Jurisdiction snapshot

Trends and developments Government approach

How would you describe the state of the gaming industry in your jurisdiction, including any notable trends and recent commercial/legal developments?

The gaming industry in Nevada is stable. Gaming revenue is growing at a modest rate and new casinos are being built – although not at the rapid rate that occurred in the 1990s and early 2000s. The law and the regulatory regime are also stable, while the continued enhancement of technology is the most notable commercial development, both on the casino floor and in online and remote gaming.

How would you describe the government’s general approach to regulating gaming in your jurisdiction?

Nevada is one of the most mature gaming jurisdictions. This is usually positive for the regulatory climate, but occasionally presents challenges. Regulators are supportive of the industry and want to assist it in maintaining compliance with rules and regulations. Formal disciplinary action is typically reserved for the more egregious or recurring violations. Nevada regulators are not hostile towards gaming and understand that their very broad discretion should be exercised judiciously. However, when an applicant or licensee wants to do something substantially different, Nevada’s lengthy regulatory history may result in a ‘this is how we’ve always done it’ resistance.

Regulatory framework

Legislation Regulators General prohibitions and restrictions

What primary and secondary legislation governs gaming in your jurisdiction and to which activities do these laws apply? Does the legislation distinguish between games of skill and games of chance?

The Nevada Gaming Control Act, codified in Nevada Revised Statutes (NRS) Chapter 463, along with the regulations of the Nevada Gaming Commission, primarily governs legal gaming activities in the State of Nevada. Secondary statutes include:

The act does not distinguish between games of skill and of chance. NRS 463.0152 defines ‘game’ or ‘gambling game’ to include any game played for “money, property, checks, credit or any representative of value, including [all of the standard casino games], any banking or percentage game, or any other game or device approved by the Commission”. There is an exception for private card games where no person makes money except as a player. Betting on sports and racing and certain games such as poker, which have a significant element of skill, have been regulated under the act for many years.

Nevertheless, the Nevada Gaming Control Board has historically refrained from regulating certain games that:

  • are not listed in NRS 463.0152;
  • have not been determined by the commission to be a game;
  • are not offered by a licensed gaming establishment; and
  • are not offered as a commercial enterprise (eg, fantasy sports contests between friends). 

Moreover, the Nevada Supreme Court has previously stated that a contest in which a party offers a prize to the winner or to someone who accomplishes a particular feat is not a ‘wager’ because the person offering the prize is not a contestant and can only lose the amount offered (see Las Vegas Hacienda Inc v Gibson, 77 Nev 25, 30, 359 P.2d 85 (1961)). While the language was not necessary to the decision, the court stated that “the test of the character of a game is not whether it contains an element of chance or an element of skill, but which is the dominating element”. Where the distinction between chance and skill is important, therefore, Nevada is a ‘predominant factor’ jurisdiction.

In 2015 the Nevada State legislature empowered the commission, with the advice and assistance of the Nevada Gaming Control Board, to adopt regulations that support “innovative, alternative and advanced technology”, including games of skill (NRS 463.15997(2), (4)). A ‘game of skill’ is largely defined as a game where the element of skill is the dominant factor (Nev Gaming Comm’n Reg 14.010(10) and cf Nev Gaming Comm’n Reg 14.010(9) (defining ‘game of chance’)). The new law has reinforced that Nevada regulates both games of chance and games of skill when they are offered as a commercial enterprise in a licensed gaming establishment or are otherwise specifically regulated by the board or commission under the act.

How does the relevant anti-money laundering legislation in your jurisdiction apply in practice to gaming activities?

The US Congress passed the USA PATRIOT Act in 2001 (see Pub L No 107-56, 115 Stat 272 (2001)) and federal agencies, including the Financial Crimes Enforcement Network (FinCEN), were given broader powers and more tools to intercept and obstruct terrorism activities and related financing. In turn, FinCEN adopted regulations that required casinos to report suspicious activities to the federal government. Since July 2007 Nevada has been a full Title 31 jurisdiction reporting both cash transactions and suspicious activities to FinCEN. In turn, the Nevada Gaming Control Board now monitors each licensee’s compliance with federal anti-money laundering laws under various regulations, including Regulation 5.011(8), which requires all gaming establishments to comply with local, state and federal laws (see Nev Gaming Comm’n Reg 5.011(8)).

What bodies regulate gaming activities, and what is the extent of their powers?

Nevada is a two-tiered gaming jurisdiction. Specifically, the Nevada Gaming Control Board and the Nevada Gaming Commission jointly govern licensed and regulated gaming activities in Nevada. 

The board is overseen by three full-time board members appointed by the governor. The board is comprised of six divisions:

  • administration;
  • audit;
  • enforcement;
  • investigations;
  • tax and licence; and
  • technology. 

The board has broad investigative powers including:

  • reviewing all gaming applications;
  • conducting ongoing reviews of licensed gaming establishments;
  • commencing disciplinary actions;
  • reviewing technology (including, among others, gaming devices, cashless wagering systems, associated equipment, promotional devices and modifications to any of the foregoing);
  • maintaining the registrations of gaming employees; and
  • collecting gaming related fees and taxes. 

With regard to gaming applications, the board’s staff performs background investigations and the three-member board holds a public hearing and makes recommendations regarding applications.

The commission is comprised of five part-time members who hold monthly public hearings to consider the recommendations of the board. The commission’s decision on a gaming application is final and not subject to judicial review (NRS 463.318(2); see also Resnick v Nevada Gaming Comm’n, 104 Nev 60, 63 n 4, 752 P 2d 229 (1988)). The commission also has the final authority on new regulations.

In a disciplinary proceeding (NRS 463.310(4) and Nev Gaming Comm’n Reg 7), the board acts as the prosecutor (see Trans-Sterling Inc v Bible, 804 F.2d 525, 527 n 1 (9th Cir 1986)) to demonstrate that the licensee has violated statute, regulation, minimum internal controls, licence conditions, or other applicable local, state or federal law. The commission sits as the judge and jury to hear the evidence and make a final decision. A licensee may seek judicial review of the commission’s final decision in a disciplinary proceeding (NRS 463.315-463.318).

What primary prohibitions and restrictions apply to gaming activities and participants?

The prohibitions and restrictions that apply to the gaming patron are that:

  • the patron must be at least 21 years of age to engage in licensed gaming activity (NRS 463.350(1)(a));
  • visibly intoxicated patrons are precluded from engaging in gaming activity (Nev Gaming Reg 5.011(4));
  • certain officers, directors, owners or key employees are prohibited from gambling in their own licensed gaming establishment (Nev Gaming Comm’n Reg 5.013);
  • allowing an individual on Nevada’s List of Excluded Persons (more commonly known as ‘the Blackbook’) to enter the premises of casinos is prohibited (NRS 463.151(3); NRS 463.152-463.155 and Nev Gaming Comm’n Reg 28); 
  • participants may not use a device to gain an advantage in a gambling game (NRS 465.075) – for example, a player may count cards in his or her head, but may not use a computer or other device to do so; and
  • a person within the state of Nevada may not place a wager, for compensation, on behalf of a person outside the state (NRS 465.086).

The prohibitions and restrictions that apply to gaming activity concern not only the type of gaming activity involved, but also the premises on which that activity is conducted or its location in a community, as follows:

  • Internet gaming (NRS 463.016425) is limited to poker (Nev Gaming Comm’n Reg 5A.140(1)(a)). Additional restrictions limit online gaming licences to the operators of certain physical gaming establishments (NRS 463.750(3)-(5)).
  • Mobile gaming (NRS 463.0176) is limited to certain areas of a non-restricted gaming establishment (NRS 463.730(2)).
  • Except for a grandfathered location, a non-restricted gaming licence may not be granted in a county with a population in excess of 100,000 unless the establishment meets the criteria of a ‘resort hotel’ (NRS 463.01865; 463.1605).
  • The location of non-restricted gaming establishments is further restricted in certain counties with a population of 700,000 or more to a ‘gaming enterprise district’ (NRS 463.3072-463.3094 and NRS 463.0158).
  • Gaming activity is prohibited in locations in the immediate vicinity of churches, schools and children’s public playgrounds, where gaming would be contrary to zoning ordinances, premises with substantial minor clientele, premises lacking adequate supervision or surveillance, premises that are difficult to police, brothels and any premise where gaming is inconsistent with public policy (Nev Gaming Comm’n Reg 3.010).

With regard to restricted gaming establishments (NRS 463.0189 and 463.161), gaming is further limited to 15 or fewer slot machines and no other games where gaming is incidental to the primary business; this would include bars, taverns or saloons (NRS 463.161(3)(a)), convenience stores (Nev Gaming Comm’n Reg 1.075), grocery stores (Nev Gaming Comm’n Reg 1.130), drug stores (Nev Gaming Reg 1.101) and liquor stores (Nev Gaming Comm’n Reg 1.141 and Nev Gaming Comm’n Reg 3.015(3)).

Land-based gambling

Authorised establishments Licensing Employees and suppliers Zoning restrictions Operations Taxes Compliance

What types of gambling establishments are authorised to operate in your jurisdiction and how are they classified?

There are two types of licensed gaming establishment (NRS 463.0169) in Nevada: non-restricted and restricted. A non-restricted gaming licence would include a location operating 16 or more slot machines, or any number of slot machines together with any other game, including a table game, race book and/or sports pool at a single establishment (NRS 463.0177 and 463.245). 

Restricted gaming is limited to 15 or fewer slot machines and no other games where gaming is incidental to the primary business; this would include bars, taverns or saloons (NRS 463.161(3)(a)), convenience stores (Nev Gaming Comm’n Reg 1.075), grocery stores (Nev Gaming Comm’n Reg 1.130), drug stores (Nev Gaming Reg 1.101) and liquor stores (Nev Gaming Comm’n Reg 1.141) (Nev Gaming Comm’n Reg 3.015(3)).

The following must have a non-restricted gaming licence, but must conduct their operations at either a restricted or non-restricted gaming establishment, as appropriate to the particular operation operator of a slot machine route (Nev Gaming Comm’n Reg 1.170):

What licensing procedures and requirements apply to gambling establishments (including any fees)?

All gaming applications (NRS 463.200 and Nev Gaming Comm’n Reg 4.040(1)) are filed with the Nevada Gaming Control Board’s Applicant Services Coordinator, who will review the submission to ensure that the application is complete. Only when the application is complete will it be deemed filed with the board. Approximately 14 to 30 days after the application is filed, it will be assigned to a board agent who will conduct the appropriate investigation to determine the applicant’s suitability (NRS 463.1405(1) and 463.210(1)).

For those seeking a restricted gaming licence, the application fee is $700. For non-restricted applicants, the applicant must pay a $500 application fee for each person seeking a licence or finding of suitability and all costs of the investigation, including the time of the investigating agents plus all travel costs, copying costs, translation costs and similar costs. The assigned agents will provide an estimate of the investigative costs (Nev Gaming Comm’n Reg 4.070(6)) that must be deposited before commencement of the investigation. 

The assigned agents will send a document request letter to each applicant and will schedule an initial interview with each of the individual applicants. The interview is an opportunity for the agents to review the application with the applicant. It is also the applicant’s chance to make any corrections or provide clarification regarding the responsive information set forth in the application.

Most investigations are completed within six to eight months. More complex investigations that involve multinational companies may take nine months or longer to complete. 

On completion of the review, the board will convene a public hearing to consider the application and question individual applicants and/or their representatives. The board has full and absolute power to make any recommendation that it deems appropriate, including to:

  • approve the application with possible limitations and conditions;
  • deny the application;
  • allow the applicant to withdraw the application with or without prejudice (Nev Gaming Comm’n Reg 4.140); or
  • refer the application back to staff for further investigation (NRS 463.220(3)).

The Nevada Gaming Commission will hold its own public hearing to consider the application and the board’s recommendation. The commission will make the ultimate determination on whether to grant the requested licence. The commission has full and absolute power to approve, deny or reject the application, or place any limitations or conditions it deems appropriate upon the licence (NRS 463.1405(4) and 463.220(3)-(4)). If the board has recommended denial, then the commission must unanimously vote to approve the application (NRS 463.220(4)(d)).

The commission’s ultimate disposition on a gaming application is final and is not subject to judicial review (NRS 463.318(2) and Resnick, 104 Nev at 63 n.4). If the commission denies an application, it will enter a written order setting out the reasons for denial (NRS 463.220(7)).

Applications may be amended at any time before the commission’s final action (Nev Gaming Comm’n Reg 4.040(4)).

How can licences be renewed, and what terms and fees apply?

Unless the Nevada Gaming Commission limits a licence for a period (NRS 463.1405(4) and 463.220(2)), gaming licences are not subject to renewal through the filing of another licensing application. However, each gaming licence is subject to renewal through the payment of applicable annual and quarterly fees and taxes (NRS 463.270). Failure to pay the appropriate fees or taxes within 30 days of their due dates will result in the gaming licence being deemed surrendered (NRS 463.270(7)).

Once licensed, the following fees may be assessed, depending on the type of licence:

  • restricted quarterly slot fees pursuant to NRS 463.373;
  • non-restricted quarterly slot fees pursuant to NRS 463.375;
  • annual excise tax on slot machines pursuant to NRS 463.385;
  • quarterly game licence fees pursuant to NRS 463.383;
  • annual game license fees pursuant to NRS 463.380;
  • annual licence fees for mobile gaming system and inter-casino linked systems operator pursuant to NRS 463.450;
  • annual licence fees for manufacturers and distributors of gaming devices pursuant to NRS 463.660;
  • pari-mutuel licence fees pursuant to NRS 463.125;
  • annual licence fees for an operator of interactive gaming pursuant to NRS 463.765(1), (2);
  • monthly licence fees for a race wire or disseminator pursuant to NRS 463.450;
  • annual licence fees for a manufacturer of interactive gaming systems pursuant to NRS 463.760(1)(a), (2);
  • annual licence fees for an associated equipment manufacturer for interactive gaming systems pursuant to NRS 463.760(1)(b), (2); and
  • annual licence fees for an information service provider pursuant to Regulation 5.240(13).

On what grounds can licences be revoked? Can revocation be challenged in any way?

A gaming licence cannot be revoked unless the Nevada Gaming Control Board commences a formal disciplinary proceeding by filing a complaint with the Nevada Gaming Commission (NRS 463.310(2) and 463.312). The licensee is given an opportunity to request an evidentiary hearing before the commission where any relevant evidence may be submitted, and witnesses called and examined (NRS 463.310-463.3145 and Nev Gaming Comm’n Reg 7).

In such a disciplinary proceeding, the board acts as the prosecutor and has the burden of demonstrating that the licensee violated statute, regulation, licence conditions, minimum internal controls or other applicable local, state or federal law (Trans-Sterling Inc v Bible, 804 F.2d 525, 527 n 1 (9th Cir 1986)). The commission sits as the judge and jury to make final a decision on the evidence that is presented (NRS 463.3145(1)). Thereafter, the licensee may seek judicial review of the commission’s final decision pursuant to NRS 463.315-463.318. The courts will affirm the decision of the commission based on any evidence that is not arbitrary, capricious or contrary to law (Nevada Gaming Comm’n v Consolidated Casinos Corp, 94 Nev 139, 141, 575 P.2d 1337 (1987)).

What rules and restrictions govern the hiring and ongoing relationship with employees of and suppliers to gambling establishments?

Gaming employees (NRS 463.0157) must be registered with the Nevada Gaming Control Board pursuant to NRS 463.335(2). Unlike many other gaming jurisdictions, Nevada does not license suppliers or vendors, except for manufacturers and distributors of gaming equipment. However, most non-restricted gaming licensees (NRS 463.0177) conducting gaming operations outside Nevada (NRS 463.680-463.720), and/or are public companies registered (NRS 463.635(1)(c)) with the Nevada Gaming Commission, must have a gaming compliance plan that is administratively approved by the board (Nev Gaming Comm’n Reg 5.045). All such compliance plans require the licensee to conduct some level of due diligence on its key executives, officers and directors, and its vendors, either before entering into a business relationship or, more likely, when a certain monetary threshold of business has been reached in a calendar year.

Are there any zoning or other planning restrictions for gambling establishments?

Zoning or planning restrictions in the Nevada Gaming Control Act and the Nevada Gaming Commission Regulations applicable to licensed gaming establishments consist of the following:

  • Except for a grandfathered location, a non-restricted gaming licence may not be granted in a county with a population in excess of 100,000 unless the establishment meets the criteria of a ‘resort hotel’ (NRS 463.01865; 463.1605).
  • A non-restricted gaming establishment in counties with a population of 700,000 or more must be located in a ‘gaming enterprise district’ (NRS 463.3072-463.3094 and NRS 463.0158).
  • Gaming activity is prohibited in locations in the immediate vicinity of churches, schools and children’s public playgrounds, premises with substantial minor clientele, premises lacking adequate supervision or surveillance, premises that are difficult to police, brothels and any premise where gaming is inconsistent with public policy (Nev Gaming Comm’n Reg 3.010).

In addition, each local government in Nevada has certain zoning and planning restrictions on gaming establishments within its jurisdiction. Larger communities generally have more restrictions on the location of gaming establishments.

What rules, restrictions and ongoing obligations govern the operations of gambling establishments (eg, reporting and monitoring requirements, customer due diligence)? What are the penalties for non-compliance?

Licensed gaming establishments are governed the Nevada Gaming Control Act and the Regulations of the Nevada Gaming Commission. In addition, licensees are expected to comply with any conditions on their licences, minimum internal control standards (MICS), as well as local, state and federal laws (including, but not limited to, compliance with the federal Bank Secrecy Act and the regulations codified in Title 31, Chapter X of the Code of Federal Regulations for Anti-money Laundering Practices and Procedures). Internal audits are required bi-annually and annual independent audits are also required. Most licensees operating in multiple jurisdictions will be required to implement an approved compliance plan to monitor operations and conduct appropriate due diligence.

Disciplinary actions may be formal or informal. Informal disciplinary actions are confidential and require the licensee to explain the cause of the alleged violations and the steps taken to prevent them from recurring.

Penalties may only be imposed through formal disciplinary proceedings. If the commission finds that the licensee committed the alleged violations, it may limit, condition, suspend or revoke the licence and/or impose a fine of up to $250,000 per violation, depending on the circumstances (NRS 463.310(4)).   

What taxes and duties apply to gambling establishments?

The following taxes are applicable to the operation of non-restricted gaming establishments:

  • annual and quarterly licence fees pursuant to NRS 463.372-463.3856;
  • gross revenue fees pursuant to NRS 463.370 – this is a graduated tax assessed monthly on the non-restricted gaming establishment’s net win; and
  • other taxes and fees applicable to businesses generally, although a credit for gaming taxes paid may be applicable in certain circumstances.

What best practices are advised in order to ensure compliance with the relevant regulations?

Many violations involve failure to follow the MICS. Regular training for staff on the MICS is critical for minimising violations. Additionally, the creation and implementation of a robust gaming compliance programme is the most effective way to comply with applicable laws and regulations (Jeffrey R Rodefer, Creating and Implementing an Effective Gaming Compliance Program, Nevada Gaming Lawyer at 30 (2011)). The programme is an important management tool in establishing a culture of compliance (Dave Staley and Luke Rippee, Nevada’s New Gaming Compliance Unit: What Licensees Need to Know, Nevada Gaming Lawyer at 35 (2017)). Finally, making all staff aware that the company, from the CEO down, expects compliance helps to create a culture of compliance (Jeffrey R Rodefer, Culture of Compliance, Nevada Gaming Lawyer at 41 (2017)).

Online and remote gaming

Regulation Jurisdiction

What is the attitude of the courts and regulatory authorities to jurisdiction over foreign operators? Where is gaming activity deemed to take place?

Under Nevada law, both the online gaming operator and the player must be within the state of Nevada or in another jurisdiction that has an interstate agreement with Nevada. At present, Nevada has an agreement with the states of Delaware and New Jersey, allowing players in any one of the three states to play poker on sites licensed in Nevada, New Jersey and Delaware. Pursuant to those agreements, the gaming activity is deemed to take place, for purposes of gross revenue taxes, in the state where the player is located. Nevada has no restrictions on foreign operators partnering with Nevada casinos to obtain licences, but foreign operators may not offer online gaming in Nevada without a licence.

Licensing Taxes Loot boxes Cryptocurrency Foreign and unauthorised gaming sites

To what extent is online and remote gaming regulated in your jurisdiction? Are there any notable rules and restrictions in this regard?

In Nevada, interactive (online) gaming (NRS 463.016425) is currently limited to poker (Nev Gaming Comm’n Reg 5A.140(1)(a)). Involvement in online gaming requires a licence for the proposed activity (NRS 463.750 and Nev Gaming Comm’n Regs 5A.030, 5A.060). 

A licensed race book or sports pool may accept remote wagers from within Nevada on sporting events and races provided that the chair of the Nevada Gaming Control Board grants administrative approval for the use of such wagering communications technology, most notably apps for smart phones, tablets and computers (Nev Gaming Comm’n Regs 22.130, 22.140).

The following notable restrictions apply to online and remote gaming activity:

  • online gaming is limited to certain casinos and their partners (NRS 463.750(3)-(5)); and
  • the use of wagering communications technology, including betting apps is limited to the state of Nevada through the use of geolocation software (Nev Gaming Comm’n Reg 22.140(1)).

Are there any licensing requirements for online and remote gaming activities?

In order to be involved in online gaming – as an operator of an interactive gaming system (Nev Gaming Comm’n Reg 5A.020(8)), a manufacturer of an interactive gaming system (Nev Gaming Comm’n Regs 14.010(20), (21)) or an interactive gaming service provider (Nev Gaming Comm’n Reg 5A.020(4)) – the Nevada Gaming Commission must grant a licence for such activity (NRS 463.750; Nev Gaming Comm’n Regs 5A.030, 5A.060).

A licensed race or sports book may accept remote wagering on sporting events and races (provided that the chairman of the Nevada Gaming Control Board grants administrative approval for the use of such wagering communications technology, most notably apps for smartphones, tablets and computers (Nev Gaming Comm’n Regs.22.130, 22.140)).

Do any taxes or duties apply to online gaming activities?

In addition to annual licence fees of $250,000 for online gaming operators, the gross gaming revenues generated from the operation of interactive gaming are subject to taxation at the same rate as land-based casinos, which is a graduated tax that is assessed monthly (NRS 463.765 and 463.370 and Nev Gaming Comm’n Reg 5A.040 and 5A.170). The top rate for the tax on gross gaming revenue is 6.75% (NRS 463.370).

What is the legal status of and regulatory approach to ‘loot boxes’ or other in-game items in online games?

Nevada has not explicitly addressed ‘loot boxes’ or other in-game items. A ‘gambling game’ is defined, in part, by the Nevada Gaming Control Act as a game played for “money, property, checks, credit or any representative of value” (NRS 463.0152). To constitute ‘gambling’ in Nevada, there must be a ‘wager’ which involves at least two parties who each have a risk of loss and a chance of gain (Gaming Comm’n v GNLV Corp, 108 Nev 456 (1992)). The act distinguishes between a ‘gambling game’ and a ‘contest’ (NRS 463.0152 and 463.01463). One of the key distinguishing characteristics is whether a ‘wager’ exists (Op Nev Att’y Gen No 2006-06 (18 August 2006)). Whether loot boxes involve a ‘wager’ will depend on all of the facts and circumstances and how a game is structured.

What is the legal status of and regulatory approach to the use of cryptocurrency in online games?

Regulation 5.225(9) establishes the means by which deposits to wagering accounts may be made (Nev Gaming Comm’n Reg 5.225(9)). Subsection 9(f) allows deposits by “any other means approved by the chairman” (Id). Nevertheless, Nevada has not yet authorised the use of cryptocurrency or other forms of virtual currency for any gaming activity and is unlikely to do so unless anti-money laundering concerns can be addressed to the satisfaction of the Nevada Gaming Control Board.

What measures are in place to block foreign and other unauthorised gaming sites?

There are no specific measures in place to specifically block foreign or other illegal gaming websites. Those operating such online sites are in violation of federal and state law. The Unlawful Internet Gambling Enforcement Act (31 USC §§ 5361-5367) prohibits US banks and credit card companies from funding illegal internet gambling.

Lotteries, sweepstakes and prize competitions

Lotteries Sweepstakes, prize draws and prize competitions

What rules and restrictions govern lotteries in your jurisdiction (both commercial lotteries and any national lotteries)?

Pursuant to the Nevada State Constitution, lotteries are prohibited (Nev Const Art 4, §24). The exceptions are:

  • lotteries operated by charitable or non-profit organisations (NRS 462.140 and following; and Nev Gaming Comm’n Reg 4A); and
  • “a promotional scheme conducted by a licensed gaming establishment in direct association with a licensed gaming activity, contest or tournament” (NRS 462.105(2)).

What rules and restrictions govern sweepstakes, prize draws and prize competitions?

The primary elements of any such contest are prize, chance and consideration (NRS 462.105(1)). Pursuant to the Nevada State Constitution, lotteries are prohibited (Nev Const Art 4, §24). The exceptions are:

  • lotteries operated by charitable or non-profit organisations (NRS 462.140 and following; and Nev Gaming Comm’n Reg 4A); and
  • “a promotional scheme conducted by a licensed gaming establishment in direct association with a licensed gaming activity, contest or tournament” (NRS 462.105(2)).  

However, under Nevada law ‘consideration’ for a promotional activity does not include engaging in a transaction where the customer receives fair value, accepts anything on a trial basis or is required to be present at a particular time and place where that promotional activity is occasional and ancillary to the organisation’s regular business (NRS 462.105(3)). For example, if a hamburger chain offers a prize draw and gives a game piece to everyone who buys a hamburger, as long as the price of a hamburger is not increased during the time that the prize drawing is taking place, the purchase of the hamburger would not be a ‘consideration’. Similarly, if an automobile dealership conducts a prize draw and everyone who test drives an automobile at the dealership is entered into the draw, the act of appearing at the dealership and test driving the automobile would not be a ‘consideration’.

Advertising and marketing

Media advertising Other marketing methods

What rules and restrictions govern media advertising for gaming establishments and activities?

Media advertising for licensed gaming establishments is largely governed by First Amendment commercial free speech considerations. In order for commercial speech to be protected speech, it must concern lawful activity and not be misleading (Central Hudson Gas & Elec Corp v Public Serv Comm’n, 447 US 557 (1980)). Nevada Gaming Commission Regulation 5.011(4) adopts these standards by making it an unsuitable method of operation for any licensed gaming establishment to fail to “conduct advertising and public relations activities in accordance with decency, dignity, good taste, honesty and inoffensiveness, including, but not limited to, advertising that is false or materially misleading”. An unsuitable method of operation is subject to disciplinary action under Regulation 5.030.

Do any rules or restrictions apply to other means of marketing and advertising gaming establishments and activities?

Nevada Gaming Commission Regulation 5.011(4) makes it an unsuitable method of operation for any licensed gaming establishment to fail to “conduct advertising and public relations activities in accordance with decency, dignity, good taste, honesty and inoffensiveness, including, but not limited to, advertising that is false or materially misleading”. An unsuitable method of operation is subject to disciplinary action under Regulation 5.030. Additionally, there are separate policy considerations that:

  • restricted gaming establishments must predominantly advertise the primary business rather than gaming;
  • advertising cannot be directed to or target those under the age of 21; and
  • advertising cannot be directed to those who have exercised their right to self-limit from direct mail marketing (Regulation 5.170(4)). 

Consumer protection

Protection of minors Responsible gaming Suspicious transactions Disputes

What measures are operators required to put in place to protect minors against gaming activities?

Nevada Revised Statute (NRS) 463.350 bars anyone under the age of 21 from playing, placing wagers at or collecting the winnings from licensed games (either in person or through an agent). Further, those under the age of 21 are prohibited from loitering in or around licensed gaming activity or being employed as a gaming employee. Additionally, games and gaming devices may not use a theme that is primarily intended to be marketed to persons under the age of 21 (Nev Gaming Comm’n Reg 14.025). Finally, before setting up a wagering account, including an account for online gaming, the licensee must obtain, record and verify the patron’s date of birth (Nev Gaming Comm’n Reg 5.225(5)).

What measures are in place to promote and ensure responsible gaming?

Nevada Gaming Commission Regulation 5.170 governs responsible gaming. A licensee must provide written materials concerning the nature and symptoms of problem gaming in a conspicuous area on or near the gaming floor, at the cage and adjacent to cash points, as well as the toll-free number to the National Council on Problem Gambling or similar entity (Nev Gaming Comm’n Reg 5.170(2). Further, each licensee is required to implement procedures and training for “all employees who directly interact with gaming patrons in the gaming areas” (Nev Gaming Comm’n Reg 5.170(3)). Finally, each licensee that “engages in the issuance of credit, check cashing, or direct mail marketing of gaming opportunities” will implement a programme that allows patrons to self-limit their access to credit, cheque cashing or direct marketing materials (Nev Gaming Comm’n Reg 5.170(4)). Online gaming operators must have a self-exclusion policy, Nev Gaming Comm’n Reg 5A.130, and their sites must contain links to a responsible gambling site (Nev Gaming Comm’n Reg 5A.150(6)).

What measures and procedures are in place to report suspicious gaming transactions?

The US Congress passed the USA PATRIOT Act in 2001 (Pub L No 107-56, 115 Stat 272 (2001)) and federal agencies were given broader powers and more tools to intercept and obstruct terrorism activities and related financing. In turn, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury, adopted regulations requiring casinos to report suspicious activities to the federal government. Nevada casinos are required to report both large cash transactions and suspicious activities to FinCEN. The Nevada Gaming Control Board monitors each licensee’s compliance with federal anti-money laundering laws through provisions in its administratively approved gaming compliance programme or through the general provisions under Regulation 5 that require all gaming establishments to comply with local, state and federal laws (Nev Gaming Reg 5.011(8)). Additionally, operators of race and sports books must report certain suspicious transactions to the board (Nev Gaming Comm’n Reg 22.121).

How are consumer disputes in the gaming industry resolved?

NRS 463.362 governs disputes between patrons and licensed gaming establishments over claims involving “alleged winnings, alleged losses or the award or distribution of cash, prizes, benefits, tickets or any other item or items in a gambling game, tournament, contest, drawing, promotion or similar activity or event” (NRS 463.362(1)(a)). For disputes under $500, the licensee should notify the patron of his or her right to request the Nevada Gaming Control Board to investigate (NRS 463.362(2)(b)). For disputes of $500 or more, the licensee must immediately notify the board (NRS 463.362(2)(a)). Once notified of a dispute, a board agent will conduct an investigation and issue a written decision within 45 days of the board being first contacted about the matter (NRS 463.362(3)). Within 20 days of receiving the board agent’s written decision, an aggrieved party (patron or licensee) may file a petition with the board requesting a hearing (NRS 463.363(1), (2)). If the petition is not filed or not filed in a timely manner, the agent’s decision becomes final (NRS 463.363(3)). If the petition is filed in a timely manner, the petition will be assigned to a hearing examiner to conduct a formal hearing and consider relevant evidence that is presented (NRS 463.363(6), (7) and Nev Gaming Comm’n Reg 7A). The hearing examiner will issue a decision either sustaining, modifying or reversing the agent’s decision (NRS 463.364(2)). Thereafter, the matter will be considered by the three members of the board at a public hearing, where its review will be limited to the record before the hearing examiner. The board may sustain, modify or reverse the hearing examiner’s decision. Thereafter, any aggrieved party may seek judicial review within 20 days of the board’s final decision (NRS 463.3662-463.3668). Online gaming operators must include active links on their websites to information explaining how disputes are resolved and to the board’s website (Nev Gaming Comm’n Reg 5A.150(6)).