Perhaps more than any other state, Nevada understands the importance of the availability of credit to its licensed casinos and gaming manufacturers. The Nevada Gaming Control Act, which forms the basis for all gaming regulation, specifically states that the state’s public policy is “that the rights of the creditors of licensees are protected.” Therefore, not surprisingly, Nevada’s gaming regulatory scheme is quite friendly to creditors. Nevertheless, the accommodation must yield to the broader policies that gaming is strictly controlled to assure that it is honestly conducted and free from criminal and corruptive elements. Some keys to strict regulation are licensing and related approvals of those involved in the gaming industry, and the reporting, review and approval of significant transactions. A result is that lenders to gaming companies must understand the unique regulatory requirements brought to bear as the result of strict regulation.
This booklet is divided into two parts. The first part describes the regulatory requirements that apply before a loan can be made to a Nevada gaming company. These relatively minor regulations involve an understanding that a lender to a Nevada gaming company subjects itself to the jurisdiction of the Nevada gaming regulators including the possibility of having to undergo a suitability review, that loans to Nevada gaming companies must be reported, and in certain circumstance the issuance or pledges of securities require prior approval.
The second part of the booklet deals with the regulatory aspects of loans that go bad. As with most commercial loans, lenders to gaming companies expect that the debtors will repay the borrowed monies according to terms of the credit facilities. In most every case, this is the course of events.
This booklet contains:
- Regulatory Overview
- Lender Considerations Prior to Making a Loan
- Regulatory Issues When Loans Go Bad
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