NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
|
SPONSOR: |
Lujan, B. |
DATE TYPED: |
|
HB |
899/aHBIC |
||
|
SHORT TITLE: |
Gaming Waiver of Manufacturer’s License |
SB |
|
||||
|
|
ANALYST: |
Gonzales |
|||||
REVENUE
|
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
|
FY03 |
FY04 |
|
|
|
|
|
(Minimal) |
|
Recurring |
General
Fund |
(Parenthesis ( ) Indicate Revenue Decreases)
LFC Files
Responses
Received From
Gaming
Control Board
SUMMARY
Synopsis
of HBIC Amendment
The House Business and Industry Committee
amendment authorize the Gaming Control Board to issue permanent waivers of the
requirement to obtain a manufacturer’s license for types of associated
equipment (page 2, lines 17-21). The
bill also provides that it is not unlawful to manufacture associated equipment
if the manufacturer first obtains and maintains a waiver of the requirement for
a manufacturer’s license (page 4, line 10-11).
The bill includes an emergency clause.
Synopsis
of Original Bill
House Bill 899 amends the Gaming Control
Act to:
·
authorize
the Gaming Control Board to issue permanent waivers of licensing requirements
for manufacturers of associated equipment or types of associated equipment;
·
provide
that it is not unlawful to manufacture any gaming device or associated
equipment if the manufacturer first obtains and maintains a waiver of the
requirement for a manufacturer’s license; and
·
allow a person to distribute gaming devices without
obtaining a distributor or manufacturer’s license if the person obtains and
maintains a waiver of the requirement for a manufacturer’s license.
Significant
Issues
The bill includes an emergency clause.
This bill would allow the manufacture of gaming
machines without a license, or allow a distributor or a manufacturer to
distribute gaming machines and associated equipment without a license. These actions are both contrary to other
provisions in the Gaming Control Act.
The Gaming Control Act currently authorizes the GCB to issues one-year
waivers of manufacturers’ licenses. A
permanent waiver would require additional monitoring by the GCB to prevent a
gaming device manufacturer from manufacturing all parts necessary for a gaming
machine in contravention of licensing requirements.
FISCAL IMPLICATIONS
Annual registration
fees are $100 and individual waiver fees are $25. Lost revenues due to issuance of permanent
waivers would be minimal.
ADMINISTRATIVE IMPLICATIONS
See significant issues
above.
OTHER SUBSTANTIVE ISSUES
The Gaming Control
Board notes the following potential issues with the provisions of this bill:
·
Section 2 of the bill permits a manufacturer of gaming
devices to obtain a waiver of the obligation to obtain a manufacturer’s
license. This may have been an
inadvertent error. Under the Gaming
Control Act, “gaming devices” include both gaming machines and associated
equipment. “Associated equipment” means
components or equipment used in connection with gaming activity.
Similarly, Section 3 of
the bill permits distribution of gaming devices without a license.
It appears that this
also is an inadvertent error arising out of a misunderstanding that
“gaming
devices” includes both gaming machines and associated equipment.
If the bill is enacted,
it arguably would allow an unlicensed manufacturer to manufacture
gaming machines for play in
to distribute gaming
machines or associated equipment to gaming operators as long as the
manufacturer or distributor
obtains a waiver. By doing so, the bill
goes well beyond the
current law, which allows a
manufacturer to manufacture (but not distribute) associated
equipment (but not gaming
machines) without a license if the manufacturer obtains a
waiver from the Board.
Waivers may be
acceptable for the manufacture of certain associated equipment because
the equipment will be
integrated into a gaming machine that must be manufactured by a
licensed manufacturer and must
be tested, approved, and licensed by the State.
Unless
amended, Section 2 will allow
the unlicensed, unregulated manufacture of gaming
machines and Section 3 will
allow the unlicensed, unregulated distribution of gaming
devices. That clearly is contrary to fundamental
regulatory principles requiring licensing
to ensure the honesty
and integrity of gaming, and it is inconsistent with other waiver
provisions in the Act that apply
to the manufacture of associated equipment only.
To address the issues
listed above, the GCB suggests the following amendments:
1. On page 2, lines 17-21: delete “a manufacturer of associated
equipment or”
2.
On page 4, lines 4-11 amend the language to read:
“60-2E-29. LICENSING OF MANUFACTURERS OF GAMING
DEVICES—EXCEPTION—DISPOSITION OF GAMING DEVICES.—
A. It
is unlawful for any person to operate, carry on, conduct or maintain any form
of manufacturing of any gaming [device] machine
or associated equipment for use or play in New Mexico or any form of
manufacturing of any gaming [device] machine
or associated equipment in New Mexico for use or play outside of New
Mexico without first obtaining and maintaining a manufacturer’s license or in the case of associated
equipment, a waiver, granted by the board, of the requirement for a
manufacturer’s license.
3.
On page 6, lines 18-20, delete the proposed amendment to Section 3 that
allows a person to distribute gaming machines and associated equipment without
a license.
JMG/njw:yr