The 2007 IMGL Regulator of the Year: Dennis Neilander
By Sharon Harris

Nevada Gaming Control Board (GCB) Chair Dennis Neilander has been selected to receive the International Masters of Gaming Law’s (IMGL) 2007 Regulator of the Year award. The tribute honors the individual whose work continues the IMGL mission of “Advancing Gaming Law through Education.”

The honoree must have a career record of contributing to the gaming industry as a regulator. The individual must also be someone of high integrity who is recognized for noteworthy regulatory achievements in gaming, while providing a stable regulatory environment in his specific jurisdiction.

Dating back to his youth, Neilander’s entire career has centered on public service.

Developing His Public Interest

Early in his career, Neilander applied his legal training to public policy. Twenty years later, Neilander has parlayed this governmental expertise into a three-term tenure as the Nevada’s Gaming Control Board’s 14th chairman.

A Colorado native, Neilander graduated from the University of Northern Colorado. He earned a Natural Resources law degree from the University of Denver Law School in 1987, and immediately joined the National Conference of State Legislatures (NCSL).

“I intended to be an oil and gas lawyer, but the oil industry went bust in my third year of law school. Much of Denver’s economy was tied to oil, and the larger companies left the area. I joined the NCSL, a technical think-tank representing all 50 states,” Neilander said. He worked on environmental policy analysis, helping states comply with a federal mandate to remove asbestos in schools.

In the early ‘90s, Neilander and his wife explored public policy opportunities in western state capitals. Choosing Nevada, Neilander, his wife and their two children currently live near Carson City.

In 1990, Neilander was primary staff to both the Assembly and Senate Committees on Judiciary for the Nevada Legislature. Neilander related, “They wanted a lawyer with public policy experience. I stayed for three legislative sessions and five years.”

Neilander became chief of the board’s Corporate Securities Division in 1995. Democratic Governor Bob Miller appointed Neilander to the full-time three-member board in 1998. Republican governor Kenny Guinn named Neilander chair in January 2001, reappointing him in 2003.

Current Republican Governor Jim Gibbons named him to another four-year term this year.

“It is not a political appointment. Gaming is such an important fabric in Nevada that no one wants to inject politics into it. All three governors I’ve worked for held that view,” Neilander said. 

The Basics of the Job

The GCB enforces the Gaming Control Act and all regulations promulgated under it. “I see gaming as entertainment. It is not just a cash cow, and we must ensure its integrity to the public. The Nevada general fund receives 35 percent of the more than $1 billion collected annually in gaming tax revenues,” Neilander stated.

The Nevada legislature meets bi-annually. Two years in advance, Neilander must estimate and present budgetary and fiscal issues to the economic forum as part of Nevada’s General Fund Revenue forecasting process. He oversees the agency’s annual $36 million budget. Neilander claims an excellent history of accuracy — they projected within a fraction of a percent in 2006.

Monthly meetings alternate between Carson City and Las Vegas. “I occasionally drive because those several hours let me see what is actually happening in rural casino towns,” he says.

Michael Clayton, a fellow GCB member, believes Neilander’s true strength is his professional style. According to Clayton: “Dennis is the type of regulator whose systematic style continues to work for the collective goal. Regardless of a property’s size, he is steady and fair, both internally and externally. His thoughtful approach is appreciated by the entire industry.”

Neilander believes in consistency for all licensees. He states: “A casino’s size is irrelevant. It is the same agenda whether it is an old family business being passed down or a billion-dollar property. A small casino closing in one of Nevada’s 17 counties, which may be everything a family owns, has the same impact on a small community as a giant property closure in a larger area. It may profoundly affect both.”

The GCB hears 80 to 140 items during public hearings. Topics may include licensing applications, mergers and acquisitions, sales and casino-patron disputes.

The GCB prosecutes and initiates complaints, then forwards them to the Nevada Gaming Commission’s five part-time members for judgment. These may result in fines, suspensions or license revocations.

The GCB also drafts and refines regulatory language. Neilander presents them to the commission, which is the final licensing authority. He attends their monthly meeting to answer questions.

Commission Chair Peter Bernhard admires Neilander’s professionalism and knowledge, saying: “Chairman Neilander’s strengths include more than his vast experience and institutional knowledge of regulatory issues in Nevada. His impeccable integrity and understanding of how regulatory decisions affect Nevada and the world make him an invaluable resource to the industry and regulators. His wise counsel has assisted me and other commission members as we deal with critical policy matters presented by technology, worldwide gaming expansion, and the constant pressures to adapt to changing conditions in this dynamic industry.”

Public workshops help parties navigate new regulations. Interested parties may present testimony on particular issues. For example, they debated setting policy for high profile or high roller private gaming customers. The GCB established minimum betting and minimum net worth criteria to sustain competition.

Neilander also manages 475 statewide employees in Carson City, Reno, Las Vegas, Laughlin and Elko. Recruited from various sources, including law enforcement retirees and other financial institutions, these professionals work in one of seven specialized departments:

• Administration Administration supplies financial, personnel and other administrative services to staff the operating divisions and carry out the responsibilities of the board and the commission.
• Audit Auditing investigates cases involving financial records, advising the board of casinos’ financial performances and bankroll adequacies. Audit also enforces Nevada regulations that implement federally mandated cash transaction controls to prevent and eliminate money laundering.  
• Corporate Securities This division monitors, investigates and analyzes registered publicly traded corporations and their subsidiaries that participate in gaming within Nevada. Ownership or management changes, public offerings, involvement in foreign gaming, and recapitalization are evaluated to help determine licensing and approval recommendations and decisions.
• Enforcement The staff operates 24 hours daily from five statewide offices. Personnel conduct criminal and regulatory investigations, arbitrate disputes between patrons and licensees, collect information on criminal groups involved in gaming-related activities, recommend candidates for exclusions lists, and investigate work card applicants’ backgrounds. They also approve new games, surveillance systems, chips and tokens, charitable lotteries and Bingo. Enforcement cooperates with the Las Vegas police and such federal agencies as the FBI, U.S. Customs and Border Protection, Financial Crimes Enforcement Center, and the Drug Enforcement Administration. They investigate financial, employee and illegal sports wagering criminal activity.
• Investigations Investigators examine all gaming license and key employee applicants to determine viability, business integrity and suitability for licensure or approval.
• Tax and License This department collects, deposits, distributes and dedicates all gaming taxes, fees, penalties, interest and fines. It issues all licenses approved by the commission, and also monitors Indian Gaming in Nevada.
• Technology Professionals test — both in the laboratory and in the field — and recommend gaming devices for approval or denial. Technology also manages the board’s IT functions.

The GCB regulates mule racing at Winnemucca and live pari-mutuel horseracing, which are only legal at county fairs in Elko and Ely.

Nevada licenses 2,200 gaming operations. “Large” casinos gross more than $1 million in annual gaming revenues; non-restricted licensees have 15 or more slot machines and table games. Restricted venues operate 15 or fewer slot machines. Legislation 10 years ago limited this smaller group to grocery stores, convenience stores, drug stores and bars.

Future Big Issues

Gaming’s rapidly evolving technological changes remain a major challenge. Neilander has committed his staff to competently respond, while guaranteeing device accuracy and honesty. Neilander says, “Long after I’m gone, I want the Gaming Control Board to be proactive, not reactive.”

Fellow board member Randall Sayre claims that Neilander is fearless about exploring new technology. “Dennis has great peripheral vision and sees over the horizon. He is a great predictor of the future and is not afraid of technology,” he said.

The GCB’s testing lab employs a technical staff of network specialists, engineers and information technology professionals who address an estimated 300 modifications each month. They strive to examine the machines and offer recommendations to manufacturers within 30 days.

The GCB has totally restructured its technical division and its laboratory, doubling its staff to 18. Neilander credits much of the technology restructuring to Clayton. A new facility in Las Vegas is dedicated to device and table testing.

The GCB aims to streamline both internal and external gaming enforcement efficiency. “Once the devices are on the floor, we can maintain the public’s confidence in the game’s integrity by ensuring compliance. Increased competition does not change the law. Our obligation remains, and we don’t want licensees to cut corners to compete,” Neilander said.

As for online gaming, Nevada is currently limited to sports betting within the state. Interstate online gaming remains illegal for any U.S. jurisdiction.   Nevada passed legislation a few years ago to explore legalizing Internet gaming after studying two key issues. First, any technology must prevent minors from accessing online gaming sites. Second, safeguards preventing gambling in illegal Internet gaming jurisdictions would have to be established.

The GCB communicated with Attorney General John Ashcroft and the Department of Justice (DOJ) in Washington, D.C. The DOJ cited Internet gaming as a violation of the 1961 Wire Act, which prohibited any type of wire “facility” to transmit wagers. Consequently, Internet gaming introduction in Nevada has stalled.

Mobile, or remote gaming, and server-based gaming are other technologies under examination. Nevada has adopted regulations, and a few licensees are capable of operating within legal parameters.

“We limited mobile access to large casinos. All devices must disable outside their public spaces. We worry that minors will gain access to an adult’s phone in a hotel room,” Neilander said.

The largest expansion of the gaming industry in Nevada’s history has occurred during Neilander’s tenure. A global industry has presented myriad new issues for regulatory scrutiny. Financially, there has been an influx of private equity and an increasing complexity of financial structures. Neilander states that foreign investors from international corporations may create licensing questions.

The GCB has reformed work permits, modified laws to allow stock options to employees in gaming companies, regulated cashless wagering systems and revised the live entertainment tax.

Neilander says: “There are very few routine things about this job. It is very challenging but always intellectually stimulating. I use my legal training and logical thought processes to help me with transactions and financial structures.  Every day I bring my ‘A’ game to work. I can’t afford to risk bringing my ‘B’ game.”