Gambling is legal under United States federal law so every state has the right to allow or prohibit such activity. Many states allow charitable gaming and lotteries, while fewer states allow commercial and racetrack gambling. State gaming licenses are often administered and overseen by the state gaming commission.
Gaming license application processes are highly detailed. Most applications require background checks and subsequent investigations. Licenses are often issued for specific types of activities, in certain places, and at certain times. Common types of licenses are for casinos, racing, lottery, charitable gaming, and sweepstakes.
Businesses functioning without the proper license are generally penalized based on the size of the operation and the gravity of the offense.