The Legal Status of Gaming and Its Impact on Licensing

The legal status of gaming or gambling is not the same as other businesses. Gaming is said to be a "privileged" business. There is no "right" to conduct a gaming business. Those who conduct most common types of businesses have a "right" to do so. They operate by right, not by privilege. It is a well established principle that "where a business in itself is harmless and legitimate, the power of the state to regulate it is not the equivalent of the power to suppress or destroy. Nondangerous businesses cannot be legislated out of existence." 1 The courts have not found gaming to be such a business. Just a few months after Nevada's Gaming Control Act was enacted in 1931, the Nevada Supreme Court upheld the right of the City of Las Vegas to deny a gaming license. In so doing, the court said, "Gaming as a calling or business is in the same class as the selling of intoxicating liquors in respect to deleterious tendency. The state may regulate or suppress it without interfering with any of those inherent rights of citizenship which it is the object of government to protect and secure." 2 The role of the gaming industry in Nevada today is much changed from what it was in 1931. A 1988 study revealed that the "tourist industry" accounted for 45 percent of total earnings in the state, 65 percent of total full time equivalent jobs in the state, and nearly 55 percent of state direct general fund revenues.3 The dominance of the gaming industry in Nevada and its substantial impact on jobs and tax revenues has not softened the judicial perspective on the status of the gaming industry. The Federal District Court for the District of Nevada as recently as 1988 stated: "Licensed gaming is a privilege conferred by the state and does not carry with it the rights inherent in useful trades and occupations." Recognition of gambling as a socially acceptable activity has increased as gaming has expanded into jurisdictions outside Nevada and as the industry has moved to market itself as another form of "entertainment." Logic would suggest that gaming has become a "useful trade and occupation," at least in Nevada. The law, however, does not always follow logic. It is highly unlikely that courts will soon decide that gaming has become a "useful trade and occupation," even in Nevada Centuries of experience with gambling are unlikely to be overcome by a few years, or even decades, of Nevada-type success. The terminology has more to do with the nature of the activity and its role in society than with the economic effects of a well run, well regulated industry that we have today. Courts are not