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What is the business code for gambling?

The business code for gambling refers to the classification codes used to categorize gambling businesses for legal and tax purposes. Gambling businesses are regulated activities and are therefore assigned specific codes that identify the type of gambling activity taking place. These codes are used on business licenses, tax forms, and other official documents.

The main business code classification systems used for gambling in the United States are the North American Industry Classification System (NAICS) and the Standard Industrial Classification (SIC) system. Each system has a different code that applies to gambling businesses.

NAICS Codes for Gambling

The North American Industry Classification System (NAICS) is the standard system used by the federal statistical agencies in classifying business establishments for collecting, analyzing, and publishing statistical data related to the U.S. economy.

Under the NAICS, gambling businesses are classified under Code 7132 – Gambling Industries. This industry group comprises establishments primarily engaged in operating gambling facilities or providing gambling services.

Some examples of NAICS codes for gambling businesses include:

NAICS Code Gambling Business Type
713210 Casinos (except Casino Hotels)
713290 Other Gambling Industries
713120 Lottery Ticket Sales
721120 Casino Hotels

So for example, a standalone casino establishment would use the NAICS code 713210 for Casinos, while a hotel with a casino onsite would use 721120 for Casino Hotels.

SIC Codes for Gambling

The Standard Industrial Classification (SIC) system was previously used by government agencies to classify industry areas. It has now been replaced by the NAICS system but SIC codes are still commonly used and referred to.

Under the SIC system, gambling businesses were classified under Major Group 79 – Amusement and Recreation Services. The main SIC code used for gambling establishments was:

– 7993 – Coin-Operated Amusement Devices
– 7994 – Video Tape Rental Stores

So most gambling businesses would use the SIC code 7993 on official documents if SIC codes were required. However, NAICS has now become the standard system for the classification of gambling businesses for legal and tax purposes.

Types of Gambling Businesses and Activities

There are many different types of gambling operations that can be organized as business establishments. Each type of gambling activity may be defined under the business codes in a different way. Some major types of gambling business operations include:


Casinos offer gambling activities such as card games (poker, blackjack, baccarat), table games (roulette, craps), gaming machines (slots, video poker), and sports betting. Large resort casinos also include hotels, restaurants, and live entertainment. Casino businesses employ specialized staff like dealers, gaming managers, accountants, security personnel, and marketing professionals.

Casinos are classified under NAICS Code 713210 for casinos or 721120 for casino hotels. They require gambling licenses and pay taxes on gaming revenue. Many casinos are operated by large corporate entities with multiple casino locations.


Racetracks for activities like horse racing, greyhound racing, and jai alai offer pari-mutuel betting at their facilities. They generate revenue from admissions, event fees, concessions, sponsorships, and gambling handle. Racetracks employ veterinarians, race officials, bet takers, jockeys, and operations staff.

Racetracks with gambling are classified under NAICS 713290 – Other Gambling Industries. Different licenses are required for racetrack and betting operations. Taxes are paid on gambling revenue.


Government-authorized lotteries allow players to bet on random number drawings for a chance to win cash and other prize money. Lotteries operate through networks of retail stores that sell lottery tickets to players. Lottery products include instant scratch tickets and daily/weekly draw games.

Lotteries are classified as NAICS 713290 in jurisdictions where privately owned facilities operate the lottery under a government contract. Government-run lotteries are classified under different public administration codes. Lottery operators require gaming licenses and pay taxes on ticket revenue.

Sports Betting

The sports betting industry consists of bookmakers and sportsbooks that take bets on sports match outcomes, point spreads, and other events. Sports betting can take place through dedicated sportsbooks, racetrack betting sites, casinos, and online/mobile platforms. Operators require gaming licenses and pay taxes on betting revenue.

Sports betting businesses are classified under NAICS codes 713210 for casinos, 713290 for racetrack betting sites, and 721120 for casino hotels that offer sportsbooks. Online sports betting operations use internet publishing codes like 519130.

Poker Rooms

Poker rooms offer card room gaming services for games like poker, blackjack, and other table games. They generate revenue through table fees, food/beverage sales, and tournament entry fees. Poker rooms range from small proprietary rooms to large poker networks like commerce, Maryland Live! poker, and best bet.

Poker rooms are classified under NAICS Code 713210 as a type of casino establishment. Licensing, regulatory, and tax requirements vary by jurisdiction for poker rooms.

Bingo Halls

Bingo halls offer traditional bingo games, electronic bingo, and pull tab games for players to win cash prizes. Many bingo halls are affiliated with charity organizations. Bingo facilities require gaming licenses and pay taxes on revenue from bingo cards and pull tab sales.

Bingo parlors are classified under NAICS 711190 – Other Performing Arts Companies or 713290 for licensed gambling bingo operations. SIC code 7999 – Amusement and Recreation Services, Not Elsewhere Classified is also commonly used.

Arcades and Family Entertainment Centers

Family entertainment centers and arcades offer coin-operated games and entertainment attractions for families. Some centers feature small stakes gambling machines like skill games, redemption games, and crane machines that can award prizes.

These amusement gaming centers are classified under NAICS 713120 -Amusement Arcades or 713940 – Fitness and Recreational Sports Centers if they have diverse attractions like bowling, laser tag, food, and redemption games. SIC 7993 may be used for the coin-operated devices.

Gambling Laws and Regulations

Gambling businesses in the United States are subject to regulation and must comply with federal, state, and local laws on their operations. Some key laws and licensing requirements for gambling include:

State Gaming Commissions

Most states have established gaming boards or commissions that administer gambling laws and regulations in the state. These agencies issue licenses for different gaming activities and oversee regulatory compliance. Gambling businesses must apply for operating licenses and renewals from the state gaming commission.

Required Licenses

Different types of gambling licenses are required for specific activities like casino gaming, sports betting, bingo, poker rooms, lottery retail locations, and supply of gaming equipment. Separate licenses may be needed for managers, employees, manufacturers, and key vendors. Most states do not allow unlicensed gambling businesses.

Operator Taxes and Fees

Gambling taxes are levied on the gross gaming revenue of gambling establishments by the state and sometimes also local jurisdictions. The tax rates vary widely across states from 6% to 50% of gaming revenue. Licensing and equipment fees are also payable to gaming agencies.

Anti-Money Laundering Laws

Gambling operators have to comply with Title 31 anti-money laundering regulations that require recording and reporting of cash transactions over $10,000. Suspicious activities must also be reported to FinCEN.

Internet Gambling Laws

The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibits the operation of unlicensed online gambling sites accepting bets from U.S. players. Online gambling is only legal in a few states that have specifically legalized and regulated it. Offshore gambling sites are illegal.

Indian Gaming Regulatory Act

Tribal casinos and gaming activities are overseen by the National Indian Gaming Commission and regulated through compacts between tribes and states. Indian lands are exempt from many state gambling laws.

Taxation of Gambling Businesses

As gambling involves significant wagering and earnings, gambling businesses are subject to specialized taxes and reporting requirements.

Federal Excise Taxes

A federal excise tax of 0.25% is levied on the gross gaming revenue of licensed gambling businesses under IRC §4461. This includes revenue from casinos, lotteries, pari-mutuel wagering, and other wagering. Operators must report and remit excise taxes annually.

Federal Income Taxes

Gambling businesses must report gambling proceeds on their federal income tax returns. On Form 1120 filed by corporations, gross receipts or sales are reported, and then prize payouts and operating expenses are deducted to arrive at taxable income.

Withholding Taxes

For certain types of gambling winnings paid to players like lottery prizes, bingo winnings, and slot machine jackpots over $5,000, gambling operators have to withhold federal income taxes at a flat 24% rate under IRC §3402. The withholding taxes are remitted using Forms 945 and W-2G.

State Gambling Taxes

Most states impose dedicated gambling taxes on the gross gaming revenues of licensed gambling facilities and operators in the state. The tax rates vary from 6% to 50% across different states. Casino taxes account for large proportions of state budgets.

Local Gambling Taxes

Some jurisdictions like cities and counties also charge gambling taxes on casinos and card rooms located there. Local gambling taxes are in addition to state taxes and also vary between locations.

IRS Reporting Requirements

Gambling operators have additional IRS reporting requirements on winnings paid to players. Casino winnings over $600 must be reported to the IRS using Form W-2G. Suspected money laundering and other illegal activities may need to be reported.

Accounting Standards for Gambling

Casinos and other gambling businesses have specialized accounting needs due to their handling of large cash transactions and focus on gaming revenue. Some accounting standards that apply to gambling operators include:

Revenue Recognition

For casinos, gaming revenue is recognized only when tokens are redeemed, not when played. Liabilities are recorded for chips and customer loyalty points outstanding. Jackpots are accrued as they are won.

Gaming Reserves

Reserves must be maintained for winning wagers on unsettled bets, unpaid jackpots, and customer loyalty points. These reserves are deducted from gross gaming revenue for tax purposes.

Cash Handling

Stringent controls are implemented over cash operations like the casino cage, count room, and slot machine drops. Gambling auditors closely examine cash processes.

Receivables and Credit Evaluation

Extending casino credit requires careful customer credit checks and assessments of creditworthiness over time. Uncollectible patron debts are deductible operating losses.

Jackpot Insurance

Large jackpots offered on slot machines and lotteries may be insured with specialty insurers to manage and spread the risk of big payouts. Jackpot insurance premiums are deductible expenses.

Adherence to applicable accounting standards and controls provides increased accuracy, reduces fraud risk, and generates information for sound gambling business decisions.


Gambling businesses require specialized licenses, comply with defined regulations, report to gaming agencies, pay gambling taxes, and follow accounting standards for the industry. The primary business code classifications used in the United States for categorizing gambling establishments are NAICS and SIC codes.

Under NAICS, gambling businesses are identified by codes 713210 for casinos, 713290 for other gambling like racetracks and sportbooks, 713120 for lottery retailers, and 721120 for casino hotels. Different types of licenses are mandated for each gambling activity.

Federal and state gambling taxes apply to gross gaming revenues. Operators also have to fulfill IRS reporting obligations on payments to players. Strict controls and accounting standards address the complex revenue and cash needs of the gambling industry. Use of the appropriate business codes and compliance best practices enables gambling establishments to operate legally within their regulated environment.