USA Law and Practice Contributed by: Chao Yu (Charles Yu) and Greg Pilarowski, Pillar Legal
At the state level, sanctions and penalties vary by state, and many states do not have specific penalties for advertising. 10. Acquisitions and Changes of Control 10.1 Disclosure Requirements As a general rule, any acquisition or change of con- trol involving a licensed gaming company in the USA requires prior regulatory approval from the relevant state gaming authority. Each state establishes its own shareholding thresholds that determine when an acquirer must apply for licensure or obtain a finding of suitability, which is a formal determination that the buyer or investor meets the state’s standards of hon- esty, integrity, and financial responsibility. 10.2 Change of Corporate Control Triggers Each state sets its own ownership thresholds for when an acquirer must apply for approval or obtain a find- ing of suitability. The thresholds vary depending on whether the acquisition involves a direct interest in the licensed casino entity or an indirect interest through a holding or parent company. • At the direct casino-licence level, any transfer of ownership is subject to regulatory approval and a suitability review. • At the holding or parent-company level, regulatory scrutiny applies only when the acquirer obtains a “controlling interest”, which is defined differently across jurisdictions and entity types. 10.3 Passive Investor Requirements State gambling laws generally require regulatory approval for anyone directly acquiring an ownership interest in a licensed gaming company. However, for publicly traded gaming companies, several states establish ownership thresholds that trigger a suitabil- ity review. For instance, in Nevada, acquiring 10% or more of the voting securities of a publicly held gaming company generally requires the acquirer to apply for a finding of suitability. Some states also exempt institutional owners from licensing requirements up to certain specified thresh-
olds, provided those owners are passive. The thresh- olds vary: in New Jersey the limit is 25% (NJ Revised Statutes, Section 5:12-85.1), while in Pennsylvania, the threshold for institutional investors’ ownership is 20% (4 PA Consolidated Statutes, Section 13B62).
11. Enforcement 11.1 Powers
As discussed, regulation of the gambling industry in the USA occurs primarily at the state level, with each state’s gaming authority responsible for overseeing licensing, compliance, and enforcement within its jurisdiction. 11.2 Sanctions State gaming regulators actively supervise and moni- tor compliance through preventive measures rather than relying solely on penalties. Most jurisdictions establish standardised Minimum Internal Control System (MICS) requirements, setting out operational, accounting, and security standards for all licensed casinos. Each licensee must submit its own internal control plan for approval, covering the conduct of games, cash handling, surveillance, and recordkeep- ing to ensure transparency and accountability. In addition to periodic audits and compliance reviews, many states require the continuous presence of regu- latory agents or inspectors at gaming facilities. These agents oversee day-to-day operations, verify adher- ence to approved controls, and report any irregulari- ties to the state gaming authority. When violations occur, sanctions are imposed by the relevant state regulator. These may include monetary fines, licence suspension, or revocation, or, in seri- ous cases, criminal prosecution initiated by the state attorney general. 11.3 Financial Penalties Financial penalties are typically determined on a case- by-case basis, depending on the severity and nature of the violation.
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