Former Nevada Labor Commissioner Michael Tancheck had determined the policy was legal because Wynn Resorts Ltd., which operates the Wynn and Encore casinos on the Strip, neither kept the tips for its own use nor gained a direct benefit.

Cory set aside that decision, instead ruling that the tip-pooling policy directly benefit Wynn.

"Quite simply, the Nevada Supreme Court has never allowed a mandatory tip-pooling policy that extends beyond the dealer-only pool," Cory wrote.

Wynn appealed, and the justices on Thursday disagreed with the district judge.

"We hold that the district court erred in overturning the labor commissioner's decision because the Wynn did not keep any of the tips from the pool," Justice Michael Douglas wrote for the court. "Rather, the Wynn distributed the money among its employees."

The justices said state law prohibits an employer from taking and keeping an employee's tips, "but the statute does not prohibit a tip policy that splits the tips among the employees."

Anger over the tip-sharing policy led to unionizing efforts by dealers at Wynn, who voted for collective bargaining representation in 2008 through the Transport Workers Union of America. The union approved a 10-year contract in 2010 that included tip sharing, but a group of dealers sought to eliminate it.

Unresolved are whether the policy violates other statutes concerning labor and compensation that Cory did not address after determining the policy was illegal.

The Supreme Court remanded those issues back to the lower court for further review.