Playing the Odds: The Realities of State-By-State Suitability Determinations and the Need for Federal Regulation

Abstract

With some exceptions, gaming in the United States is a growth industry. While commercial casino revenue peaked in 2007, followed by a sharp decline at the height of the Great Recession, in 2012 national gaming revenues reached the second highest level in history. Not only has the rebound translated into increased revenues, employment rates, and economic development, it has also led to sharp increases in gaming tax revenue for the vast majority of states that permit commercial casinos – most notably in Kansas, Maryland, Maine, and New York. While gaming heavily impacts interstate commerce, the industry is still governed by a patchwork of inconsistently applied state laws. These inconsistencies are especially prevalent in state-by-state suitability determinations in which state regulators may disagree about the suitability of a single casino applicant or otherwise make conflicting determinations of similarly situated applicants. These inconsistencies, coupled with the lack of meaningful judicial review, have caused uncertainty for would-be applicants and necessitates meaningful federal reform.