Casino Gaming and the Law

Casino gaming is an activity that requires specific laws to be in place. These laws include gambling laws and regulations at the state, federal, and tribal levels.

The laws governing this activity can be confusing for players and those involved in the industry. They include legality, regulation, and taxes.

Legality

The legality of casino gaming varies from state to state. In some states, games of skill like blackjack are legal while in others they are illegal.

Often, courts use a standard called the ‘predominance test’ to distinguish games of skill from those that are based on chance. The most common version of this test says that a game is lawful as long as skill dominates chance.

A second common test involves assessing whether a game has a material element that contributes to the outcome of the game. This includes determining how much luck is involved and whether or not the game entails ‘any chance’ at winning.

While a few states prohibit casino gaming entirely, most allow some forms of gambling such as online slots and poker. A few states even allow social casino games and fantasy sports.

Regulation

There are many different regulations regarding casino gaming, and they vary from state to state. Some of these laws are aimed at combating money laundering, while others require casinos to file reports with the federal government regarding cash payments and suspicious activity.

The law also regulates the qualifications of persons and entities to obtain a licence to operate a casino. Applicants must submit extensive personal and financial information, which is followed by a thorough investigation into the applicant’s suitability to run the business.

Those with more senior positions must also undergo the most stringent background investigations. They may be denied a licence to operate a casino if they are considered unsuitable or their position is too risky.

There are also many requirements around property signage and responsible gaming disclosure. These include requiring gaming advertising (print, billboards and electronic media) to include responsible gaming messaging or a toll-free helpline number.

Taxes

There are taxes associated with casino gaming, including a gross profit tax levied on casino operators. These taxes are based on the net profits generated by the casino in a given month.

The tax rate varies from state to state, from as low as 0.25 percent in Colorado to as high as 67 percent in Maryland (see Appendix Table 7). In addition to the tax on the gross profits of casinos, states collect revenues from lotteries and video games.

The tax on casino winnings is a significant source of revenue for many states. However, it can also be a deterrent to new casino development in some jurisdictions. In addition, tax collections have a tendency to decline as gambling expands and the competition for state casino dollars intensifies.

Security

Casinos are often under pressure to keep their customers safe, and this is a very important part of their job. They use surveillance cameras to monitor their guests and employees to catch people trying to cheat the system, as well as a number of other security measures.

For example, many casinos now offer chip tracking systems to ensure that chips aren’t used to cheat the casino. This is important because if chips are used in an attempt to steal money, it will be flagged up, which can cause the casino to lose millions of dollars.

Casinos also take precautionary measures to protect their cash and other assets, which are often held in vaults. This includes using security personnel to patrol the property and escorting chips to gaming tables. If a robbery is attempted, guards can be immediately on the scene. This helps them to respond quickly and give the robbers little time to react. They also regularly conduct background checks on their employees, which is a vitally important part of their security strategy.