Nevada Gaming & Casino Insurance

Nevada's gaming industry is the largest in the United States, and insurance producers must understand the specialized coverage needs of casinos, gaming establishments, and related businesses.

Nevada Gaming Industry Overview

Industry Significance

Economic Impact:

• Gaming generates over $14 billion in annual revenue
• Largest industry in Nevada by employment
• Las Vegas Strip, Downtown, and regional casinos
• Includes casinos, sports books, poker rooms, and gaming device operators

Regulatory Framework:

• Nevada Gaming Control Board (NGCB) regulates all gaming
• Gaming Commission makes final licensing decisions
• Strict licensing requirements for operators and employees
• Insurance requirements may be condition of licensure

Exam Tip: The Nevada Gaming Control Board (NGCB) is the primary regulator of gaming in Nevada. Insurance producers working with gaming clients should understand that the NGCB may impose specific insurance requirements as conditions of gaming licenses.

Types of Gaming Operations

Resort Casinos:

• Las Vegas Strip properties (large integrated resorts)
• Include hotels, restaurants, entertainment venues
• Multiple gaming licenses per property
• Complex insurance needs

Standalone Casinos:

• Downtown Las Vegas, regional locations
• Smaller scale but similar exposures
• May be part of larger gaming companies

Restricted Gaming:

• Slot routes (machines in bars, convenience stores)
• 15 or fewer gaming devices
• Limited stakes gaming
• Smaller insurance requirements

Non-Restricted Gaming:

• More than 15 gaming devices
• Full casino operations
• Higher regulatory scrutiny
• Comprehensive insurance requirements

Essential Gaming Insurance Coverages

1. Gaming Liability Insurance

Coverage:

• Liability arising from gaming operations
• Player disputes and injuries
• Dealer errors claims
• Machine malfunction liability
• Jackpot disputes

Key Exposures:

• Patron injuries on gaming floor
• Slip and falls (casino floors often wet near bars)
• Assault/battery by other patrons
• Theft of patron property
• ADA compliance issues

Coverage Limits:

• Small casinos: $1-5 million
• Large resort casinos: $50-100+ million
• Umbrella coverage commonly used

2. Crime and Fidelity Coverage

Essential for Gaming Operations:

Employee Dishonesty:

• Theft by employees (dealers, cage personnel, security)
• Cash handling positions especially vulnerable
• Large limits required ($1-10+ million for large casinos)
• Background checks reduce but don't eliminate risk

Third-Party Crime:

• Robbery and burglary
• Chip theft
• Armed robbery of cage/vault
• Counterfeiting (chips and currency)

Computer Fraud:

• Manipulation of gaming systems
• Unauthorized access to financial systems
• Cyber theft of funds
• Growing exposure for online gaming components

Exam Tip: Crime/fidelity coverage is CRITICAL for casinos due to high cash volumes. Limits of $1 million to $10+ million are common depending on casino size. Employee dishonesty is a major exposure.

3. Cage and Vault Insurance

Specialized Coverage:

What It Covers:

• Cash held in casino cage
• Chips and tokens
• Markers (credit instruments)
• Securities and valuables in vault
• Transit of money to/from casino

Typical Coverage Amounts:

• Based on maximum cash/chips on hand
• Large casinos may hold $10-50+ million
• Coverage limits match exposure
• Often excess coverage layered

Key Policy Features:

• Coverage on/off premises
• Armed robbery coverage
• Employee theft (may be separate policy)
• Mysterious disappearance (limited)
• Transit coverage to banks

4. Gaming Equipment Coverage

Covered Property:

• Slot machines and video gaming devices
• Table games equipment
• Surveillance systems
• Player tracking systems
• Cash handling equipment

Special Considerations:

• High value equipment ($5,000-$100,000+ per slot machine)
• Technology changes rapidly (depreciation concerns)
• Business interruption if equipment fails
• Equipment breakdown coverage recommended

Valuation Methods:

• Replacement cost preferred
• Actual cash value on older equipment
• Agreed value for specialized equipment

5. Liquor Liability (Dram Shop)

Nevada Law and Casino Exposure:

Nevada's Limited Dram Shop Liability:

• Nevada law provides more protection to servers than many states
• Generally, no liability for serving intoxicated adults
• Exception: Serving to obviously intoxicated person

Casino-Specific Concerns:

• 24-hour alcohol service on gaming floor
• Complimentary drinks to gamblers
• Multiple bars and restaurants per property
• Entertainment venues with alcohol
• Sports book with bar service

Coverage Needs:

• Separate liquor liability policy or endorsement
• Excluded from standard CGL
• High limits recommended ($1-5 million)
• Defense costs coverage essential

Exam Tip: Nevada has more limited dram shop liability than most states, but casinos still need liquor liability coverage. The 24-hour nature of gaming operations increases exposure.

6. Directors & Officers Liability (D&O)

Critical for Gaming Companies:

Why D&O is Essential:

• Gaming Commission regulatory actions
• Securities law exposure (publicly traded casinos)
• Derivative lawsuits from shareholders
• Regulatory investigations
• Compliance failures

Key Coverages:

• Side A: Direct coverage for individuals
• Side B: Reimbursement to company for indemnification
• Side C: Entity coverage (for securities claims)
• Regulatory investigation costs
• Crisis management coverage

Unique Gaming Exposures:

• Loss of gaming license (catastrophic event)
• Key person exclusions
• Regulatory settlements
• Anti-money laundering compliance

7. Workers' Compensation

Nevada WC for Gaming:

Mandatory Coverage:

• All Nevada employers with employees must have WC
• Gaming operations typically have large workforces
• Multiple job classifications

Gaming-Specific Classifications:

• Dealers/croupiers
• Security personnel (higher rates)
• Food and beverage workers
• Housekeeping
• Entertainment performers
• Administrative staff

Premium Considerations:

• Experience modification factor
• Safety programs can reduce premiums
• 24/7 operations increase exposure
• Security staff higher risk classification

Additional Gaming Coverages

Terrorism Insurance (TRIA)

Terrorism Risk Insurance Act:

• Federal terrorism coverage backstop
• Casinos are potential terrorism targets
• High-profile Las Vegas properties
• TRIA coverage recommended

Coverage:

• Certified acts of terrorism
• Covered under TRIA program
• Insurer deductibles and federal backstop
• Property and business interruption

Cyber Liability

Growing Casino Exposure:

• Customer data (player's club information)
• Credit card processing (massive volumes)
• Ransomware attacks
• Loyalty program databases
• Sports betting customer information

Coverage Components:

• Data breach response
• Notification costs
• Credit monitoring
• Regulatory fines (where insurable)
• Business interruption from cyber event

Entertainment Venue Coverage

For Casino Entertainment:

• Concert venues and showrooms
• Special events coverage
• Performer injury/illness
• Event cancellation
• Crowd management liability

Business Interruption

Critical Gaming Coverage:

• Loss of gaming revenue if operations interrupted
• Dependent property coverage (if supplier issue affects operations)
• Extended period of indemnity (gaming recovery can be slow)
• Contingent business interruption

Key Considerations:

• High daily revenue exposure ($1 million+ daily for large casinos)
• Extended interruption after major loss
• Regulatory requirements to reopen
• Customer confidence recovery

Exam Tip: Business interruption coverage is essential for casinos. A single day's lost revenue can exceed $1 million for large properties, and recovery after a major loss can take months.

Insurance Buying Considerations

Specialized Markets

Gaming Insurance Markets:

• Not all insurers write gaming business
• Specialized gaming underwriters
• Lloyd's of London syndicates
• Excess and surplus lines markets
• Large capacity required

Common Policy Packages

Integrated Gaming Program:

• Property and business interruption
• General liability
• Liquor liability
• Crime/fidelity
• Workers' compensation
• Umbrella/excess liability
• D&O liability
• Cyber liability

Typical Premium Considerations

Rating Factors:

• Gaming revenue (primary exposure base)
• Square footage
• Number of employees
• Number of gaming devices
• Hotel rooms (if resort casino)
• Loss history
• Security measures
• Risk management programs