How to Open a Casino (Experience of the USA). Nuances of Launching a Gambling Business

How to Open a Casino (Experience of the USA). Nuances of Launching a Gambling Business

According to forecasts of Research and Markets, the US gambling market will show a 4.47% annual average growth from 2017 to 2021. Games of chance are allowed in a number of American states, and there are whole casino cities in the country. What do you have to do to open a gambling facility in the USA today?

State of the gambling industry in the USA

Состояние игорной отрасли в Америке

The American gambling market is rightfully considered to be the world’s largest. According to estimates of the North American Association of State and Provincial Lotteries, the US citizens spend around $200 per year on lotteries alone. Casinos have higher revenue than the film, music industries, and cruise companies taken together.

Games of chance are popular among both Americans and tourists that visit the country searching for entertainment. Land-based gambling facilities are allowed in the USA, but every state has its own regulations. The largest locations on the country’s map are world-famous casino cities (Las Vegas, Atlantic City) and casinos found on lands where Native Americans live.

The state gains great bonuses from the operation of gambling facilities: tax revenue exceeded $40 billion in the period from 2014 to 2017. At the same time, $2 billion were allocated to social needs annually. Now, these figures are growing, as the number of casinos is increasing in America.

The most successful gambling companies are:

  • Wynn Resorts Ltd.;

  • Penn National Gaming;

  • Melco Resorts & Entertainment Ltd.;

  • Las Vegas Sands Corp.

Las Vegas Sands has often been a market leader, owning casinos, as well as hotels in Las Vegas and Pennsylvania (besides, the company hosts facilities in Singapore and China). Back in 2013, the corporation increased its revenue by 25.6%, getting $2.4 billion of net income. In 2018, the company’s net income reached $3.58 billion.

What US states boast the most developed gambling business

Gambling for real money is allowed in Nevada, New Jersey, and Arkansas. Besides, gambling facilities officially operate in around 400 Indian reservations located throughout the USA. Some states restrict operations of gambling facilities, but it is possible to bypass legislative bans by placing casinos on barges along the Mississippi River and its tributaries, as well as cruise liners that go into the sea. Only Hawaii and Utah totally ban gambling.

Nevada. Here you will find the legendary Las Vegas casino city. It is rightfully considered to be the world’s gambling hub: in 2017, the total revenue of its gambling facilities was equal to $110 million, exceeding the figures of the previous year by 111%. Big casinos are also found in Reno and Carson City.

Washington. Most of the gambling facilities are located in Arlington, Tacoma, and Renton (overall in 87 cities). The state has favorable regulations for poker. Slot machines are also popular. Seattle port city has many floating casinos.

Oklahoma. Poker and slot machines are widely common in this state. Here you can also find hotel-casinos and Newcastle Casino Oklahoma, one of the biggest gambling facilities in the USA. Besides, tribal facilities owned by Comanche and Cherokee chains are popular in Oklahoma.

Florida. Due to the territory’s peculiarities and advantages, this state has many casinos on water. Florida quite successfully competes with Nevada and New Jersey thanks to favorable climate and availability of resort zones that attract tourists. Like in the majority of states, here you will find many facilities opened by native citizens.

California. Poker is well developed here with numerous specialized clubs. San Francisco is considered to be the heart of gambling, but the biggest casino is located in Sonoma.

Tribal casinos in America

It is necessary to distinguish Indian casinos registered and operating in settlements of Native Americans (reservations). Native settlers can make use of simplified rules for launching a gambling business. Reservations have their own legislation, which allows casinos to use tax advantages. Gambling facilities of Native Americans represent one of the oldest gambling types in the country.

  • Pechanga Resort and Casino is located in California near Temecula. It has a vast area of 1,100 square meters. There is a wide assortment of slot machines (3,400) and play tables (132) and the online version of the casino is available.

  • Treasure Island Resort & Casino is the biggest gambling facility in Minnesota. It offers 2,500 video slots and 44 play tables.

  • WinStar World Casino and Resort is found in Oklahoma. It takes the area of 48,000 square meters and offers guests 7,400 slot machines. The casino is a part of the hotel complex where visitors have access to spa services, shopping, and other kinds of entertainment.

  • Foxwoods is a truly impressive gambling complex in Connecticut. It was opened in 1986 and now occupies 32,000 square meters. Players can try luck at 4,800 slot machines and 380 play tables.

Mohegan Sun is also located in Connecticut with an area of 33,000 square meters. The casino has 5,000 slot machines and 377 play tables and is rightfully considered to be one of the biggest gambling facilities in the USA.

Gambling in the USA: regulation peculiarities

Gambling in the USA: regulation peculiarities

Gambling activity is not forbidden in the USA but falls under the control of local authorities. In such a way, authorities of states independently take decisions regarding the opening of casinos and related restrictions. This relates to the list of allowed types of gambling and many other things.

As only three states fully allow gambling business operations, it is necessary to look for ways of bypassing the law in other states. For example, Illinois, Iowa, and a number of other states forbid land-based gambling, but facilities on the water are nominally allowed.

Peculiarities of betting in the USA

Peculiarities of betting in the USA

In 1992, the Professional and Amateur Sports Protection Act (PASPA) came into effect. It banned the activity of sports betting shops with the exception of four states such as Oregon, Nevada, Montana, and Delaware. In 2018, this law was called off by the decision of the court.

Foreign corporations have taken a great interest in securities of American gambling operators, and their prices have soared. According to the research carried out by Washington Post, lovers of betting account for 55% meaning that sports betting is a huge multimillion market. Now authorities of standalone states can ban or allow betting operations: the first to legalize sports betting were Mississippi, New Jersey, West Virginia, and Pennsylvania.

Types of gambling licenses in the USA

Before you open a casino in the USA, it is important to get to know about the legislation and requirements of the required state. The reason is that regions have different regulations. However, there are three types of licenses at the federal level.

  • Restricted Gaming License. This type of license allows using only slot machines, not more than 15 of them per facility. Such a permit is a good choice for owners of bars, restaurants, or small clubs.

  • Non-restricted Gaming License allows using any number of slot machines and play tables.

  • Slot Route Operator License allows placing slot machines and play tables at third-party premises. For example, an operator makes a deal with a bar to place slot machines there.

All gambling market players including slot machine manufacturers, software developers, and employees of facilities have to acquire licenses and certificates.

Subtleties of registration and running a gambling business

Subtleties of registration and running a gambling business

To register a gambling business, the entrepreneur has to file an application to the authorities of the state. In order to do so, the businessperson needs an official legal address and company name. The name has to be original and cannot repeat one of those in the register. Besides, it is necessary to file documents for registering with the taxation system in order to obtain the taxpayer identification number. It is also needed to open a bank account for the company.

Although the gambling business is developing in the country, bringing a profit to the state, and attracting foreign capital, there are pitfalls in the business development and organization. For example, this relates to foreign investors that enter the American market and want to get a bank loan.

They are usually refused a loan, which complicates the process of opening a casino in the USA from a financial perspective. Companies acknowledged in the market with a long history of successful operation have higher chances to get a positive answer from the bank.

As for taxation, local authorities of separate states regulate gambling business tax rates. The exception is the single tax on winnings – 35% of the sum received by the player.

You can find out more about how different countries regulate the gambling industry and how to adapt those practices for the Ukrainian realias at Kyiv iGaming Affiliate Conference. The event will take place on December 18, uniting leaders of the global gambling market and local industry representatives. 

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