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Institutional investors may soon get the chance to place a bigger bet on black in Nevada's capital-starved casino industry.

Nevada gaming regulators are weighing a proposal that would allow institutional investors to acquire greater stakes in public casinos without going through an onerous licensing process that can cost hundreds of thousands of dollars and take up to a year to complete.

Currently, institutional investors fly under the gaming-license radar if they keep stakes in publicly traded casino companies at 15% or less. However, Frank Schreck, a Las Vegas gaming attorney whose clients include Wynn Resorts Ltd. (WYNN) and Harrah's Entertainment Inc. (HET), has put forth a proposal to grant waivers for stakes of up to 25%.

"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 told Dow Jones Newswires.

Institutional investors include banks, insurance companies and a slew of funds. Typically, two-thirds of daily trading in U.S. equities markets is done on behalf of institutional investors.

Schreck spearheaded regulation in 1992 that allowed institutional investors in a restructuring to convert debt to equity without having to be licensed if they were granted a waiver in Nevada. In addition, he successfully petitioned Nevada regulators to raise the investment stake for waivers to 15% from 10% for institutional investors.

"Certainly the original institutional investor provision going from 10% to 15%...was very good for the state and the industry," he said. "It was a new source of capital that didn't exist."

Mike LaBadie, chief of the corporate securities division for Nevada's Gaming Control Board, said Schreck's new proposal will likely be addressed at a public workshop before going to the state's gaming board and commission for approval. He said the time frame of the approval process is uncertain, but could take a couple months or longer, depending on logistics.

The move to find new or larger investments comes at a time when concerns about unsustainable debt burdens and severe declines in consumer spending have ravaged casino stock values of the industry titans like MGM Mirage (MGM) and Las Vegas Sands Corp. (LVS).

Bill Lerner, a gaming consultant at Union Gaming Group, said the licensing requirement "has historically been a barrier for some institutional investors to take larger stakes in gaming companies. Given the inherent nature of the licensing process and the commitment associated with it...if it were removed, I think that you might see some more concentrated ownership in the gaming companies, simply because it's easier to do so."

Schreck said the definition of institutional investor may also need to be broadened to allow other companies that aren't federally regulated to invest more.

-By A.D. Pruitt, Dow Jones Newswires; 201-938-2269; angela.pruitt@dowjones.com