Question of the Day - 21 July 2024

Obtaining a Nevada gaming license involves a long, expensive, detailed, and strict process. In this answer, we can provide a very general overview, just touching on the highlights.

First the applicant has to submit an extremely comprehensive application to the Nevada Gaming Control Board (NGCB) and the Nevada Gaming Commission (NGC), along with all required documentation.

That launches an extensive background investigation. The regulators thoroughly examine an applicant's business, financial, and yes personal histories to ensure that the person is "is of good character, with honesty and integrity."

Also, depending on what kind of license the applicant is applying for, he/she must prove the experience and capacity for operating a gaming establishment successfully.

Then there's a public hearing in front of the Gaming Control Board at which the applicant appears in person to present his/her case and respond to any questions or concerns, of which there are almost always many. 

If approved by the GCB, the Board sends a recommendation to the Gaming Commission, which also puts the applicant under the microscope. If the GC approves the application, the gaming license is granted.

If not, it can be denied outright or conditionally approved, which usually means a temporary license is granted and the applicant has to return in six months, a year, or two years, depending, to prove that whatever concerns the Board or Commission raised have been cleared up.

This happened recently to none other than 82-year-old Barry Diller, the media mogul who founded Fox Broadcasting Company and USA Broadcasting and is chairman and senior executive of huge broadcasting group IAC and Expedia and is worth a mere $4 billion. A couple of years ago when Diller applied for a gaming license to cover his increasing ownership of MGM Resorts, the Security and Exchange Commission concurrently launched an investigation into accusations that he'd used insider information to make a major profit on Activision options. He was granted a restricted two-year license and had to reappear, SEC letter clearing him of misconduct in hand, to receive his unconditional license.

As for how long the process takes, as noted in the Diller case, it can take a long time, depending on circumstances. And every case is different. 

The costs for obtaining a Nevada gaming license vary depending on the type of license.

The application fee for a non-restricted license (casino) can range from $25,000 to $75,000. 

For restricted licenses (smaller gaming operations like bars or taverns with up to 15 slot machines), the application fee is much lower, around $1,000 to $5,000.

Then there's the investigation fee that, yes, the applicant is responsible for; this generally starts at around $10,000 and can go up $50,000 or more, depending on its complexity and extent.

Other costs might include legal fees, consulting fees, and expenses associated with preparing the application and complying with regulatory requirements.

Then there's the annual fee that, once licensed, is based on the type of gaming operation and gross gaming revenue. These vary widely.

In Whale Hunt in the Desert, Steve Cyr describes the process he went through for his gaming license. "Casino hosts have to go through the scrutiny, get licensed, and maintain their gaming card. And it's hard to pass scrutiny, especially if you have a couple of DUIs or can't pass a drug test. When I became an independent junket rep, I had to pay $38,000 to fly Gaming back to Salina, Kansas, to do a personal background check. The investigator went so far as to talk to my junior high school teachers. Also, I get my hair tested; I can't even have marijuana in my system." 

Our book Joe's Dash is about Joe Dorsey who was an investigator for the Gaming Control Board for many years. The chapter in which he describes some of things he went through to conduct background checks provides a bird's-eye view of the process.