Nevada is pretty much synonymous with gambling and boasts a wide range of regulated betting activities, including games of chance, games of skill like poker, sports and pari-mutuel wagering, fantasy sports, and bingo. The state is home to a flourishing gaming industry that reached a historical high in 2021 when local gambling revenue hit a whopping $13.4 billion, breaking its previous record from 2007.
The Silver State was not always the gambling mecca we have come to know today. State legislature enforced a blanket prohibition on these activities in 1910 only to lift it a couple of decades later as a means of coping with the economic hardships of the Great Depression. The first legal casinos arrived shortly after but the local gambling industry was initially plagued by organized crime and corruption.
Things have changed greatly since then as Nevada currently enforces some of the most stringent gambling regulations in the country. The sector accounts for a decent share of the state’s total tax revenue and is among the primary drivers of the local economy. While the landbased segment is the main contributor revenue-wise, the state also has legal forms of remote gambling like 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 deflect revenue from the casino resorts, while creating very few jobs and tax money in the process.
Laws That Govern Gambling in Nevada
Gambling made its way to the Silver State during the gold rush in the nineteenth century when prospectors brought it to the area. The first attempts to legalize and regulate these activities came in 1864, but proved largely fruitless. Local lawmakers managed to decriminalize some forms of wagering several years later only to proclaim them illegal again shortly after the turn of the twentieth century.
License Types and Licensing Requirements
The gambling legislation in Nevada distinguishes between two types of operating licenses, restricted and non-restricted. State regulators can issue restricted permits to businesses that wish to operate no more than fifteen slot machines and do not offer any other forms of gaming.
Gambling is not the primary source of revenue for such establishments, with bars, gas stations, and taverns being some of the examples. The application process for restricted permits is less costly and intrusive, although the applicants must still undergo extensive criminal record checks.
Non-restricted licenses are granted to larger businesses that seek to operate more than fifteen slot machines on their premises, alongside other products like pooled sports betting and table games. Such enterprises are subject to more thorough investigative procedures. Their owners and senior management members must go through extensive checks.
Gambling Fees and Taxes
Gambling is the biggest source of tax revenue in Nevada, accounting for approximately one-third of the state’s General Fund. The monthly tax rates for non-restricted licenses are based on the gross gaming revenue of the licensees, or the difference between the overall amounts wagered and the payouts of winning patrons. There are currently three tax tiers based on the gross revenue generated by non-restricted gambling facilities.
2Tax Tiers for Non-Restricted Gaming Licensees
The tax for operators with gross revenue of up to $50,000 stands at 3.5%. Those who generate revenue between $50,000 and $134,000 are taxed at a rate of 4.5%. The final tier applies to revenue in excess of $134,000 where the percentage jumps to 6.75%. There were recent talks about the introduction of an additional tier with rates of 9.75% imposed on profits exceeding $250,000 but the measure has not come into effect yet.
Casinos must also contribute quarterly fees of $20 for each slot machine they have on their premises. Additionally, an excise tax of $250 per slot is levied every year. Annual fees on table games are also in place, but vary based on the number of games available on the casino floor.
Last but not least, some gambling venues in the Silver State are subject to the so-called live entertainment tax, abbreviated as LET. It applies to facilities that offer live entertainment and require visitors to pay for admission. Casino resorts that host dancing and acrobatic shows, live concerts, or other similar forms of entertainment in designated venues must contribute 9% of the revenue they collect from admission fees.
3Taxes on Players’ Winnings
Gamblers in Nevada themselves must also pay levies since their winnings are considered a source of income and are, therefore, subject to taxes. For example, slot and bingo players who earn payouts of at least $1,200 from a single wager must file Form W-2G and report their profits to the Internal Revenue Service. Patrons can anticipate a federal tax of around 30% on their gaming winnings. Debts incurred through gambling are enforceable in the Silver State.
Social Responsibility and Advertising Policies
Casino operators in Nevada can only offer their services to customers who are at least 21 years old. Those who violate the minimum legal age requirements face heavy fines or license revocation in the worst-case scenario. The minimum age applies to all gambling products, including sports betting pools, racebooks, and pari-mutuel wagers.
4No Minors on the Gaming Floor
Nevada’s legislation prohibits minors from loitering on the gaming floor and observing the betting action without participating. Thus, an underage person cannot stand by the blackjack table or next to a slot machine to watch a parent or a legal guardian play. Patrons who violate the rules usually receive a warning first and get escorted from the casino if they repeatedly fail to comply.
Persons below 21 cannot seek employment on the gaming floor under Section 463.350 of the Nevada Revised Statutes. The only exception to this rule is when their position involves handling currency in a count room. Key employees, owners, and directors are prohibited from placing wagers in the casinos they work for or own.
5Responsible Gaming and Problem Gambling Policies
Apart from underage gambling, Nevada operators must also address responsible gaming. All staff members who serve patrons at authorized casinos undergo exhaustive training that allows them to recognize the signs of compulsive gambling. The personnel must have the capacity to provide information about various problem gambling programs to players who exhibit the characteristic symptoms.
All licensed casinos give customers the option of limiting their access to credit, marketing materials, and check cashing. Patrons keen on slots cannot fund their play with credit cards. Additionally, a portion of the levies imposed on the operation of slot machines goes toward programs for addiction prevention and treatment.
A special account was established for this purpose after the passage of Senate Bill 357 back in 2005. A $2 levy is imposed on each slot machine licensed in the state to go toward the Revolving Account for the Prevention and Treatment of Problem Gambling.
6Gambling Advertising Policies
Licensed gambling operators can market themselves in the Silver State, but their advertising materials should not bring the local gambling industry into disrepute. Advertisements should be inoffensive, undeceptive, and in good taste. These requirements apply to both landbased and online gaming activities.
Legal Forms of Online Gambling in Nevada
Given the considerable size of Nevada’s gambling industry, some readers would perhaps find it shocking 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 the spring of 2013.
Remote poker operators who seek to penetrate the local market must meet several licensure requirements, including having their servers and database systems located within state borders. Authorized remote poker operators must verify the identities of all registered players and ensure they meet the minimum legal age requirements. Registrants must also provide valid Social Security Numbers (SSNs) and cannot set up accounts if their names are on the state list of excluded individuals.
There are no restrictions on the maximum number of remote poker websites 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, which allowed the two states to share poker liquidity. Other than poker, Nevada residents also have access to mobile sports wagering.
The local gambling legislation contains a “bad actor” clause, which excludes businesses from remote gambling operations in the state if they had not ceased their services in the US after UIGEA (Unlawful Internet Gambling Enforcement Act) came into effect in 2006.
For those unfamiliar with this legislation, it prohibits offshore gaming operators from deliberately accepting payments from US-based players. Local banks and payment processing systems must hinder 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 local gambling laws and regulations. It consists of a chairman and two board members all of whom are selected by the state governor. The GCB comprises several divisions with distinct functions, including audit, law enforcement, technology, and tax and license arms.
The body undertakes the investigations of businesses that seek to gain gaming licenses and makes recommendations to the Nevada Gaming Commission. The GCB additionally deals with casino-related complaints and acts as a mediator in dispute resolution. Applications for charitable gaming events and raffles are also filed with this entity.
The Nevada Gaming Commission came into existence in 1959 after the Gaming Control Act passed into law. The agency acts on recommendations from the GCB and has the final say on approved license applicants. License approval, revocation, and suspension all fall within its remit. It adopts gaming regulations and has the judicial capacity to decide whether licensees should be sanctioned upon transgression. Headed by a governor-approved chairman, the Commission has five members in total with the chair included.
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 gone by since the passage of the Wide Open Gambling Bill, but the local gaming sector continues to thrive, reporting all-time high 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 them a rich assortment of regulated gambling products. Lotteries and full-scale online casinos are the only unavailable forms of gambling here, but maybe the legislature of the Silver State will amend this in the future.