NEVADA GAMING'S TOP COP RECOLLECTS

26th December 2000
By JEFF SIMPSON
lasvegas.com GAMING WIRE
 

  Gaming Control Board Chairman Steve DuCharme's nine-year tenure on the
regulatory body ends Jan. 2.
  In a recent interview, DuCharme discussed his tenure and future plans and
also talked about challenges Nevada's gaming industry and state regulators
are likely to face.

  DuCharme, 53, graduated from Las Vegas High School, and earned a
bachelor's degree in criminal justice from the University of Nevada, Las
Vegas while serving as a Las Vegas Police detective.
  Appointed to the control board by former Gov. Bob Miller, DuCharme was
the board member responsible for overseeing the enforcement division's
day-to-day activities.
  When former Chairman Bill Bible resigned from the board in 1998, Miller
appointed DuCharme chairman.

  Among the critical issues the board's handled during DuCharme's tenure as
chairman was problem gambling, prompted by a concurrent study of the
problem by the National Gambling Impact Study Commission.
  Another key issue DuCharme's board faced was gaming industry
consolidation, after a series of megamergers and casino purchases left the
Strip and the city's locals market in the hands of a few large operators.
  DuCharme married Patricia Becker, a former control board member and
current Aladdin lawyer, in November.

Question: What are your thoughts as your tenure nears its end?
Answer: Where does the time go?

Question: What are some of the biggest challenges for Nevada's gaming
regulators going to be during the early part of the 21st century?
Answer: Well the big issue out there right now is Internet gaming, in terms
of how it will affect Nevada's gaming industry, and whether Nevada's gamers
will get involved in it. I think that is the most serious issue moving on
the horizon. In the short term, the congressional moves to restrict
wagering on collegiate events will be important. While college sports
betting's not a huge revenue producer for the industry, it's an important
factor. It generates a lot of excitement, and it's something that separates
Nevada from the other gaming states.

Question: If the state of Nevada decided to legalize and regulate Internet
gaming, would you want it to be regulated by the current regulatory
framework, or by a separate body dedicated to regulating Internet gaming?
Answer: If legal Internet gaming were to be the state of the law in Nevada,
I think the Nevada Gaming Commission and the control board should regulate
it and would be in the best position to regulate it. If Internet gaming is
what the Legislature and the governor thinks is good for Nevada in the way
of public policy, then clearly the current regulatory system is the best to
regulate it.

Question: What are the most serious obstacles to the state regulating
Internet gaming?
Answer: The ability to restrict where it's deployed to only those
jurisdictions where they want it, and where it's legal. We've had problems
in the past with licensees with Australian Internet betting operations who
were unable to restrict where the games were deployed. Two, you've got the
problem of inappropriate individuals accessing the (Internet gaming Web)
sites, not only minors, but people with legitimate gambling problems. We're
seeing a growth in problem gambling here in Nevada with the explosion of
neighborhood gaming, which was a problem we didn't see 20 or 30 years ago
when we exported our problems. You can see how problem gambling would be
even more troublesome with people betting from their living rooms.

Question: People do that now, don't they?
Answer: (Yes,) but the state's not putting its stamp of approval on it.

Question: Estimates are that upward of 50 percent of worldwide Internet
betting is made from persons in the United States. Do you think Nevada will
be left out of the huge market if it doesn't take the lead regulating
Internet gaming?
Answer: Obviously a Nevada licensee conducting this type of endeavor gives
it instant credibility, just as our casinos had instant credibility in the
early '90s when they built casinos in other states as new jurisdictions
opened up. If Nevada gets involved (in Internet gaming), I'm sure it would
similarly advance the business of Internet gaming, but I'm not personally
convinced it's the right thing to do. We've got in excess of $20 billion in
infrastructure and construction and a huge airport here, and we promote
Nevada and Las Vegas as a total entertainment package, not just where you
sit around in your living room in your bathrobe playing video poker all day
on your credit card. We offer more of an entertainment experience than just
gambling for gambling's sake.

Question: Would a ban on college sports betting pose a serious threat to
Nevada?
Answer: There are so many intangibles here that it's hard to quantify.
People come here for the Final Four, they come here during the bowl games
because they can make legal wagers and Nevada's an exciting place to be.
And it would be the elephant's nose under the tent in the form of federal
regulation, which we've strongly tried to resist, because it's a states'
rights issue.

Question: What was your most difficult case during your tenure on the board?
Answer: Well, one would be the (Australian slot machine manufacturer)
Aristocrat (Leisure Ltd.) investigation, which began during the late '80s
and continued into the '90s. (One of Aristocrat's license applicants) was
represented by Paul Bible when he reapplied after a year-long investigation
(lawyer Paul Bible is Bill Bible's brother), which caused Chairman Bible to
recuse himself. So Chairman Bible handed the gavel to me, and I had only a
little experience at that point. We held a lengthy, contested suitability
hearing, with a very highly respected attorney. So, while all suitability
hearings are important, this one for me was a difficult one because of the
added responsibility.

Question: What about the case of Ron Harris, the control board computer
software technician caught rigging gaming devices?
Answer: When you have internal problems, it's troubling, because you're
concerned about whether there are safeguards you should have had that you
didn't have. But when we went back and reviewed the agency and the staff,
we do have solid, competent, honest employees, and over my tenure we've had
one bad apple who embarrassed the agency.

Question: Who's mentored you during your service on the board, and who did
you model your leadership style on?
Answer: I modeled myself on Chairman Bible in the sense that he's honest,
he worked hard, and he believed in the agents and the agency. Everybody has
there own style, and while I was incredibly lucky to have worked with Bill
for over seven years, there have been a number of people who've brought a
lot to the agency while I've been here.

Question: There was tension between Mr. Bible and the attorney general
(Frankie Sue Del Papa) while he was chairman. As the attorney general's
office must work closely with the board, how has the relationship between
the agencies been while you've been chairman?
Answer: I think the attorney general's gaming division is obviously the
support for the control board and the Gaming Commission. They pack a lot of
horsepower when they say "this is our interpretation of the statutes and
regulation." You put yourself at risk if you go against the legal advice of
your own lawyers. I've found them very willing to explore various avenues
on what needs to be done to further gaming regulation in the state of
Nevada.

Question: You've described the problems retaining the board's agents in the
face of expanded opportunities and recruitment by the public and private
sector. What can be done?
Answer: They are incredibly professional and dedicated to the mission of
the agency. When they're out in the field, that professionalism manifests
itself to the people we're regulating and investigating. I can see the
applicant or the licensee thinking: "This agent is making only half or
two-thirds what I pay my employees." So it's a target rich environment for
them to lure our agents away. It's hard to stand in the way of someone's
upward mobility, and we have no ability, salarywise, to compete with these
private enterprises or public agencies.

Question: Do you have any regrets about things that you were unable to
accomplish or that you would have liked to have done differently during
your tenure on the board?
Answer: No. No regrets. I've really enjoyed it. I can't believe it went by
so fast. You know, I'm glad I started out as a board member because I just
couldn't cut it as an agent. Over the years I've learned quite a bit, from
the other board members, from the agents and from the people in the
industry. It's been an incredible learning experience.

Question: What accomplishment are you most proud of during your tenure on
the board?
Answer: That the state of gaming regulation in Nevada has been stable, that
it's been a platform for unprecedented growth, and that it looks like it
will remain stable with the appointment of Scott Scherer to the board.
Question: What are your future plans? By law you can't be employed in the
industry you regulated. What will you do during that year?
Answer: For the first few months I have a lot of chores to catch up on, and
a stack of books I haven't had an opportunity to get to. I'm still getting
requests to speak at conferences, but I don't have any real concrete plans.
Question: Would you be interested in a regulatory job in another jurisdiction?
Answer: I don't envision a full-time job as a gaming regulator in another
state. Possibly I could consult for any regulatory body that might request
my help.

Question: After the one-year statutory prohibition against gaming industry
Answer: I would keep all my options open, but I don't have any plans to do
anything at this point. I would imagine if I stay home doing "Honey-dos"
for a year I'll be ready to go do something.

Question: Any final thoughts?
Answer: I was telling someone the other day, I was just 22 or 23 when I
started in police work, and there is no pride like a 22 year old kid
putting on his police uniform for the first time, and going out to work. I
was so proud I felt like I was going to burst. I've felt the same way being
the chairman of the Gaming Control Board. It's that fine of an organization
and I'm proud to be associated with it.

www.lasvegas.com/gamingwire
 
 

NEW NEVADA GAMING BOARD MEMBER DISCUSSES JOB

By JEFF SIMPSON
lasvegas.com GAMING WIRE

  Scott Scherer, Gov. Kenny Guinn's appointment to fill the Gaming Control
Board seat of outgoing chairman Steve DuCharme, believes the main asset
he'll bring to the regulatory agency is his breadth of experience.
  In a recent interview conducted at the state capitol, Scherer said he
believes the wide range of government and gaming industry jobs he's held
will enable him to work with board members Bobby Siller and Dennis
Neilander to continue the agency's effective regulation of Nevada's biggest
industry.

  Scherer, 38, is a native Nevadan. He attended Clark High School, and
graduated from Johns Hopkins University and the University of Washington
Law School.
  After law school, Scherer worked for a small Las Vegas law firm from 1984
to 1987. In 1987 he took a position with the attorney general's gaming
division, where he served until 1990.
  In 1990 he was elected to the state Assembly, and served two two-year terms.
  Scherer returned to private law practice when he left the employ of the
attorney general's gaming division. He took a position as International
Game Technology's general counsel in 1992, and served the firm in various
capacities through 1999.

  Scherer was the Republican nominee for attorney general in 1998, but lost
to Democratic incumbent Frankie Sue Del Papa.
  Guinn asked Scherer to serve as his general counsel when he took office
in January 1999. Scherer served as the governor's top legal advisor until
January 2000, when Guinn made him his chief of staff.
  Guinn selected Scherer to fill the control board seat in November; he'll
officially take the seat on Jan. 3.
  Scherer and his wife Kay have two sons, Nick and Matt.

Question: If the state needs additional revenue, should the gaming industry
pay more taxes?
Answer: With all the new competition out there, from other jurisdictions,
tribal casinos and within the state, it's important to keep our tax rates
low. That being said, if there ends up being a need for additional revenue,
I think it's unrealistic to think the gaming industry shouldn't contribute.
But if we truly want to diversify the economy, we need to diversify the
revenue base.

Question: You emphasized the "if." Is it certain Nevada needs additional
revenue?
Answer: No. It's not certain.

Question: How healthy is Nevada's gaming industry?
Answer: It's fairly healthy overall, but there are warning signs out there.
I think industry consolidation will continue. The industry is not just
important in the big cities; in any Nevada community of any size, casinos
tend to be among the largest employers.

Question: What challenges will gaming regulators face in the next few years?
Answer: We've got the best regulatory framework here in Nevada, but we need
to do more than regulate. We need to be prepared for change.

Question: What should the state do about Internet gaming?
Answer: I think it's important we get ahead of the curve. The issue has to
be addressed. If Internet gaming isn't legal in Nevada, how do we enforce
our prohibition? The result is that the law is enforced against U. S.
companies, but there's little we can do against foreign companies.

Question: What's the solution?
Answer: We have to ask if we can effectively prohibit Internet gaming. If
not, we need to ask if we can effectively regulate it. No safeguards
(against children betting or against people betting from jurisdictions
where such wagering is illegal) are foolproof. Casinos card minors, but
some minors do get in and gamble. Nothing is 100-percent successful. You
have to decide what level of effectiveness is acceptable.

Question: The governor's office and the attorney general's office have
direct, top-to-bottom command structures. The board is different, with
three members together serving the executive and administrative functions.
Will the change require some adaptation on your part?
Answer: I don't think it will be a big change. The legislature and the
Nevada Commission of Ethics (on which Scherer served from 1996 to 1997) are
collegial bodies. I have tremendous respect for both Bobby Siller and
Dennis Neilander. I'm confident we'll be able to work very well together.

Question: You ran against Frankie Sue Del Papa in the last attorney
general's race. Will you be able to work with the attorney general in your
new capacity?
Answer: I'll be able to establish an effective working relationship. I've
done it at the governor's office, and I used to work in the AG's gaming
division.

Question: Are there any changes the board can make to do its job more
effectively?
Answer: One thing I think regulators need to do is standardize more of the
forms license applicants and holders need to fill out. If the forms were
standardized across different jurisdictions, the companies and the
taxpayers would save time and money avoiding duplicated effort. Also, more
forms should be available on-line. The board does better in that regard
than most state agencies, but we need to do even better.

Question: How significant is the potential impact of a federally-imposed
ban on college sports betting?
Answer: It's important, and not strictly from the revenue side. It's an
attraction - it brings people to Nevada. Aside from being at the game
itself, Nevada's the place to be for the Super Bowl, for March Madness or
for the college bowl games. There is a fear that federal intrusion won't
stop at college sports betting. The public needs to know this is one more
instance of government trying to tell people how to spend their money.

Question: Is retention of control board agents a serious concern?
Answer: It is, and I'll be an advocate for pay increases. If we're going to
stay the leader we have to have quality people and experienced people.

Question: By taking a position on the board, which carries a four year
term, are you committing to not running for elective office during your
term?
Answer: I'm not ruling it out entirely, but it would have to be something
the governor thought I should do or encouraged me to do.
 

Jeff Simpson
Jeff_Simpson@lasvegas.com