Capital Lease is lease that has the economic characteristic of asset ownership. It can be classified as purchase by the lessee. The lease term will be nearly the estimated life of the property and the lease payments will be nearly the fair market value of the property. In this kind of lease, ownership may be transferred to the lessee at the end of the lease term.
Following is an example for a state statute (Nevada) [Nev. Rev. Stat. Ann. � 463.0139] defining the term Capital lease in relation to gaming :Capital lease means a bailment, lease or similar transaction in which:
1. The lease is in writing;
2. The writing includes the names and addresses of the lessor and lessee, the term, amount of rental payments, a specific list of the leased equipment and details of any rights which the lessee has to extend the term or to acquire the leased equipment during the term or at the expiration of the term including any renewals of the original term;
3. The lease serves as the functional equivalent of an extension of credit by the lessor to the lessee;
4. The leased equipment was acquired by the lessor specifically for a leasing transaction; and
5. The lessor is a national banking association that is authorized to do business in this state, a banking corporation formed or regulated under the laws of this state or a wholly owned subsidiary of such a banking association or corporation that is formed or regulated under the laws of this state.