The Massachusetts Gaming Commission recently announced that it had collected more than $3.7 million in 2021 as part of the state’s “jackpot intercept” program.
Under the program created by state legislation, Massachusetts’ three gaming licensees, partnering with the commission’s Investigations and Enforcement Bureau, check a database to determine if a jackpot winner owes back taxes to the state or child support to a former spouse.
Whenever someone wins a jackpot of more than $1,200 in slots or a table jackpot of $5,000 or that pays out at 300-to-1 odds, that person’s name and Social Security number has to be run through the Department of Revenue to see if they owe any back taxes or back child support.
Nineteen other states have similar programs. Nevada isn’t one of them.
No Nevada law just yet
Nevada hasn’t approved such a law yet, but it’s not for lack of trying. State lawmakers tried to develop one with legislation debated in March 2021.
Proponents of Assembly Bill 406 passed a section of the bill supporting the concept of intercepting jackpots to pay delinquent child support, but the details of how that would be done were left for consideration in the next legislative session in 2023.
Last year’s bill testimony indicated the technology of the system could be ready this year and that details of implementation could be debated when the Legislature convenes next January.
“The Nevada Child Support Enforcement Program has over 83,500 open child support cases,” said Cathy Kaplan, chief of the Child Support Enforcement Program for the Division of Welfare and Supportive Services, Department of Health and Human Services.
“Of those cases, there are over 68,000 obligors who are in arrears with their child support obligations,” she said. “Existing statute allows past-due support to be withheld when an obligor wins a prize or lottery. However, there are no current processes for licensed gaming establishments to identify delinquent obligors and withhold from their gambling winnings.”
Karen Cliffe, chief deputy district attorney of the Family Support Division of the Clark County district attorney’s office, cited Colorado casinos’ experience as a positive outcome of the institution of such legislation.
“For five years, Colorado casinos fought off the legislation,” Cliffe said.“They made their first collection the day it was implemented. That same year, they collected $500,000. To date, well over $4 million has been collected.”
She noted that the executive director of the Colorado Gaming Association initially opposed legislation for fear that the child support review conducted before payout would be troublesome. “However, their experience has been the opposite,” she said. “It has been a very smooth transition.”
Cliffe said the Nevada bill reviewed by the Assembly Judiciary Committee last year had two sections: one requiring the state’s Department of Health and Human Services to establish and maintain a secure registry for the purpose of withholding gaming winnings and the other amending Nevada Revised Statutes to include gaming winnings as funds that may be withheld for the support of a child.
Under the bill, “gaming winnings” are defined as winnings at a licensed gaming establishment that are required to be reported to the IRS on form W-2G.
But others say the size and complexity of Nevada’s gaming industry makes such a law more difficult to implement.
The Nevada Resort Association, representing 77 casino companies statewide, recognized the benefit of a child support jackpot intercept system but disagreed with the execution of the bill.
“Our concerns with AB406 as initially drafted were centered on details and logistics rather than the concept,” NRA President and CEO Virginia Valentine said. “Due to the size and complexity of Nevada’s gaming industry as compared to states with far fewer licensees, a reasonable first step would be for the state to develop a reliable and secure IT system or database and ensure it works as intended with adequate data privacy protections before mandating an untested system.”
Valentine said that after the system becomes operational, she recommends a pilot program to address any issues, such as appropriate controls and employee training, including who has access to the sensitive information and the impacts to licensees in terms of staffing and operations.
“This is a significant undertaking that must be done properly from the beginning,” she said.
Former Nevada Gaming Control Board Chairwoman Becky Harris, now a distinguished fellow in gaming and leadership at UNLV’s International Gaming Institute, said she is neither for nor against the Nevada legislation, but she pointed out some of the issues that lawmakers will face.
“We haven’t done a study to see who’s actually winning our jackpots,” said Harris, who also served two legislative sessions as a state senator. “We are an international destination. That’s not to say that in Massachusetts they don’t have international visitation, but you can’t even compare Massachusetts to Nevada because they have three licensees, and when you look across restricted and non-restricted (licenses in Nevada), we’re at almost 3,000.”
Harris also questioned whether casino properties would have to track child-support obligors from other states and which casinos would have to withhold jackpots in the case of progressive slot wins.
“It’s a whole different conversation when the question becomes who is going to be subject to this because we have progressive jackpots that go across properties,” she said. “Who is going to be responsible for making sure there’s compliance? Is it the property where the jackpot hit, or is it the responsibility of all the properties that contributed to the jackpot? I’m sure they can figure it out, but it seems to me that any legislation that deals with this is going to have to exempt international travelers and we’re probably going to have to exempt people from out of state because I don’t know how you require Nevada licensees to comply with knowing what all the child-support laws, guidelines and arrears are in 50 states, let alone all over the world.”
Another question: If jackpot intercepts are in place, could that produce a chilling effect on the local population’s willingness to play?
“I think it becomes a challenge because we do have a responsibility to make sure that the games are fair, and part of the fairness of those games is that when you win, you get paid,” Harris said.
Last year, Encore Boston Harbor, operated by Las Vegas-based Wynn Resorts Ltd., intercepted $2.2 million, Penn National Gaming’s Plainridge Park Casino captured $921,595 and MGM Resorts International’s MGM Springfield diverted $633,937 as part of Massachusetts’ jackpot interception program.
Bruce Band, deputy director of the Investigations and Enforcement Bureau, said 2021 was a record year for intercepting back tax and child support funds.
Are gamblers surprised when they find out they’re not going to collect the amount they thought they’d won?
“I think some of them are, some to the extent that they try to switch the jackpot to somebody else,” Band said. “It’s become more common knowledge now in casinos.”