and unregulated machines, which will protect consumers and communities while ensuring the gaming industry can continue to generate the jobs, local business and tax revenue that communities rely on nationwide. Jess Feil is vice president, government relations and gaming policy counsel for the American Gaming Association.
