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Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

The bill would amend the Gaming Control Act 1) to require that the Gaming Control Board (GCB) conduct annual audits of financial reports submitted by licensees by comparison with data submitted to the board through the central system to ensure accuracy of the data reported by licensees, 2) to prohibit the GCB from requiring that a licensee have an annual audit conducted by an independent auditor or certified public accountant if it provides accurate accounts that conform to audits of the financial records of the licensee conducted by the GCB, 3) prohibits the GCB from requiring that a licensee have an independent audit conducted by an auditor or certified public accountant as a requirement for renewal of his license, and 4) requiring nonprofit gaming operator licensees to distribute at least 60 percent (rather than 88 percent under current statute) of the net take after payment of the gaming tax and any income taxes, for charitable or educational purposes.

Significant Issues

This bill appears to be designed to address concerns raised by veterans and fraternal organizations that annual audit requirements under current statute are onerous and that it is difficult to pay for the costs of operating gaming machines and to disperse 88 percent of net take after payment of taxes to charitable or educational purposes.

FISCAL IMPLICATIONS

The bill would place additional administrative burdens on the Gaming Control Board which might require additional staff and funding.

TECHNICAL ISSUES

As drafted, the bill would require the GCB to audit all licensees through data in the central system. Only gaming operator licensees are connected to the central system. Licensees for manufacturers and distributors are not connected to the central monitoring system, so it would not be possible for the GCB to audit these licensees through this procedure.

If adopted, this bill might conflict with Section 60-2E-19 NMSA 1978 which would continue to require that company applicants provide to the GCB: "balance sheets and profit and loss statements for at least the three preceding fiscal years, or, if the company has not been in business for a period of three years, balance sheets and profit and loss statements from the time of its commencement of business operations and projected for three years from the time of its commencement of business operations. All balance sheets and profit and loss statements shall be certified by independent certified public accountants." It is not clear if this bill intends to eliminate requirements for independent financial audits for all licensees or if it is intended to apply more narrowly to gaming operator licensees.

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