Nevada Gambling Regulations

Nevada is virtually synonymous with gambling and offers a wide range of regulated betting activities, including games of chance, games of skill such as poker, sports and pari-mutuel wagering, fantasy sports, and bingo. The state is home to a flourishing gaming industry that reached a record high in 2021 when local gambling revenue hit $13.4 billion, surpassing its previous record from 2007.

The Silver State was not always the gambling mecca we know today. The state legislature enforced a blanket prohibition on these activities in 1910, only to lift it a couple of decades later as a way to cope with the economic hardships of the Great Depression. The first legal casinos opened shortly afterward, but the local gambling industry was initially plagued by organized crime and corruption.

Things have changed greatly since then, as Nevada now enforces some of the most stringent gambling regulations in the country. The sector accounts for a significant share of the state’s total tax revenue and is among the primary drivers of the local economy. While the land-based segment is the main revenue contributor, the state also offers legal forms of remote gambling, such as online poker and mobile sports betting.

That being said, lotteries have been illegal in Nevada since the mid-19th century, when an article of the state’s constitution outlawed them. Multiple attempts have been made over the years to reintroduce them, but to no avail. Local industry participants argue against lotteries because they might divert revenue from the casino resorts while creating very few jobs and tax dollars in the process.

Laws That Govern Gambling in Nevada

Gambling arrived in the Silver State during the nineteenth-century gold rush, when prospectors carried it into the region. The first attempts to legalize and regulate these activities came in 1864, but they proved largely fruitless. Local lawmakers decriminalized certain forms of wagering a few years later, only to declare them illegal again shortly after the turn of the twentieth century.

Assembly Bill 98

The Gaming Control Act of 1959

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Assembly Bill 98

Not until the Great Depression did the state finally reconcile with gambling, deciding to use it as a tool to revive its struggling economy. Nevada has legislator Phil Tobin and his Assembly Bill 98 to thank for this. Tobin’s proposal to legalize and license gambling was met with fierce opposition from the Public Morals Committee.

Despite the pushback, the bill passed the Nevada Assembly by a vote of 24 to 11 and later cleared the Senate by a margin of 13 to 3. Governor Fred Balzar signed it into law in March 1931, thereby bringing small-scale gambling activities out of back rooms and dark alleys.

Also known as the Wide Open Gambling Bill, the legislation made it illegal for any individual or corporation to offer games of chance in the state without first obtaining a license. It included a schedule of licensing fees and stipulated that only US nationals were eligible for gaming permits, but it did not itself regulate gambling.

Instead, local county authorities were responsible for issuing licenses and collecting the associated fees. Unfortunately, county governments were not very good when it came to enforcement. Their ineptitude prompted local lawmakers to instruct the Nevada Attorney General to persuade district attorneys to administer regulations.

Nevada’s lawmakers created the first state casino permit in the mid-1940s, imposing a 1% tax on gross gambling revenue exceeding $3,000. The Nevada Tax Commission handled taxation and permit issuance but possessed no other regulatory authority.

The Silver State’s gambling industry flourished thanks to the low tax rates and California’s crackdown on illicit casinos, which drove many operators to Nevada. This growth led to the establishment of the Nevada Gaming Control Board in 1955, which served as the investigative and enforcement branch of the Tax Commission.

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The Gaming Control Act of 1959

By the late 1950s, it was evident that the state’s regulatory framework desperately needed reform. Then-Governor Grant Sawyer approved the 1959 Gaming Control Act, legislation that still governs Nevada’s gambling industry today. The new law moved oversight of the gambling sector from the Tax Commission to the newly created Nevada Gaming Commission, while the pre-existing Gaming Control Board became an independent entity.

The 1959 law covers various legal forms of gambling, including casino games, off-course pari-mutuel betting, and sports pools. It provides a broad definition of gambling games, describing them as those that use cards, dice, mechanical, electromechanical, or electronic equipment.

Examples of games in this category include blackjack, faro, roulette, craps, klondike, poker, pai gow, keno, bingo, baccarat, and slot machines. It excludes card games that take place in private homes, provided the person organizing them does not profit from their operation. On-course horse racing is limited to small-scale events at local fairs.

Lotteries are largely illegal in the Silver State under Article 4 of the Nevada Constitution, which prohibits their operation along with the sale of lottery tickets. Exceptions exist only for charitable raffles conducted by non-profit organizations.

License Types and Licensing Requirements

The gambling legislation in Nevada recognizes two categories of operating licenses: restricted and non-restricted. State regulators can issue restricted permits to businesses that operate no more than fifteen slot machines and offer no other forms of gaming.

Gambling is not the primary source of revenue for these establishments, such as bars, gas stations, and taverns. The application process for restricted permits is less costly and less intrusive, although applicants must still undergo extensive criminal record checks.

Non-restricted licenses are granted to larger businesses that wish to operate more than fifteen slot machines on their premises, along with other products like pooled sports betting and table games. Such enterprises are subject to more rigorous investigative procedures. Their owners and senior management must also undergo extensive checks.

Application Process and Requirements

Board Investigation and Public Hearings

Gaming Enterprise Districts

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Application Process and Requirements

Floor personnel, such as dealers, undergo a brief registration process that requires paying a nominal fee and submitting a fingerprint card. Applicants who have committed felonies within the past five years are rejected. Individuals in more responsible positions are subject to a far more detailed investigation.

The application process is lengthy and cumbersome. Owners and key management members must submit separate applications for evaluation, as must shareholders who own more than 5% of privately held gambling companies. Filing a Multi-Jurisdictional Personal History Disclosure Form is mandatory when applying for non-restricted licenses.

The first part of this document, roughly forty pages, contains personal information about the applicants, including their education, marital status, residence, and employment history. The second part focuses on financial information such as the source of funds to be invested in the gambling venue, insolvency disclosures, and personnel salaries.

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Board Investigation and Public Hearings

The Gaming Control Board conducts the investigation of prospective licensees. After this lengthy procedure, a public hearing is held during which applicants may be approved, rejected, or asked to resubmit their documents for further review. If approved, the application is forwarded to the Nevada Gaming Commission (NGC) for evaluation, which has the final say on licensing matters.

Applications rejected by the Board are also sent to the Commission, but those candidates must secure unanimous approval from NGC members to obtain a license. Under the Gaming Control Act, licenses are issued only to persons and entities that meet the criteria for probity, good standing, and competence.

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Gaming Enterprise Districts

In 1997, the state’s legislators introduced amendments to the local gambling law that limited the development of future non-restricted casinos to counties with at least 700,000 residents. Clark County, where Las Vegas is located, is the only area that meets this requirement.

The idea behind these changes was to stimulate urban growth in regions with suitable infrastructure capable of supporting such intensive development. Consequently, newly established casinos in this county must be situated within the so-called gaming enterprise districts (GED).

Gambling venues that were not located in these zones when the amendments took effect are covered by a grandfather clause, allowing them to continue operating but without increasing the number of slot machines or gaming tables on their premises. Other than that, gambling permits issued by the regulatory bodies of Nevada have no expiration date. However, some licenses, such as those for gaming equipment manufacturing, require periodic renewal.

Legal Forms of Online Gambling in Nevada

Given the considerable size of Nevada’s gambling industry, some readers may be surprised that the Silver State lacks full-fledged remote gambling sites. Only online poker is available to local players thanks to the passage of Assembly Bill 258 in 2011. The first poker site launched in spring 2013.

Remote poker operators that want to enter the local market must meet several licensing requirements, including hosting their servers and database systems within state borders. Authorized remote poker operators must verify the identities of all registered players and ensure they meet the minimum legal age requirement. Registrants must also provide valid Social Security numbers (SSNs) and cannot open accounts if their names appear on the state list of excluded individuals.

There are no limits on the number of remote poker websites that can operate in the state. Players must be physically present in Nevada to join the online action. Nevada entered into a compact with Delaware in early 2014, allowing the two states to share poker liquidity. Beyond poker, Nevada residents also have access to mobile sports wagering.

Local gambling legislation contains a “bad actor” clause, which bars businesses from remote gambling operations in the state if they did not cease their services in the United States after the UIGEA (Unlawful Internet Gambling Enforcement Act) came into effect in 2006.

For those unfamiliar with this law, it prohibits offshore gaming operators from deliberately accepting payments from US-based players. Local banks and payment processing systems must block unauthorized financial transactions to such websites, which is why credit card payments to offshore casinos often fail to go through.

Gambling Regulatory Authorities in Nevada

Two authorities supervise the gambling industry in Nevada. The State Gaming Control Board administers the state’s gambling laws and regulations. It consists of a chairman and two board members, all of whom are appointed by the governor. The GCB comprises several divisions with distinct functions, including audit, law enforcement, technology, and tax and licensing arms.

The board conducts investigations of businesses that seek gaming licenses and makes recommendations to the Nevada Gaming Commission. The GCB also handles casino-related complaints and acts as a mediator in dispute resolution. Applications for charitable gaming events and raffles are filed with this entity as well.

The Nevada Gaming Commission was created in 1959 after the Gaming Control Act became law. The agency acts on recommendations from the GCB and has the final say on license applications. License approval, revocation, and suspension all fall within its remit. It adopts gaming regulations and has the authority to decide whether licensees should be sanctioned for violations. Headed by a governor-appointed chairman, the Commission has five members in total, including the chair.

Conclusion

Nevada was the first state with legal casino gaming in the country and, as such, has the most developed gambling industry nationwide. More than ninety years have passed since the Wide Open Gambling Bill, yet the local gaming sector continues to thrive, reporting record revenue of $13.4 billion in 2021.

Reno and Las Vegas, the state’s largest gambling hubs, attract millions of visitors each year and offer a diverse selection of regulated gambling products. Lotteries and full-scale online casinos remain the only unavailable forms of gambling here, but it is possible the Silver State’s legislature will change this in the future.