In 2011, the Nevada legislature authorized intrastate online gambling and, later that year, the Nevada Gaming Commission (“Commission”) adopted regulations that govern such operations. The analysis below provides an overview of these regulations as they relate to interactive gaming suppliers.
It is important to note that those suppliers involved in interactive gaming in Nevada remain subject to the laws and regulations governing all gaming activity in the state, including the Gaming Control Act (“Act”) and Regulations of the Nevada Gaming Commission and State Gaming Control Board (“Rules”). For a detailed analysis of these laws and regulations, please see the Casino Vendor’s Licensing Guide analysis for Nevada Commercial Gaming.
In general, the authorization for interactive gaming created two new classifications of gaming licenses: the Manufacturer of Interactive Gaming Systems License, for those companies that manufacture systems or components of systems for interactive gaming, and the Interactive Gaming Service Provider License, for those companies seeking to act as a service provider in connection with interactive gaming.
Importantly, the Rules define an “interactive gaming system” as:
…a game or device and means the collective hardware, software, communications technology, and proprietary hardware and software specifically designed or modified for, and intended for use in, the conduct of interactive gaming. The core components of an interactive gaming system, including servers and databases running the games on the interactive gaming system and storing game and interactive gaming account information, must be located in the State of Nevada except as otherwise permitted by the chairman or his designee.”
1Please note that, under this definition, core hardware used to operate an interactive gaming system must be located in Nevada.
Interactive Gaming – General ResourcesAs the interactive gaming market is still developing, another resource for suppliers of equipment related to interactive gaming is the Gaming Standards Association (“GSA”). The GSA is an organization that is in the forefront of interactive gaming developments and assists in identifying unique issues for the industry and regulators alike related to new technology and operations practices.
Those interested in learning more about the GSA, including its model standards for gaming technology, should visit the association’s website.
2 These companies include those that “assemble, or control the assembly of, a gaming device, cashless wagering system, mobile gaming system or interactive gaming system, including proprietary software or hardware, for use or play in Nevada.”
3FeesA company seeking licensure as a Manufacturer of Interactive Gaming Systems is subject to the same fees as other manufacturers requiring licensure by the Commission.
4 As such, an application fee of $500 is due at the time the application is submitted.
5ApplicationApplicants for a Manufacturer of Interactive Gaming Systems must complete Form 2IG – Application for an Interactive Gaming License by Corporation/Partnership/Limited Liability Company, along with various disclosure authorizations.
In order to complete Form 2IG, the following information must be provided:
1. Basic identification information;
2. Specific type of license sought;
3. Description of the nature of the business;
4. Business structure;
5. Name and title of all partners, members, directors, officers, and shareholders;
6. Terms, position, rights, options, and privileges of each class of securities outstanding;
7. Terms by which securities have been offered during the past three years;
8. Terms and conditions of all outstanding loans, mortgages, trust deeds, pledges, or any other indebtedness or security device;
9. Security ownership by officers, directors, employees, partners, and others associated with the applicant;
10. List of individuals who will receive compensation based on gaming proceeds;
11. Bonus and profit sharing arrangements; and
12. List of management and service contracts.
6In addition, the following documents must be provided with Form 2IG:
1. Articles of Incorporation, Articles of Organization, Partnership Agreement, or other governing documents;
2. Business Plan; and
3. Complete list of Stockholders.
7Interactive Gaming Service Provider LicenseThose companies that act as a service provider to operators of interactive gaming systems must first apply for and receive a Service Provider License. This includes those companies that provide the following services:
1. Manages, administers, or controls wagers that are initiated, received, or made on an interactive gaming system;
2. Maintains or operates the software or hardware of an interactive gaming system;
3. Provides the trademarks, trade names, service marks, or similar intellectual property under which an operator of interactive gaming identifies its interactive gaming system to patrons;
4. Provides information regarding persons to an operator of interactive gaming via a database and customer list; or
5. Provides products, services, information, or assets to an operator of interactive gaming and receives therefor a percentage of gaming revenue from the establishment’s interactive gaming system.
8Once awarded a license, an Interactive Gaming Service Provider may provide interactive gaming services to any operator in the state authorized to conduct interactive gaming.
9FeesUpon submission of the application, the applicant must submit a $500 application fee. Once a license has been issued, the Interactive Gaming Service Provider must pay a $1,000 licensing fee.
10License TermAn Interactive Gaming Service Provider License is valid for a period of one year, beginning on January 1 and ending on December 31.
11ApplicationApplicants for an Interactive Gaming Service Provider must complete Form 2IG – Application for An Interactive Gaming License by Corporation/Partnership/Limited Liability Company, along with various disclosure authorizations.
In order to complete Form 2IG, the following information must be provided:
1. Basic identification information;
2. Specific type of license sought;
3. Description of the nature of the business;
4. Business structure;
5. Name and title of all partners, members, directors, officers, and shareholders;
6. Terms, position, rights, options, and privileges of each class of securities outstanding;
7. Terms by which securities have been offered during the past three years;
8. Terms and conditions of all outstanding loans, mortgages, trust deeds, pledges, or any other indebtedness or security device;
9. Security ownership by officers, directors, employees, partners, and others associated with the applicant;
10. List of individuals who will receive compensation based on a gaming proceeds;
11. Bonus and profit sharing arrangements; and
12. List of management and service contracts.
12In addition, the following documents must be provided:
1. Articles of Incorporation, Articles of Organization, Partnership Agreement, or other governing documents;
2. Business Plan;
3. Complete list of Stockholders;
4. General description of the nature of the business; and
5. Profit/Loss statements for the past three years or since operations began.
13Principal Employees of Manufactures of Interactive Gaming Systems and Service ProvidersCertain principal employees of companies applying for a Manufacturer of Interactive Gaming Systems or Interactive Gaming Service Provider Licenses must submit personal applications in connection with the company applications discussed above.
All officers, directors, members, and equity holders must complete Form 7 – Multi-Jurisdictional Personal History Disclosure Form (“Form 7”) and Form 7A – Nevada Supplemental Personal History Disclosure Form (“Form 7A”).
FeesEach individual that must apply for a finding of suitability must pay a nonrefundable $500 application fee.
14ApplicationThe Multi-Jurisdictional Personal History Disclosure Form is a lengthy application requiring detailed personal information. Information required to be disclosed includes:
1. Basic identity information;
2. Citizenship and passport;
3. Residence information, past 15 years;
4. Family relationships;
5. Occupation information for family members, including spouses of family members;
6. Military service background;
7. Education;
8. Offices and positions held, including fiduciary, government, and trust relationships;
9. Offices and positions held by spouse, past one year;
10. Employment history, past 20 years;
11. Spouse employment history, past one year;
12. Professional or regulatory licensing;
13. Gaming licenses applied for or held;
14. Business ownership information, 5 percent threshold;
15. Civil suit and criminal history;
16. Vehicle operation permits and licenses;
17. Financial schedules and bankruptcy history;
18. Net worth statement and schedules including assets and liabilities; and
19. Three references over 18 years old who are not related to the applicant.
15In addition to the information requested in the application, the following documents need to be attached in order to complete the application.
1. Photo;
2. Military records, if applicable.
16Applicants must also complete Form 7A, Nevada’s supplement, in connection with Form 7. The supplement contains questions relating to citizenship, spouse’s citizenship, tax audits and history, expunged criminal or civil records, and personal investment in the applicant’s business.
17 Form 7A notes that tax returns must also be disclosed.
Technical StandardsThe Commission has created a comprehensive list of technical requirements for various aspects of interactive gaming and associated equipment. These are included in the Commission’s “Technical Standards for Gaming Devices and Associated Equipment – Standard 6, Interactive Gaming Systems and Associated Equipment.”
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1Reg. 14.010(16).
2See
www.gamingstandards.com' ."
Manufacturer of Interactive Gaming SystemsThose companies that manufacture systems and components for interactive gaming systems must apply for and receive a Manufacturer of Interactive Gaming Systems License.
Gaming industry advisor Regulatory Management Counselors, P.C. authored this article. Visit the
Gaming Advisors section of this website to find out more about gaming licensing and compliance advisors.
