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Howard Stutz
 

Regulators Move to Drop Anti-Money Laundering Law

13 July 2006

NEVADA –- Nevada gaming authorities took initial steps Wednesday toward repealing the state's anti-money laundering regulation, saying they will turn that aspect over to the federal government.

After more than a year of discussion, Gaming Control Board members said they expect to remove Regulation 6A from the books by next July.

The three-member board plans to vote on repealing the regulation during its meeting next month in Carson City. The Nevada Gaming Commission will then have the opportunity to follow suit.

"This is the fifth time we've calendered this item for discussion," Gaming Control Board Chairman Dennis Neilander said before the start of the hearing. No one from the audience, however, had comments on the matter.

Neilander said most of the casino industry representatives that he has discussed the proposed change with had not expressed a strong sentiment one way or the other about repealing the regulation.

Neilander said it will take at least the rest of this year and the first six months of 2007 for casinos to switch to reporting large cash transactions with the federal requirements.

He said the University of Nevada, Las Vegas' International Gaming Institute and the Internal Revenue Service have been contacted about developing programs to help educate casino audit and financial departments on the federal requirements.

Under Regulation 6A, implemented in 1985, casinos are required to track all cash transactions of $3,000 or more and submit currency reports to the US. Department of Treasury Department whenever transactions by an individual total more than $10,000 in a 24-hour period.

However, Title 31 of the Bank Secrecy Act was boosted by the Patriot Act and classified casinos as financial institutions, lumping their regulation for large cash transactions under the Treasury Department's Financial Crimes Enforcement Network.

Under Title 31, all casinos with $1 million in annual gross gaming revenue would be subject to reporting large cash transactions. Regulation 6A requires casinos with $10 million in annual gaming revenues to report cash transaction activity.

If Nevada wanted to keep Regulation 6A on the books, the matter would become problematic for gaming regulators. The number of casinos reporting under Regulation 6A is 115 and would increase to 260 if the state mirrored the federal guidelines.

"It would double the burden on the state when you have a 130 percent increase in the number of casinos that fall under the Regulation 6A reporting requirements," said Gaming Control Board member Mark Clayton.

He said the man hours currently spent by the control board's staff on Regulation 6A matters could be switched to shorten the time the division new takes to handle taxation audits.

Control board members said after the brief hearing they weren't concerned about turning a small portion of gaming regulation, normally handled on the state level, over to the federal government. Large money transactions by casinos in some 40 states are already overseen by the Treasury Department. Nevada gaming companies operating casinos outside the state are already used to working with federal authorities

In addition, a few years ago federal authorities took suspicious activity reporting away from Nevada regulators.

Regulators Move to Drop Anti-Money Laundering Law is republished from CasinoVendors.com.