KVIG Informative

Until 1967, Nevada forced every stockholder in a casino company to pass an individual background check — a rule that made it nearly impossible for any company traded on a public exchange to own a casino at all. Nevada rewrote that rule to raise capital, and the law it wrote is still the reason a United Kingdom-based sports-betting company and a Japan-based slot-machine maker can hold Nevada gaming licenses today.

Before 1967, state law required a personal background investigation of every individual with a financial stake in a casino. That worked for family-run and partnership casinos, but it was unworkable for a company whose shares traded on a public exchange, where ownership could change hands by the day, according to the Nevada Legislative Counsel Bureau’s own history of the state’s gaming statutes.

Some operators found ways around the rule anyway. At a March 27, 1967, hearing on the bill meant to fix that, state Sen. Lamb told the Senate Judiciary Committee that the Del Webb Corporation’s existing casino arrangement amounted to a “back door” into licensing that nobody had sanctioned outright — legal, he said, but an arrangement he disliked, according to the committee’s own minutes.

The bill under discussion, Senate Bill 470, would make that kind of corporate ownership open and legal, under rules requiring the state to investigate a corporation’s defined officers and major stockholders rather than every individual shareholder, witness Russ McDonald told Committee Chairman Monroe, the same minutes show. Robbins Cahill, representing the Nevada Resort Association, testified that the larger casino operators favored the change, and Sen. Dodge said the resulting investment could give the gaming industry a needed “aura of respectability,” according to the same record.

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The Legislature passed Senate Bill 470, and it became Chapter 534, Statutes of Nevada 1967, according to the Legislative Counsel Bureau’s history, which credits the change with making it far easier for the gaming industry to raise capital and expand.

Two years later, lawmakers decided the new corporate framework needed tighter state oversight. A Feb. 10, 1969, Senate Judiciary Committee hearing on revisions to the law drew Donald Stephensen, vice president and general counsel of the Del Webb Corporation; Herb Jones, an attorney for Parvin-Dohrmann Inc.; and Richard Gray, representing Hughes Tool Co. and Howard Hughes personally, according to the committee’s own minutes. That session, the Legislature passed Senate Bill 353, enacted as Chapter 220, Statutes of Nevada 1969, giving the state more control over the corporate licensees the 1967 law had created, the Legislative Counsel Bureau’s history states.

Howard Hughes never actually used the new corporate framework himself. He bought the Desert Inn in 1967 and spent the following year buying the Frontier, the Sands, the Castaways, the Silver Slipper and Harold’s Club in Reno as an individual owner operating through the privately held Hughes Tool Co., according to a history published by the Nevada Resort Association. By 1968 he controlled roughly a third of Las Vegas Strip gaming revenue and had become the state’s largest private employer, prompting a federal antitrust lawsuit when he tried to add the Stardust, the same history states.

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Other operators used the law as designed. Kirk Kerkorian opened the International on Paradise Road in 1969, a resort later renamed the Las Vegas Hilton, and William Harrah’s company went public in 1971, listed on the American Stock Exchange in 1972 and became the first gaming company listed on the New York Stock Exchange in 1973, according to the State Bar of Nevada’s published account of a 1970 legislative subcommittee study of the law’s effects.

The licensing structure Nevada wrote in 1967 and tightened in 1969 — investigate the officers and major owners, not every shareholder on a public exchange — is still the law the state uses. As of July 2026, thirty publicly traded corporations were registered or reporting with the Nevada Gaming Commission under that framework, including companies based in the United Kingdom, Australia, Malaysia and Japan, according to the commission’s own public registry. In May 2024 the commission used it to grant Entain plc, the United Kingdom-based company that co-owns the sports-betting platform BetMGM with MGM Resorts International, its first unconditional Nevada license, after years of limited licensing tied to the board’s concerns about Entain’s operations in unregulated markets abroad — a decision Entain chairman Barry Gibson said cost the company roughly $100 million in exited-market profit. Nevada opened the door to corporate capital in 1967 so the industry could grow beyond what individual owners could finance. Fifty-nine years later, the state is still deciding, company by company, how far it will let that door stay open.