Defining Slots-For-Tots

The following article was originally published in Casino Executive and is presented in Gaming floor with permission of the author. Professor Rose can be reached at his web site: www.GamblingAndTheLaw.com

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
("NGC") 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 "Children 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 "anti'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 "will 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 "based 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 "G" and similar ratings.
    Exceptions are allowed where "the theme is attractive to adults because of
its nostalgic appeal." The regulators also gave themselves the power to
"restrict the time, place and manner in which an approved gaming device may
be displayed." And they grandfathered-in "any 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.