Experts: Nevada’s lack of casino self-exclusion law par for state

Dana Gentry

(Nevada Current) Ray, an admitted compulsive gambler, says he was about to lose his marriage when he informed his Wynn Las Vegas casino host last year that he was done after 20 years of feeding the resort’s insatiable slot machines.

“We thanked him for taking good care of us and went home to California,” Ray says. A week later, according to Ray, his host called, offering free play amounting to 25% of his losses on his last trip, an amount far greater than the standard 3% offer Ray says he was accustomed to receiving.

“It was free money. I couldn’t turn it down. I had to make up for my losses,” he said, adding he promised his wife he’d stop playing after exhausting the free credit.

But like so many before him, Ray threw good money after bad, losing roughly $10,000 in free play and another $75,000 on top of that.

The scenario, according to experts, is legal and repeated regularly in Nevada – the state that boasts the most experience catering to casino and sports bettors, while enacting minimal efforts to protect them.

Unlike most of the more than 40 states that have some form (including riverboats and Native American casinos) of legal gambling, Nevada has no law allowing gamblers to exclude themselves from gambling in the state’s casinos. 

Instead, Nevada has a toothless self-limiting regulation that allows gamblers to opt out of an individual casino’s direct-marketing solicitations, and from receiving comps and credit, but not from gambling.

In problem gambling circles, it’s no surprise the state that’s been in the legal business the longest is far behind modern regulation.

“Nevada takes a traditional approach – ‘Leave your money here and take your problems back home with you,’” says Keith Whyte, executive director of the National Council on Problem Gambling. He says other states that experienced the effects of Nevada’s policy “determined they were going to try and do a little better when they brought casinos to their own jurisdictions.”

Responsible gaming initiatives vary from state to state but generally include some or all of the same components.

• Thirty-four jurisdictions require casino or sports betting operators to adopt self-exclusion programs allowing gamblers to exclude themselves from casinos or online sites. The length of exclusion varies and can be selected by the patron. Procedures for reversing the designation also vary by jurisdiction. Nevada has a self-exclusion regulation for web gamblers but not for casino patrons.
• A majority of legal gaming jurisdictions have a central self-exclusion registry. Caesars Entertainment has a self-exclusion registry shared by its casinos in the U.S.
• Thirty-one jurisdictions, including Nevada, require casinos to display signage and disclosures related to responsible gaming, including resources for counseling and toll-free numbers.
• Twenty-one jurisdictions mandate that land-based and online operators submit a responsible gaming plan addressing issues such as employee training and public awareness. Nevada has no such requirement,

“Any gaming licensee, once informed of a customer’s desire to stop gambling, should respect that immediately, even if only in the spirit of customer service,” says Alan Feldman, Distinguished Fellow in Responsible Gaming at UNLV’s International Gaming Institute and former MGM Resorts International public relations executive.

Ray, the compulsive slot player, says he was not offered the opportunity to self-limit his play.

“I would think that that should be part of the process, just from an ethical point of view,” says Ted Hartwell of the Nevada Council on Problem Gambling.

Ray, proficient in the language of compulsive betting, swears if not for the host’s offer of free play, his gambling days would have been over. A complaint he filed with the resort yielded no finding of wrongdoing, as did a complaint to the Gaming Control Board, according to emails provided to the Current.

“Most therapists would say, ‘yeah, the casino’s got some responsibility, but you’ve got individual responsibility, too, and relying on the casino to stop you from gambling is probably not the best step,” says Whyte.

“In Nevada, we’re proud of the fact that we had the first regulations around problem gambling and responsible gambling tools. We have long since fallen behind a lot of other states that have more robust regulations that offer patron protections and education,” says Hartwell of the Nevada Council on Problem Gambling,a state affiliate of the National Council. “A lot of us, both in the advocacy as well as in the recovery and treatment realm would love to see a true self-exclusion process.”

“There’s been pushback from the gaming industry, as you might imagine,” says Whyte, based on the notion that a one-size fits all regulation would be cumbersome to integrate among Nevada licensees of different sizes, from “small mom and pop operations and grocery stores, to large resort casinos. But I think it’s absolutely doable.”

Nevada, Whyte says, also needs a centralized system accessible to all licensees. “If I have a gambling problem at your establishment, I have a gambling problem at other establishments, as well.”

“It’s outrageous,” an individual with close ties to the gaming industry who asked not to be named said of Nevada’s lack of a self-exclusion law. “If you believe in responsible gambling, it’s a customer service initiative. You do what’s best for the customer, not what’s best for you.”

“Proscriptive regulations might have some unintended consequences, so I’d lean more toward dealing with this within the context of company policies and practices,” says Feldman.

Problem gambling fund never flush

Lobbying for a self-exclusion law requires money the Nevada Council doesn’t have. In fact, it’s struggling to secure a dedicated source of state funding since the 2019 elimination of a quarterly $2 fee per machine approved in 2005.

“By the time that we got that formula decoupled, we had seen a more than 15% decrease in the actual number of machines on the floor,” says Hartwell. “So when you calculate both cost of living and inflation along with the reduction in real dollars, it was a significant hit.”

The Council’s funding shrank from $1.7 million in 2008 to approximately $1.3 million in 2017. That year, the Nevada Governor’s Advisory Committee on Problem Gambling failed to gain support for its proposal to provide minimum funding of $1 for each of the state’s 3 million residents and an annual cost of living increase.

A 2019 legislative effort eliminated the $2 quarterly fee but failed to generate support for a proposal to replace it with an amount equal to .6 percent of the gross gaming tax. The gross gaming tax is paid by resorts but not by restricted licensees (those with 15 or less machines,) such as taverns, convenience stores, and slot bars such as Dotty’s.

In 2021, following the worst part of the pandemic, the Legislature slashed  problem gambling funding to about $1.2 million a year, resulting in program cuts.

By comparison, public funding for problem gambling by the states increased 28% from 2016 to 2021, from $73 million to $94 million, according to the  New York Times and a report originally prepared by the National Association of Administrators for Problem Gambling Services in the U.S.

Of the 42 states with investments in problem gambling services, government funding allocations range from a low of less than one half of one cent in Colorado, which generated $1.4 billion in gambling revenue in 2022, to a high of $1.66 per capita in Oregon, where gambling revenue reached $49.5 million last year, according to the Times.

The National Council on Problem Gambling recommends states invest in problem gambling services in proportion to the size of their gaming industry.

Nevada spent $.40 per capita on problem gambling treatment and prevention last year. Gambling generated $14.8 billion in revenue in 2022—a record, according to the Nevada Gaming Control Board, and up 10.5% from 2021.

“Nevada’s leadership in the gambling industry is increasingly under pressure from other states,” says Whyte of the National Council. “In the gaming capital of the United States, the Nevada Council on Problem Gambling should be the most well-funded organization – given how much revenue is generated by the state, how important gaming is to the economy, and how most of the major gambling companies are headquartered right there.”

“There need to be more rigorous procedures and policies put in place to safeguard the health and welfare of consumers, which I do think is vital to the success of the modern gambling industry,” says Whyte, adding Nevada’s approach is “pretty minimal as policy and out of date with most modern gambling regulation.”

Treatment and regulation

Self-exclusion programs alone are not effective in encouraging responsible gambling, say experts.

“Before you sign up for self-exclusion is when you should see a therapist,” says Whyte. “If you’re suffering from a gambling disorder, you might not be in the position to make an informed choice about whether you should or should not self-exclude or for how long.”

Gaming regulators “take breaches very seriously” in states with self-exclusion laws, according to Whyte. Most self-excluded gamblers are not detected when a player is losing, but rather when they win an amount that requires them to present identification for tax purposes.

“So it breeds a horribly cynical view among most gamblers who say ‘look, I told you I had a problem. I excluded but I walked back into this casino, sat down and lost another $10,000. You didn’t stop me until I won,’” says Whyte. “It’s a great concept, but it should be seen as more of a therapeutic intervention rather than security and enforcement.”

In states that are well-regulated, self-excluding gamblers are required to complete the duration of their chosen exclusion period, Whyte says, before being allowed to play.

Whyte says technology is in the offing that will allow states to share access to self-exclusion data.

Caesars Entertainment, viewed as a leader in responsible gambling, has had an internal self-exclusion registry shared by its U.S. properties for two decades, says Jan Jones Blackhurst, a member of the company’s board of directors.

“We’re the only gaming company where it’s integrated through the customer management service,” says Jones Blackhurst. “Customers can pick one year, five years, or permanent. They can choose only to be excluded from a local casino but still gamble when they come to Las Vegas.”

Jones Blackhurst says in states with self-exclusion laws, winnings of excluded gamblers who breach the system are donated to charity. But given Nevada’s lack of a regulation, gamblers who breach the company policy within the state must be allowed to keep their winnings.

The national annual social cost of problem gambling is $7 billion, according to the National Council, which says that unlike other addictions and mental health disorders, the federal government spends nothing on problem gambling.

“Part of the problem at the federal level is the shame and stigma around problem gambling, which led to it being specifically excluded from the Americans with Disabilities Act,” says Whyte.

Additionally, gambling has been taxed and regulated at the state level, he says, with no need for federal involvement.

“However, there are two gambling-specific federal taxes: the withholding tax on jackpots and the excise tax on every sports bet that combined bring in approximately $8 billion to the federal government. So there is ample justification for federal support,” he says.

A Nevada law passed in 1991 prohibits gamblers from using a mental disorder as a reason not to pay a gambling debt.