THE NEVADA GAMING LICENSE:
A GAMBLE YOU SHOULD NOT MAKE ALONE

By Brian R. Hardy, Esq.

In 1977, the Nevada Supreme Court aptly stated that “[i]t is established beyond question that gaming is a matter of privilege conferred by the State rather than a matter of right.” 1 Thus, it is not surprising that one of the most daunting journeys in Nevada is the path to obtaining a privileged gaming or liquor license. However, as with any journey, when undertaken with an experienced guide an applicant can avoid many of the unforeseen pitfalls.

THE AGENCIES

Nevada has a two-tiered regulatory gaming system. In 1955, Senate Bill 170 was enacted, which created the Nevada Gaming Control Act and established the Nevada Gaming Control Board (“Board”). Senate Bill 170 identified gaming licenses as “revocable privileges”, and gave the Board’s agents authority to determine who was fit to hold a gaming license. Four years later, Assembly Bill 144 created the Nevada Gaming Commission (“Commission”) which was tasked with administering its functions for “the protection of the public and in the public interest.”

The Board is a full time agency that is charged with the duty of “observing the conduct of all licensees” and assuring that “unqualified” or “unsuitable” persons are not recommended for the privileged license. 2 In licensing matters, the Board’s agents serve as the investigators who are tasked with the duty of making recommendations to the Commission. The Board has “full and absolute power and authority” to recommend the denial, limitation, restriction or approval of any application. 3

In contrast, the Commission is composed of five members appointed for staggered terms by the Governor. 4 The Commission is Nevada’s administrative agency which has “full and absolute power and authority” to approve, deny, limit, condition, restrict, revoke or suspend any license “for any cause deemed reasonable.” 5 Thus, when obtaining a gaming license an applicant must obtain a positive recommendation from the Board and approval from the Commission.

THE APPLICATION

Completing and filing an application is the first step toward obtaining a gaming license. 6 Applicants must also submit a personal history record, personal financial questionnaire, release of claims form, release of information form, fingerprint cards, and an affidavit of full disclosure, among others. 7 Moreover, like all other applicants, corporate entities and their governing members must submit to background investigations by the local law enforcement agency. Generally, an applicant may also be required to disclose details regarding previous business relationships, employment history, criminal records, and financial stability. 8 Applicants must be extremely thorough when completing their Personal History Record and Personal Financial Questionnaire. These forms will be the springboard upon which Board Agents rely upon when beginning their investigation. Any information not disclosed in these two forms will undoubtedly come to light and will haunt the remainder of an applicant’s investigation and create a black mark on your application.

THE INVESTIGATION

Generally, the gaming license application process and subsequent investigation is quite onerous in comparison to the process of obtaining other government-issued licenses. The difficulty of the process is intended to dissuade participation by unsavory persons and protect Nevada gaming from it history of organized crime. The investigation usually includes an initial interview, a formal investigation by the Board, interim interviews where an applicant is asked to clarify or explain items identified in the investigation, and a final interview or closing conference. 9 Applicants are often asked to explain personal behavior and business decisions which occurred many years prior to their pending application. At the end of the investigation, the agents prepare a confidential summary for the Board. 10 This confidential summary and the results of the Board Hearing will determine what the Board recommends to the Commission.

THE BOARD HEARING

The applicant and his legal counsel are generally required to attend a board hearing. At the hearing, the applicant is sworn in. The applicant’s counsel is then able to proceed with an opening statement, call witnesses, and submit briefs or exhibits to prove that the applicant is suitable for the privileged license. Once the applicant has presented his case, the Board can question the applicant on any topic that will assist them in making a “determination of the applicant’s general character, integrity, and ability to participate or engage in, or be associated with gaming.” 11 Once the Board has completed its questioning, the applicant is allowed to present any additional evidence and make a closing statement. Board members will then discuss in an open forum the merits of the application. 12 Once the discussion is complete, one of the Board members with make a motion to continue the matter, refer it back to staff or make a recommendation to the Commission.

THE COMMISSION HEARING

Like the Board Hearing, the applicant and his legal counsel are generally required to attend. The applicant or his counsel can make opening statements, call witnesses and present any proper documentary evidence. 13 Once the applicant has presented his case, the Commission can question the applicant and rule on scheduling, evidentiary or procedural matters. 14 After discussion on the matter, a Commission member will make a motion to continue the matter, refer it back to the board, or approve/deny the application. 15

If an application is denied, the applicant has no recourse against the Commission to seek reversal of the decision and cannot reapply. 16 Therefore, it is important to get it right the first time. In light of the risks and rewards involved, our advice to you is simple - don’t journey alone. The best way to accomplish this goal is with an experienced guide.
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1 State v. Rosenthal, 93 Nev. 36, 40, 559 P.2d 830, 833 (1977).
2 NGC Reg. 5.040.
3 NRS 463.1405(3).
4 NRS 463.022; see also NRS 463.024.
5 NRS 463.1405(4).
6 NRS 463.200.
7 An applicant investigation is not begun until applicant submits all required information. NRS 463.210.
8 NGC Reg. 4.030.
9 NGC Reg. 2.060.
10 The Nevada Supreme Court has determined that a gaming license applicant is not entitled to review the Board’s confidential summary before a hearing on the application. Resnick v. Nevada Gaming Commission, 104 Nev. 60, 752 P.2d 229 (1988).
11 NRS 463.170(4).
12 See NRS 241 et. al.
13 NGC Reg. 2.030(6).
14 NGC Reg. 2.020.
15 NRS 463.220.
16 NRS 463.0129(2) provides that [n]o applicant for a license or other affirmative commission approval has any right to a license or the granting of the approval sought. Any license issued or other commission approval granted pursuant to the provisions of this chapter or chapter 464 of NRS is a revocable privilege, and no holder acquires any vested right therein or thereunder. See also State v. Rosenthal (stating that gaming is a privilege and “does not carry with it those rights inherent in useful trades and occupation”).