How Do I Obtain a Gaming License To Own and Operate a Casino?

If I hit the lottery for, say, $2 billion (of course, minus taxes) and I want to open a small hotel-casino, is there any prerequisite to obtaining a gaming license? Can I walk in and have no history or issues and the Board OKs a gaming license? I’m sure it's not cheap to get a look over by the Board either!

We submitted this question to the Nevada Gaming Control Board, but received no response. So we turned to retired and respected gaming attorney Anthony Cabot and the floodgates opened. Here is his answer.

“There are no prerequisites to getting a Nevada gaming license. Anyone can apply, but only those who are suitable, have sufficient experience, and sufficient funds from a suitable source should even apply. A person must prove their good character, honesty, and integrity and absence of a significant criminal record and no material association with organized crime.

“Many point to the gaming license investigative process as the most trying episodes in their lives. They were unprepared for investigations so thorough that agents went to the extent of reviewing their emails and text messages. These investigations can last between six months and year and cost hundreds of thousands of dollars.

"The Investigation Division of the State Gaming Control Board conducts licensing investigations. An investigative team has a senior agent and varying numbers of agents, depending upon the complexity of the investigation. There are two types of agents, financial and background. Financial agents have an accounting background. Background agents have law-enforcement training and often are former law enforcement agents.

“The prospective license holder must complete an application. These forms elicit basic information about his character, criminal record, business activities, financial affairs and business associates. The forms are long, and require up to 50 hours to compile and verify the requested information. This includes complete financial statements, residences and employment for the past 20 years, police and litigation records, and names, addresses, and birth dates of the applicant's extended family.

“The real work begins after the application is filed. The scope and intensity of a Nevada gaming license investigation surprised even those who have undergone the highest security clearances by the federal government.

“Applicants must often explain and sometimes justify transactions or decisions made many years ago. If a prospective applicant has any transgressions in their pasts, Nevada's agents probably will uncover them.

“During the investigation, the applicant will receive ongoing requests for various documents. These may include unusual items like diaries, day calendars, emails, text messages and personal correspondence. Agents also routinely examine contents of safety deposit boxes and safes. Basically, anything in writing or digital form is fair game. So, applicants should be prepared for these document requests throughout the process.

“During the investigation, the applicant may not interact much with the background agents. They perform thorough interviews to assess the applicant’s character, going beyond a simple police record check. The agents also show interest in the applicant's business and personal connections, as well as their methods of conducting business. For instance, they review civil-court records to gather information about any civil litigation involving the applicant and its nature.

“The applicant is likely to have more frequent contact with the financial agents, as the production of financial documentation is a significant aspect of the investigation. The applicant will be required to provide various financial records, such as income tax returns, savings passbooks, bank statements, canceled checks, deposit slips, check registers, escrow documents related to real estate transactions, loan documents, telephone records and stock certificates or account statements.

“These documents are requested for several reasons. Firstly, they help determine the adequacy of the applicant's financial resources and the suitability of their funding sources, especially if they are involved in financing the gaming establishment. Secondly, the financial records often unveil the identities of the applicant's associates and reveal their financial arrangements. The agents also closely examine the applicant's sources of income and scrutinize records of payments. In some cases, the applicant may need to clarify the origin of bank deposits or the purpose of payments shown on canceled checks.

“The agents possess extensive powers, enabling them to conduct thorough investigations. They have the authority to inspect premises, access, inspect, and audit books or records, and interview witnesses, all without any liability to the applicant. To proceed with the investigation, the applicant is required to sign various releases that indemnify the agents and allow government agencies, banks, private corporations and others to disclose information directly to the agents.

“On occasion, the agents' inquiries to government agencies, such as the Internal Revenue Service, have led to separate investigations being initiated against the applicant. Moreover, the agents interview a wide range of individuals, including references, business associates, parties involved in litigation, friends, and others, to evaluate the applicant's character, activities, and associations.

“After their investigation, the agents prepare a written summary for the Board. The summary is not available to the applicant. It contains the results of the investigation, and delineates the areas of concern. The summary contains a synopsis of interviews, summaries of court and police records, and financial analysis. In some investigations, a summary can be over 200 pages. While these marks the end of the formal investigative process, the applicant must prove his suitability in open meetings before the Board and the Commission.”

We can also recommend our recent book, Joe's Dash. After stints in the Navy and Coast Guard, Joe Dorsey worked his way up the ranks of the San Diego Police Department to become a detective with the elite Robbery Unit. From there, he was recruited by the Nevada Gaming Control Board to become an agent in Las Vegas. Joe investigated the backgrounds of everyone from unscrupulous junket reps to notorious mobsters and this section of the book gives you a bird's-eye view of the kind of investigations gambling-license applicants could expect back in Joe's day -- and they're even more stringent today.

No part of this answer may be reproduced or utilized in any form or by any means, electronic or mechanical, without the written permission of the publisher.

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Bob Aug-20-2023

BREAKING NEWS

Las Vegas NV.   Hunter Biden purchases the Silver Nugget, Gaming License approved in a record 45 days!  (Satire)

O2bnVegas Aug-20-2023

Joe's Dash

This book is a good one, a page turner regardless of the level of one's involvement in the world of Vegas/gambling.  Nothing about how stupid you are if you don't strive for AP or if you play in a Strip casino; doesn't go there.  

A fun read.

Candy

Henry Aug-20-2023

Sounds fun

Amazing answer to the question. Quite a contrast from 60 years ago when Benny Binion's kids in their 20s could breeze through licensing for the sake of their un-licensed father to run the biz.

VegasVic Aug-20-2023

Unfair

Trump bankrupt's several casinos, cries that it's all rigged against him. (not satire)

Wild Bill Aug-20-2023

VegasVic

Jeez. Thanks for the reminder about how Donald Trump bankrupted three casinos and two casino holding companies, as I recall, in the 90s' and 2000s. He never went personally bankrupt, though, only his businesses, leaving the investors holding the whole bag. Whatever happened to the guy? Haven't heard about him in years.

Kevin Rough Aug-20-2023

When did it all change?

I am sure back in the 1940s, the process wasn't that cumbersome.  Very few people would have even had experience running a legal casino when casinos were legalized.  When Benny Binion's sons got a license to take over the Horseshoe, it apparently only took a few days.  The mob bosses who ran casinos into the early 80s obviously never got a serious background check.

lennylasvegas Aug-20-2023

MORE BREAKING NEWS

New York NY.  Agents of a foreign government fly two airplanes into The World Trade Center - killing over 3000 Americans. But then that same foreign government funnels over two BILLION (that's BILLION with a "B") dollars to the son-in-law of the previous president, tortures, slaughters, and dismembers a reporter, then funnels even more money into golf courses owned by the previous president, and everyone thinks this is totally hunky-dory. But these same people are totally tee-d off that the son of the current president MAY have received a five million (that's million with an "m") dollar payment simply because he's the son of the current president. Miraculously, there's lots of accusations, but no actual proof to support the allegations. Just like there's 60+ court cases, and many, many audits documenting that the 2020 election had no substantial issues of fraud, but the cries of "stolen election" continue - again with no proof provided by those making those claims. (Truth - NOT satire)

David Miller Aug-20-2023

Satire

New York NY.  Agents of a foreign government fly two airplanes into The World Trade Center - killing over 3000 Americans. But then that same foreign government funnels over two BILLION (that's BILLION with a "B") dollars to the son-in-law of the previous president, tortures, slaughters, and dismembers a reporter, then funnels even more money into golf courses owned by the previous president, and everyone thinks this is totally hunky-dory. But these same people are totally tee-d off that the son of the current president MAY have received a five million (that's million with an "m") dollar payment simply because he's the son of the current president. Miraculously, there's lots of accusations, but no actual proof to support the allegations. Just like there's 60+ court cases, and many, many audits documenting that the 2020 election had no substantial issues of fraud, but the cries of "stolen election" continue - again with no proof provided by those making those claims. (Satire - not Truth)

Jon Anderson Aug-20-2023

thorough investigation

ok, now turn your head and cough...

Tim Soldan Aug-20-2023

Bar license

How does this compare to getting the limited gaming license for a 15 machine bar? Do you have to get a license if a route company is operating the machines?

CLIFFORD Aug-20-2023

BACK TO THE QUESTION

If one of the most brilliant business minds this country has ever produced (Thump), can't make a buck in an eastern gambling center, what chance does the average Joe have?  If you have some spare bucks, why not try to buy Greenland.

[email protected] Aug-20-2023

Trump's misunderstood AC record.

1.  President Trump bought all his properties, while they were in bankruptcy.
2.  Most of Trump's properties would not have been completed, if not for him saving them from non-completion or bankruptcy.
3.  None of the original AC casino owners, made money in NJ, most failed.
4.  The list of AC failures is high and includes: Merv Griffin, Huge Hefner, Hilton, others...
5.  Steve Wynn was one of the few, who cashed out AC even.
6.  List of unopened AC casinos is massive.
7.  100% of original AC casinos failed, with only late entry Borgata being lone exception.
8.  Extensive political & union corruption in AC.
9.  Horrible regulatory environment, of NJ's casino segment.
10.  No industry other than gambling, small airport, poor climate in winter, etc...

Kevin Lewis Aug-20-2023

The vital element

First, obtain several barrels of politician grease (the green kind). All else follows from that.

Doc H Aug-20-2023

bankrupt casinos

Clifford, you need to research a bit more on the matter. Lots of casinos went bankrupt or closed-failed. [email protected] makes good points on some of the why's but the reality is, the gambling biz isn't the easy rake in the money all the time people think it is. Short of the fake artificial bump the last few years with the overreaction-useless COVID nonsense, gaming is a tough biz with lots of failures by lots of smart money. 

Few examples:

- MGM resorts unprofitable 7 of 8 years from 2008-15 
- SLS replaced Sahara in 2014 and lost money every year until 2017.
- Lucky Dragon Las Vegas went bankrupt after 15 months.
- Caesars went bankrupt in 2015
- Riveria went bankrupt in 2010, closed for good in 2015
- Terrible's went bankrupt in 2009
- Aladdin's went bankrupt in 2001

Atlantic City had a bad run also:

- Sands imploded in 2007, performing poorly
- Atlantic Club Casino in 2014
- Revel, 2.4 billion(!)
- trumps properties

Doc H Aug-20-2023

vegasvic

'He never went personally bankrupt, though, only his businesses, leaving the investors holding the whole bag.'

Make sure your friends and family stay away from your advice on the basics on how to set up a business, ouch. It starts at creating your biz under an LLC to shield your personal assets and goes from there. Please, don't start a biz yourself, ok? You're scaring me, lol.

AZmaddog Aug-20-2023

Sen. Geary

Applicant pays nothing for the license.  It's expected that Senator Geary will pay the licensing fee out of his own pocket.  That's all there is to it.

[email protected] Aug-20-2023

NV, MS & NJ: Hardest?

Perhaps you could do a 2nd & 3rd addition, with Missippie and New Jersey.  How is the process different, which would be the easier and most difficult among the three states?

VegasVic Aug-21-2023

Doc

I make a fortune selling MAGA hats (made in China of course) to rubes.

VegasVic Aug-21-2023

Failed Businesses

Trump Vodka, Trump Steaks, Trump Airlines, Trump Mortgage, Trump Magazine, Trump University, Trump Ice, New Jersey Generals, Tour de Trump, Trump Network and more.   That's why he's switched to grifting from the uneducated.

Question of the Day - 20 August 2023

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