Nevada Considers Allowing Larger Gaming Investments by Funds
Nevada regulators are debating whether to loosen existing rules and permit institutional investors to control larger portions of casino gambling operators. A proposal has been made to lift the maximum ownership of a publicly traded gaming company from fifteen to twenty-five percent.Frank Schrek, an attorney who has represented Wynn Resorts and Harrah's Entertainment, asked that the corporate securities division of the state Gaming Control Board consider the adjustment. Schrek has been instrumental in previous changes in gaming investment rules, including the adjustment from ten to fifteen percent as the institutional ownership max.
"Now that the breadth of investor has expanded tremendously, especially when you start considering private equity, this takes some of the old reluctance away that used to be there for investing in gaming," Schreck said.
Investors restricted as institutional include banks, most funds, and insurance companies, all of whom have extremely large sums to invest. The law is designed to prevent excessive ownership by what should be a diversified source, but present economic conditions mean casino operators want any investment money available.
"Certainly the original institutional investor provision going from 10% to 15% was very good for the state and the industry," Schrek said. "It was a new source of capital that didn't exist."
And right now, new sources of capital are the most desperate need for Nevada gambling operators.
