It seemed only natural after Nevada voters authorized the recreational use of marijuana in 2016 that the Silver State’s biggest and newest “sin industries” would one day overlap.
But as for any potential relationship between Nevada’s casino and cannabis industries, experts say that at least in the near future, it’s a full stop.
Because cannabis is still classified as a Schedule 1 substance by the Drug Enforcement Agency — putting it on the same level as heroin and LSD — state gaming regulators have told all licensees to keep their distance from the state’s growing cannabis business. The Biden administration announced plans earlier this year to reclassify marijuana, easing restrictions but not outright legalizing it for recreational use.
Legally, a person can only consume cannabis on private property, such as a residence, or in a licensed consumption lounge. A casino floor is not a legal place to light up.
UNLV’s Cannabis Policy Institute and the International Gaming Institute hosted a two-hour seminar on the potential convergence of cannabis and gaming on Tuesday, where experts said that any changes leading to a business relationship between the two industries are still far down the road.
“We’re going to follow the directives of our regulators, and I just don’t see much movement until they change the [federal] laws (surrounding cannabis),” gaming attorney Jennifer Roberts said.
She said the federal ban on marijuana has a stronger hold over the gaming industry than any potential revenue that could be created by joining with the cannabis industry.
But not everyone is convinced that a future where the industries work together is a long way off.
Clark County Commission Chairman Tick Sergerblom said the casino industry can’t ignore the tourism associated with cannabis. The two consumption lounges approved to operate in the state are close to the Strip resort corridor. Smoke and Mirrors inside the Thrive Cannabis Dispensary is across the street from a back entrance to Resorts World Las Vegas. Dazed! is inside the Planet 13 dispensary in an industrial area west of the Strip.
“We need to get people ready for the inevitable,” said Segerbloom, a longtime cannabis legalization advocate. “And it’s inevitable that gaming will get involved.” He suggested casinos could lease out space to a cannabis business similar to a resort’s relationship with restaurant operators.
“I talk to the operators all the time,” Segerblom said. “They have room set up to do this. They’re all ready to go. They’re just waiting for the first person to jump in.“
Roberts compared the position of Nevada gaming regulators toward cannabis in a similar way to how federal intervention in the 1960s over mob influence on the casino industry led to the creation of the state’s “Gold Standard” gaming regulatory structure.
Nevada set up a similar regulatory framework for cannabis after the 2016 vote to legalize the substance for recreational use.
And since then, the industry has flourished. There are more than 100 retail cannabis dispensaries throughout the state, and the Nevada Cannabis Compliance Board has licensed two consumption lounges, where people can go to socialize and legally consume cannabis.
Smoke and Mirrors cannabis lounge, seen on April 4, 2024, is near the Las Vegas Strip. (Jeff Scheid/The Nevada Independent)
According to the Nevada Cannabis Association, tax revenue provided to the state in fiscal 2023 included $53 million in wholesale taxes, $80 million in retail taxes and an estimated $68 million through sales taxes. As a comparison, gaming taxes in fiscal 2024 topped $1 billion, according to the Gaming Control Board.
Bob Hoban, a cannabis attorney from Denver, suggested cross-ownership between casinos and cannabis could also be in the future.
But those ideas were shot down by Roberts, who didn’t believe state gaming regulators would be accepting of those arrangements until changes happen at the federal level.
She recalled having a client who, soon after cannabis was legalized, had to give up his small gaming business because of his financial involvement with a dispensary.
“A slot route operator can’t provide games to a facility where this is cannabis,” she said. “You’re not going to risk your gaming license.”
Problem gambling and cannabis
So what happens when you mix gambling with marijuana?
During the seminar at UNLV, responsible gaming researcher Jeff Marotta said that the use of marijuana could exacerbate the habits of someone already predisposed to problem gambling. A study he conducted in Oregon found that 30 of cannabis users who gambled had a gambling disorder. Marotta warned, however, that research into how cannabis affects gambling decisions is still in the early stages.
Chris LaPorte, whose cannabis hospitality management company helped open the state’s first consumption lounge earlier this year in Las Vegas, asked Marotta if his research had examined the role that alcohol played in problem gambling when combined with marijuana.
Marotta said he has studied the effects alcohol abuse has on a person’s gaming habits, but not when combined with cannabis, leaving more room for further research.
Researchers, along with Marotta, conducted the study in Oregon, one of the first states to legalize recreational use of cannabis. The state also operates a lottery, online sports betting and has tribal casinos. Marotta said 57 percent of gamblers surveyed said they also use cannabis.
“The combination of gambling and cannabis use does present some risks,” he said, noting that Oregonians who gambled and used cannabis were twice as likely to report gambling two or more times per week than someone who gambled and did not consume cannabis.
It will awhile – and some softening of federal of marijuana laws – for Nevada’s growing legal cannabis business and the casino industry to overlap. Read More
