Nevada Gaming Commission Discussion on Internet Gambling Rules
The Nevada Gaming Commission heard testimony in August about regulations which flesh out a piece of legislation, passed in '97, concerning the extension of phone wagering to the computer. Much discussion ensued about the Internet as "communications medium" versus "a medium of communication." If you're looking for the finer points of policy-making in the United States leading gambling jurisdiction, this will shed a little light on the matter.
CHAIRMAN CURRAN: Thank you. Let's move to the category of wagering communications then. Mr. Gale (Editor's Note: Mr. Gale is the chief auditor for the Nevada Gaming Control Board).
MR. GALE: To be brief on this, I think most of the changes in this section of the draft are very pro-industry in nature. As I talked about at the July 23rd Commission meeting, telephone wagering in our books has been legal in the state for many years, as long as the telephone calls originate within the State of Nevada. Bettors can go to one of the race or sports books, open up a betting account, and as long as they call from within the state, they can place wagers with our books. And what we were attempting to do with these changes is to say that there are more means available to the bettors nowadays to place wagers than just the telephone.
If someone is at their home and if they get on their personal computer and if they dial up a computer at one of the sports books, they should be allowed to make a bet with that sports book's computer just as they do at the telephone today, again as long as the phone call and the wagering communication originates from within the State of Nevada. So what these changes do, it allows for other types of betting to take place other than through the use of a telephone or having to make a bet in person. Now the one thing that I had discussed at the previous Commission meeting, though, is there is a provision in 22.010, I think it is page 1, the definition of Internet in 22.010, paragraph 6, and also communications medium. At the very last sentence there in paragraph 5 on page 8 it says, "The term does not include the Internet."
Generally through the definition process, what we're saying is you can make a bet by using a communications medium, which includes telephones and personal computers, telephone lines, et cetera. However, if you make a bet, you cannot make a bet to a book's computer through the use of the Worldwide Web and the Internet.
And what I'd like to do on this one, if I could, is defer to Mr. Wilson. He researched the Nevada Revised Statutes that were adopted during the 1997 Legislature that talks about making criminal certain types of wagering activity that Mr. Ledermann alluded to. Maybe he can outline for us what the laws say and why it is that the Internet should not be subject that can be used in our books. Mr. Wilson.
MR. WILSON: Thank you, Chief Gale.
Mr. Chairman, I could sit here and just discuss it with you, but with your permission, I would like to have a short handout that I would like to provide to you.
CHAIRMAN CURRAN: Mr. Wilson, we're having a hard time hearing you down here.
MR. WILSON: Would you like me to come to the podium?
CHAIRMAN CURRAN: Maybe if you would come to that podium, it would be better.
MR. WILSON: As I indicated, I have a handout as opposed to just standing up here and discussing it with you. I would actually like to go through that legislation so that you wouldn't be just hearing my words. You could actually read the legislation and come to your own conclusions concerning this issue. Would that be all right?
CHAIRMAN CURRAN: Please. Before you get started, let me just ask the audience first. How many people intend to testify in this category?
MR. WILSON: May not be needed. I don't know.
CHAIRMAN CURRAN: There is one person has indicated a desire to be heard. So go ahead.
MR. WILSON: What you have in front of you on the first page are four statutes. These are 465.091, 92, 93 and 94. These statutes are the entire enactment by the 1997 Legislature concerning Internet gambling. And with your permission, I'd like to read some of them and paraphrase others. If you would be kind enough to read along with me and allow you to draw your own conclusions as to whether the Nevada Legislature in fact specifically allowed Internet gaming or not.
465.091 is a definition of medium of communication, and it provides basically that "As used in NRS 465.091 to 465.092 inclusive, unless the context otherwise requires, medium of communication includes but is not limited to mail, telephone, television, telegraph, facsimile, cable wire, the Internet, or any other similar medium," From that one statute what can we glean from that? I think there are two different things we can come away from this statue.
The first is by its very own terms it says as used in NRS 465.091 to 465.094. as such, this definition, the discussion of the Internet only applies to these four statutes. It has no other application or doesn't apply anywhere else in Title 41 of NRS. I think what you can glean from this particular state, it's in Chapter 465 of NRS.
Now as you know, as Title 41 is made up of Chapter 462, 3, 4, 5, so forth, 466, 463 is what we know as the Gaming Control Act. That is the legislation that actually brought this Commission into existence, the Gaming Control Board into existence, It tells you how to provide licensing, what regulations to apply, how to regulate the gaming industry. 464 talks about pari-mutuel wager. 465 are the criminal statutes that apply mostly for criminal prosecutors. These are people that deal with the past posting, slug, cheating at gambling, and this particular statute, this scheme of statues is in 465.
The Legislature placed it there because these are criminal activities. It has nothing to do with your regular regulation of the industry I think that's what can be gleaned first in that particular definition. Going on, 465.092, and it is sort of complicated, so to paraphrase, it basically prohibits the reception as opposed to the receipt of a wager by anyone in or outside the State of Nevada from a person physically present in Nevada.
Now going on with 465.093, it prohibits the placing as opposed to the reception of wagers with a person in Nevada from within Nevada or outside of Nevada.
Now going on to 465.094, this is the exemption provision provided by the Legislature which indicates the following. If you do certain acts that are going to have criminal liability that is going to attach to them, and those acts are set forth in .092 and .093, now.094 says if you do those acts in a specific way, such as if you bet for yourself, you bet for another without consideration, and you bet with a Nevada licensee actually, and as I have underlined, I have taken the opportunity to underline this portion, I think it is extremely relevant here, and otherwise complies with all other applicable laws and regulations concerning wagering, if you comply with those four elements, then the acts that would otherwise be criminal under .092 and .093 will not be criminally liable.
The important I think issue to be gleaned from .094 is the highlighted portion. It's a specific statement by the Legislature, in my opinion, that they expect that there is going to be other statutes and other regulations that are going to be affecting these issues. It is a statement by them that there is in fact going to be regulation adopted by commissions such as yourself, because as those Commissioners that have been in the Legislature know, the Legislature does not adopt regulations. So it is a statement as underlined there by the Legislature that in fact there's going to be other laws. That's exactly what we're doing in Regulation 22. What I'm proposing is that you have the ability to decide whether the Internet should be or should not be used. And the discussion that the Nevada Legislature has actually presented the law that makes this legal through this enactment of these four statutes I think is incorrect.
Now would you please bear with me and turn the page. What I have provided you is a portion of the legislative history of SB 318. Now SB 318 was the statutory underpinnings for the four enactments under 465 that we just went over. You will see that these are minutes of the Assembly Committee on Judiciary July 2nd, 1997. The first portion of the highlighted there is Brian Sandoval, obviously, that is Commissioner Sandoval and he was in the Legislature at the time, and hopefully maybe you will be able to provide us some guidance concerning this.
If you would please turn the page to the next page number 2. You will notice that I have also highlighted the names of Mr. Robert Faiss, representing the Nevada Resort Association. Mr. Faiss is in the audience today. Also Mr. Kevin Doty representing the Nevada Resort Association.
Now the reason that I have highlighted those names will become evident in just a moment. Right below you will see where I have highlighted this statement. "Senator Maurice Washington, Washoe County Senatorial District 2, as primary sponsor of SB 318, stated the bill dealt with gaming provisions that were proposed by the Nevada Resort Association." So SB.
CHAIRMAN CURRAN: Mr. Wilson, as long as we're going through this and we're talking about Mr. Faiss and all and his testimony is highlighted, do you have a copy we can provide him so he can see?
MR. WILSON: Yes, I have made extra copies for anybody in the audience who might be interested.
CHAIRMAN CURRAN: Do you have a copy already, Mr. Faiss? Did you give copies of this to Mr. Gale and Mr. DuCharme?
MR. WILSON: Yes, they have copies of the same package that I gave you. Now obviously, the testimony, what I'm getting at here is the testimony of Mr. Faiss and Mr. Doty - I believe I am pronouncing that correct - would be extremely relevant to the issues here today. If you please turn the page to page 3 of that report which is the next page.
CHAIRMAN CURRAN: So what you have bate stamped here as 4878?
MR. WILSON: Yes. The next page would be4878. The third paragraph from the bottom is testimony by Mr. Faiss. It says -- well, it is actually paraphrasing. "Bob Faiss, attorney at law, Lionel, Sawyer & Collins, appeared with Ellen Whittemore and Kevin Doty, also of Lionel, Sawyer & Collins, as counsel for the Nevada Resort Association. He noted the president of the NRA, Richard Bunker, was also present. He stated with the exception of section 3, SB 318 consisted of provisions proposed by NRA to deal with a myriad of matters important to the gaming industry and important to the Gaming Control Board."
Please turn to the next page. Highlighted for your reference is a statement by Mr. Doty. "Mr. Doty said sections 10 through 13 of the bill" -- now let me regress. Those are the specific actions we just talked about in 465.091 through .094. "10 through 13 of the bill involve wagering on the Internet. Section 10 defined medium of communication to include the Internet. Section 11 prohibited the reception of a wager by anyone from a person physically present in the State of Nevada. Section 12 prohibited the placing of wagers with a person located in the state. Section 13 provided the exemptions for licensees. He said the above provisions did not authorize any Nevada licensees to engage in Internet wagering." I think that's an important provision right there. "And the authority afforded the Gaming Control Board to regulate illegal Internet wagering." Below that the next section: "Mr. Anderson asked if sections 10 to 13 changed in any way the relationship between an existing property and the Gaming Control Board," and "Mr. Doty replied not at all."
I would then ask you to turn to the very last page of this handout. At the bottom right it is 4885 is the reference. You will see highlighted a statement that "Vice-chair Buckley asked Mr. Faiss and Mr. Doty to return to the testifying table and asked if it was their understanding that SB 318 did not authorize state Internet gaming. Mr. Doty replied the intent was to provide the Board and the Commission with the ability to regulate those persons illegally operating on the Internet. The intent was not to provide anyone with the opportunity to do so until the Board and the Commission saw fit to allow that activity."
I submit to you, members of the Commission, that what in total this would indicate is that 318 was not a statement by the Legislature that Internet gaming is legal in this state. It is up to you to decide that. And so when you find the provision in Regulation 22 that it is not to be included in wagering communication, that is within your ambit, your authority to decide.
That's the end of my presentation. I'll be happy to entertain any questions or you can hear from the next person.
CHAIRMAN CURRAN: Okay. Are there questions of Mr. Wilson first? Anybody on the Commission or the Board?
COMMISSIONER MARSHALL: I have a question. Mike, explain to me, you're saying to me, to us that Internet gaming is not legal, not acceptable?
MR. WILSON: No, I'm not saying that.
COMMISSIONER MARSHALL: What are you saying, it is up to us to decide?
MR. WILSON: Yes, that is correct. Through correspondence provided by American Wagering as provided to you, they indicated that they were of the belief that these particular sections in 465.091 through .094 was a specific statement by the Legislature that allowed Internet gaming. And what I'm suggesting is the legislative history is contrary to that. It wasn't for that purpose at all.
It was to deal with messenger betting specifically. There was nothing in the legislative history, the way I read that, that makes it clear that the Legislature did not have the intent to specifically make Internet gaming legal.
And as a result of that, Chairman Bible and the Audit Division can through, and you through Regulation excise out of the definition of wagering communication, medium of communication, the use of the Internet for use in Nevada casinos.
COMMISSIONER MARSHALL: Thank you.
CHAIRMAN CURRAN: Before Mr. Salerno comes up, I just have to say that I was a little troubled at the very beginning that we have sort of a battle of definitions here. The statute says medium of communication, and the regulation says communication medium. They are both defined. I mean, they are intended to embrace two different things, but I mean, just the way the words are flipped around, it sounds like it is really the same thing.
MR. WILSON: I understand your concern, but I think that your first observation is the correct one. The medium, the communication -- the medium of communication 465.091 is used and meant to be used only in the criminal context of those four statutes. I think the introductory portions of that statute make it very clear. It says as used in NRS 465.091 through .094 inclusive. That's all it's meant to do.
Now on the other hand, what we're dealing with in Regulation 22 is the regulation of the industry by you and the Gaming Control Board. That is the race books and sports pools determining what type of wagering activity you are going to allow.
It's my belief that the Legislature did not address that in their definition of medium of communication, and you have the unfettered discretion in Regulation 22 as presented to you as to whether or not you want to embrace the Internet or not. The current regulation that is presented to you does not allow the Internet. I think Chairman Bible has some very good reasons that it is not to be allowed. As we all know, it is not susceptible to very stringent regulation right now. And I think that is the basic underpinnings of why it is not wanted to be included.
CHAIRMAN CURRAN: Let's step away from the substance of this completely for the moment. I guess the older I get, the more easily confused I am, but I think even as a youngster I would have had a hard time keeping straight in my head this is a communication medium and this is a medium of communication and what's the consequences and the implications of whichever one it is. I mean, just from the standpoint of draftsmanship, I'd like to make a way that this is easier where we don't have words that are just flipped around and by their very nature confusing.
MR. WILSON: May I address that for one more attempt at that. 465.091 through .094 are really addressed at just one thing and that is messenger betting. And it is a criminal activity. If you do the activity the way .092 and .093 present it, it is illegal, it is a crime, and criminal prosecutors prosecute the individuals for doing so. Take that on the one side, on the right.
On the left-hand side of this is your regulation of the industry under 463, the Gaming Control Act, and that's what these statutes are aimed at -- excuse me -- these regulations. Regulation 22 is the regulation of the race book and sports book industry under your regulatory control, not as criminal prosecutors, not as criminal acts, and because they happen to, just the statute, the definitions address somewhat of the same concepts, the purpose for them are completely different.
CHAIRMAN CURRAN: That may very well be, but I'm not -- to me, that's substance. I'm just talking pure ease of understanding what we're talking about. I mean, to me, if one phrase is a mackerel's tail and the other phrase is the tail of the mackerel, I have a hard time remembering which is which. I mean, let's call one the mackerel and one the flounder, I don't care what, but there has to be some way to straighten this out so that we're not forever scratching our head and saying where is the book, I got to look this up.
MR. WILSON: Chairman Curran, in point of fact, I don't believe you would ever look to the mackerel, which is 465. In the years that you have been here, I'm sure you have very seldom if ever actually gone to Chapter 465 for any direction in your regulation of the gaming industry. Your entire regulation of the gaming industry as an administrative agency flows out of Chapter 463 and 4 as a practical matter and the regulations adopted under that body of law. 465 is purely criminal acts that criminal prosecutors use. So my guess is, I think it's an educated one, that you would not ever have to turn to Chapter 465.091 for any purpose and there would be no confusion.
MR. GALE: If I could add a couple points. The definition of communications medium that's in this draft before you is something that was written not long before the law was written but was written before the law. The law came later even though this hasn't been publicly released until recently. Also the communications medium definition that we're putting in this draft relates to electronic wagering. That's what we're trying to regulate in this regulation. If you look at the medium of communication definition in the law, it also discusses mail, for instance. That's not something that this regulation was meant to address. This was meant to address someone making a wager through an electronic medium of communication. That's why we restricted our definition to that type of mechanisms and not anything that 465.091 was meant to regulate. So there is a difference.
Now maybe the problem is our regulation uses the term communications medium. Maybe because it is so close to the medium of communication definition in law, well, I guess what we could do is we could change the definition or the term in our Regulation 22.010 paragraph 5 if it would help allay some of the confusion.
CHAIRMAN CURRAN: I think it would simplify it. I don't have an alternative term in mind I can suggest. But I mean, I'm not talking about the substance of this at all. I'm just - I just think that it's going to be hard for now all of us who are sitting here with this in front of us to keep it straight, but this is going to regulate people who don't have the benefit of sitting here and who pick it up sometime much later and say, oh, geez, what is the difference here.
MR. GALE: I suppose we can look at changing the term. Does it have to be called communications medium? I believe that is something we can look at.
CHAIRMAN CURRAN: Enough said on the point. That's just my ideas. It would be easier for everybody if we could think of some other term.
MR. GALE: The only other thing I really want to add before you open it up for comments is the other main point that I think that's important to note is in Regulation 22.140 paragraph 2. We are including a requirement that the medium of communication or the communications medium that is used by the book to accept these electronic wagers is something, number one, that has to be approved by the Board, just like telephones currently have to be approved by the Board before they can be used by a book to accept wagers, and then in addition, because the technology is changing so rapidly, we felt it was important that there not be a one-time approval given by the Board for their communications medium. We felt it was important that there be an annual review of their wagering communications process and that the Board approve the process annually instead of a one-time approval. So that's why we added some words in here regarding that.
And again, the key is in order to get an approval from the Board, it's important that the books be able to demonstrate that if they use this communications medium, that they have steps and controls in place whereby that they can be assured that the bets that they are receiving through this communications medium are bets that are originating from within the State of Nevada.
We cannot allow someone from the state of Massachusetts to get on a personal computer, dial in through his modem into a sports book in the State of Nevada and place a bet through their PC. That is against the federal law. And it's also now against state law.
So it's important the books be able to demonstrate that wagering communication coming in through a PC, that that bet had to originate from within Nevada. That's something that the books have to demonstrate to us through this annual approval process. That's the only other point I really want to highlight in this section of the draft.
CHAIRMAN CURRAN: Before Mr. Salerno comes up, let's take a recess. We will start by the clock on the wall precisely at one o'clock. (Recess taken at 12:54 p.m.)
LAS VEGAS, NEVADA, WEDNESDAY, AUGUST 12, 1998, 1:01 P.M.
CHAIRMAN CURRAN: We'll call the meeting back to session. Mr. Salerno (Editor's Note: Vic Salerno is the CEO of American Wagering Inc.
MR. SALERNO: Mr. Chairman, I was at that meeting, too, and spoke my comments at the Legislature, and I didn't understand it that way.
I'll go back to what I told you at the last meeting. Communications is communications. And I think the real key to this is how we regulate, and if we can regulate it, whether it is by mail or telephone or by the Internet. It seems right now that the Internet is a big bad thing. It is really the greatest thing in the world, and to those of you who have been on it, you would understand that.
And since Nevada is a leader in sports wagering and we have an exclusive, and if we can show or we can monitor this, I don't see why we would put a regulation in that would prohibit us from doing it. And I think with proper controls, and with the Board looking at these and if this satisfies the Board, why should we right now regulate it out?
This is a terrific opportunity for our state. And I don't see, to be very honest with you, picking up a telephone -- a telephone is just a mini computer, it is a computer. And the Internet comes over computers, too. It is just the regulation. If we can regulate that, why shouldn't we use it? This is a tremendous opportunity for our state. I don't believe that even with the Internet law that's being proposed, that it is going to prohibit Internet wagering from legal jurisdiction to illegal jurisdiction.
COMMISSIONER WAGNER: Are you speaking now to the federal legislation?
MR. SALERNO: Both the federal and state.
COMMISSIONER WAGNER: Tell me, because I kind of lost track of what the federal legislation is at this point.
MR. SALERNO: The Kyle bill has passed on Senate side. Now it is going to the House side. The House bill is a little bit different than the Senate side. And they haven't voted on it yet. I don't know when it is going to come up.
COMMISSIONER WAGNER: It has not gone to a conference committee, or is that the next step?
MR. SALERNO: Yes, I believe so. I could be wrong.
COMMISSIONER MARSHALL: One thought that comes to me, if my ten-year-old granddaughter picked up the telephone and tried to make a bet, I think somebody might recognize that she might be under the proper age. But I don't think anybody would recognize if she did it on the Internet.
MR. SALERNO: If I told you I had equipment that could tell me, would that satisfy you then and take away your concerns?
COMMISSIONER MARSHALL: You can tell me how old the player was?
MR. SALERNO: I could tell you who the players is. Positive ID.
CHAIRMAN CURRAN: Through what, a code, you mean?
MR. SALERNO: No codes.
CHAIRMAN CURRAN: Well, go ahead and tell us.
MR. SALERNO: I mean, you have me in -
MEMBER DuCHARME: DNA.
MR. SALERNO: Through biometrics. There are several ways we can do it. I hate to in a public meeting tell you something of which our company is working on and we feel that can be done. But I can tell you we can positively guarantee that Arthur Marshall is the one that picked up that phone, or his granddaughter, Suzie Marshall. And that is her.
And what we're working on, we can also position where you are or know your location, so we can know whether you are in Nevada, anywhere in the world. And these are the things that are out there available.
It seems that we're stepping back. We should be on the cutting edge of this and regulate it and take the affirmative instead of saying, no, we don't want it, in our opinion. I really don't see any problems.
We have a lot of problems in this country. I don't know if this is going to be a thing. You granddaughter is not going to be able to go on and lose the house of whatever. If anything, the Internet gives you more control. When somebody walks up to a counter, we have no way of knowing whether they should be betting or losing. If we are going to get into morals of this.
But the Internet, there are such controls as when you start or when you sign up, we ask, or you can have programs that say, how much are you willing or do you feel that you can afford to lose? And we can set limits on that. And we set, if you say I want to lose a thousand dollars this month, we track it. When it hits that thousand dollars, you are cut off. And you go into what's called a cooling off period, mandatory 48 hours.
So it is not like somebody is steaming after they come in and lose a hand of blackjack or a baseball game and come up with the rent money right back at you. So there are things that are good about the Internet that gives us more control.
And all I'm asking is for you not to cut this out and it still goes to approval of the Board.
CHAIRMAN CURRAN: Let's go back to one of the first things you said, and maybe it goes beyond this a little bit, and maybe we're just --.maybe this is just talk now. But you talked about the fact that Nevada has sort of an exclusive right to this kind of betting. Isn't it something that we should be concerned about, see to it that we preserve that exclusive position, and if we do things that facilitate or make it more difficult to monitor and regulate, that the betting is in fact coming exclusively from within the state and in effect, there's the reality or appearance that we have thrown this open to people wherever they might be, that people might say if it exists everywhere, just let it exist everywhere, and wouldn't that jeopardize Nevada's sort of exclusivity hold here?
MR. SALERNO: Jeopardize it? I don't believe so. I mean, the way we're helping right now with the NCAA, fixed games, we're providing them lines and line changes. Somebody has to be a bookmaker that you can count on. Somebody that the NCAA, the NFL and everybody else can come to and say what is happening, is there any action that's wrong or improper. If we are not here, they have nowhere to go. So we provide that service.
CHAIRMAN CURRAN: I'm sure it would be somebody somewhere who will say, don't worry, we'll provide them a place to go.
MR. SALERNO: That's my whole point also is by continuing to regulate and monitoring people and everything we're doing in the sports business,' you are creating another problem. Whenever you enact the law or something, you have to look at both sides of it. We have been real fortunate here, I don't think we have a big problem with illegal bookmakers. But if we go and keep limiting things that we're doing, we're going to have a bigger problem with illegal bookmakers. These people aren't going to stop betting. They are going to go to other means. We are losing our market share. If you track our handle in the state, it's going down as far as wagering now. We're losing it to the Caribbean. Right now it's going every day.
So I just believe that it is an opportunity. I'm not sitting up here saying tomorrow we're going to start taking bets from Mexico where it is legal to bet or anyplace else. All I'm saying is don't shut that door right now. Why should we shut that door when it could be something?
We are here, this state, our main industry is gambling and/or gaming. This is important to Nevada as cows are to Wisconsin or tourism is to Florida. An I think that we have a means, I think we have a vehicle that we can be the ones to show how it is supposed to be done.
You have countries now that are going into sports wagering. They might not be big countries, they might be third World countries. The whole Dominica, they are going to start accepting bets as a government. It might seem funny. But is it that much different than our state lotteries? All the states are in the gambling business with the exception of maybe two.
But I'm not here really to discuss it. I just don't want to close the door, that our company feels that it should be left open and the proper control should be follow.
CHAIRMAN CURRAN: Questions for Mr. Salerno? Thank you. Any further testimony with regard to this category of discussion? Hearing none, let's go to.
COMMISSIONER GURROLA: Mr. Chairman.
CHAIRMAN CURRAN: Yes.
COMMISSIONER GURROLA: Would it be apropos perhaps maybe for Greg to address Internet, why it is so difficult to control, either now or maybe in the future or what the ramifications are?
BOARD CHAIRMAN BIBLE: I can talk about it briefly. You have already heard the explanation Mr. Wilson gave you in terms of the state of the law. At least in my opinion, the Legislature has not authorized Internet wagering. It in effect would be permissive and up to this Commission to allow it. I at least do not think it would be wise at this point to in effect allow it until the situation at the federal level is clarified.
I agree philosophically with a lot of the things that Mr. Salerno has testified to; I just don't think the timing is appropriate at this point to allow that kind of wagering until after clarification at the federal level as to how the federal government is going to proceed. Flip side of what he is suggesting that you do is you in effect legalese it.
I mean, you have your choice in this regulation to either include it or exclude it from the definition of medium of communication. You include it, you in effect have to utilize it at that wager that is being offered. The earlier concerns had to do with, well, how are the changes in the odds going to be noticed to the public?
And so what we have crafted is a provision in 22.060 paragraph 7 that says all odds and wagering propositions have to be posted. If you make -- first of all is that. Then secondly if you make any changes to those wagering propositions, then it's incumbent on the book then to notice the public of the change in odds or lines. They can do that through either changing their odds boards, their LED boards or chalk boards or marker boards, immediately reflecting changes in the proposition, or many times the books will use hard copy, what they call scratch sheets, put the propositions out for the public.
What we're saying on those types of wagering propositions is that if they want to change those wagering propositions and they can't immediately fix their hard copy scratch sheets, what they can do is they can announce the fact that odds or lines change is taking place on a proposition, and then at some point in the future, fairly soon hopefully, then they will then change their scratch sheets or follow through with a permanent change in their odds. Now the regulation is written in such manner where we're not saying how soon they have to change their odds boards or their scratch sheets. We're saying we're going to leave that up to them. But they need to tell us in their house rules when they are going to have those scratch sheets updated.
And then the Gaming Control Board through Regulation 22.150, which is also on the same page, page 10, also says that those house rules have to be provided to the Board, and then the Board will review the house rules, and we'll approve the house rules that address these types of provisions. That is basically what this section of the regulation amendments will do. Any questions on that?
CHAIRMAN CURRAN: Anybody in the public who wishes to be heard on this? Questions from the Commission? Okay. Let's go to the next category then, reserve requirements.