Gaming cuts seen bringing layoffs

Gaming Control Board Chairman Dennis Neilander has told the governor's office that a planned 14 percent reduction in the panel's annual budget could lead to gaming enforcement agent layoffs and other staff reductions, decreasing the agency's effectiveness in policing the state's largest industry.

In a letter last month to Budget Director Andrew Clinger, Neilander asked that the control board be exempt from further budget cuts planned for the 2010-11 state budget cycle. Neilander sent a copy of the letter to Josh Hicks, Gov. Jim Gibbons' chief of staff.

Gibbons has asked state agencies to provide his budget office with a snapshot of what a 14 percent funding reduction would mean.

Hicks said the state agencies are providing the information for planning. The proposed budget won't be final until the end of the year.

"We want to know how agencies will be impacted," Hicks said. "We want to see what revenues look like by the end of the year. Nothing is set."

Neilander was fearful that if there is even a perception of diminished state regulation, the federal government might try to step into the picture. He said the control board has already enacted the mandatory 8 percent budget cuts implemented by the governor's office this year by eliminating unfilled staff positions.

Neilander said the vast majority of the control board's funding from the state goes toward payroll. Three of the control board's divisions -- technology, investigations and corporate securities -- are self-funded through fees paid by the gaming industry. However, the budget cuts would affect the control board's audit, enforcement, tax and license and administrative divisions.

"The cut may only be accomplished by drastically reducing staff in those four divisions," Neilander wrote.

In an interview, he said the budget reductions would mean 45 gaming agents would be laid off along with seven clerical positions. The control board operates with 462 full- and part-time positions.

"We don't want to go backward," Neilander said. "We're the premier gaming regulatory agency in the world. Other jurisdictions look to us. We've operated on a lean budget, and with respect to gaming regulation, we need to remain in our current position."

In his letter, Neilander said the budget reduction would mean fewer auditors, enforcement agents and support staff.

"The board simply will not be able to regulate Nevada gaming to the extent to which has been customary and has served the state and its highly revered industry well," Neilander wrote. "Casinos will be audited less frequently, there will be diminished state presence in gaming properties to perform regulatory and law enforcement functions, three will be less scrutiny on tax and fee collections, and training and recruitment will be lacking."

Neilander said the control board operates with the same number of enforcement agents today as it did in 1991. Any further cuts in staff would be hard to absorb.

"In short, Nevada's well-earned reputation would be tarnished, at least, and the industry will suffer a travesty due to inadequate regulation, at worst," Neilander wrote.

Hicks said the budgeting assessment process would last through the end of the year.

"The integrity of the gaming industry and the control board is important to the governor," Hicks said.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.