What is the new ordinance?
The city of Ely, Nevada, has recently passed a new ordinance that allows restaurant-bars to operate up to 40 slot machines, regardless of the number of hotel rooms they have. Previously, only businesses with at least 50 hotel rooms were permitted to operate 16 or more slot machines. The new ordinance, which went into effect on Jan. 11, 2024, also lowers the hotel room requirement for businesses that want to have more than 40 slot machines from 50 to 30.
The city council said the goal of the new ordinance was to clarify some ambiguities in the old law, which was passed in 2017, and to open up more business opportunities for the city. Ely is a small town in eastern Nevada, with a population of about 4,000 people, and is known for its outdoor activities and tourist attractions, such as the Great Basin National Park and the Nevada Northern Railway Museum.
Why are some people opposed to it?
However, not everyone is happy with the new ordinance. Some hotel owners and tourism officials have expressed their concerns that the new ordinance undermines the city’s hotel industry and its long-term development. They argue that:
- People visit Ely because of its natural assets, not because of its slot machines. They say that hotels provide the necessary lodging for tourists who come to enjoy the city’s outdoor activities and other attractions, and that slot machines are a supplementary source of income for hotels, not their main attraction.
- The new ordinance gives an unfair advantage to restaurant-bars over hotels. They say that restaurant-bars can now offer more slot machines to their customers, without having to invest in hotel rooms or other amenities, and that this will divert players from hotels, making them less viable and profitable.
- The city needs more quality lodging, not more slot machines. They say that the city is limited by its lack of hotel rooms, and that the new ordinance does not encourage new hotel development or improvement. They say that the city should focus on enhancing its quality of life and its natural assets, rather than on expanding its slot machine market.
What are the potential impacts of the new ordinance?
The new ordinance may have some positive and negative impacts on the city and its stakeholders. Some of the possible impacts are:
- More revenue for the city and some businesses. The new ordinance may generate more tax revenue for the city, as well as more income for some restaurant-bars and slot machine operators, who can now offer more gaming options to their customers.
- More competition and diversity in the gaming market. The new ordinance may create more competition and diversity in the city’s gaming market, as more businesses can now enter or expand their slot machine operations, and customers can have more choices and convenience in where and how they play.
- More challenges and risks for the hotel industry and tourism. The new ordinance may pose more challenges and risks for the hotel industry and tourism, as hotels may lose some of their customers and revenue to restaurant-bars, and the city may lose some of its appeal and identity as a natural and cultural destination.
How will the new ordinance be implemented and regulated?
The new ordinance will be implemented and regulated by the city and the Nevada Gaming Control Board, which oversees the state’s gaming industry. The city and the board have issued some guidance and requirements for the businesses that want to operate slot machines under the new ordinance, such as:
- Businesses must obtain approval from the board before changing the placement of slot machines. Businesses that want to relocate or add slot machines must submit a request to the board, and obtain its approval, before making any changes. The board will review the request and ensure that it complies with the state and local laws and regulations, as well as the board’s health and safety policies for resumption of gaming operations.
- Businesses must comply with all the provisions of the Gaming Control Act, the Nevada Gaming Commission Regulations, and any local ordinances. Businesses that operate slot machines must comply with all the applicable laws and regulations that govern the gaming industry, such as licensing, taxation, reporting, auditing, testing, and inspection. They must also comply with any local ordinances that may affect their operations, such as zoning, building, fire, and health codes.
- Businesses must ensure that slot machines embedded in a bar top remain unavailable for play. Businesses that have slot machines embedded in a bar top, such as video poker machines, must ensure that they are turned off and inaccessible for play, as per the governor’s directive 27, which closed some bars due to the COVID-19 pandemic. However, businesses can place stand-alone slot machines temporarily next to a bar top, or make slot machines in buddy bars available for play, as long as they follow the board’s guidance and approval process.
