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Rod Smith

New Law Disturbs Gaming Industry, Casinos Could be Forced to Surrender Financial Records

16 December 2003

Gaming industry executives and civil liberties supporters Monday expressed concern about a new law that makes it easier for FBI agents to demand financial records from casinos and other businesses.

"Protecting our customers' privacy is always one of our most important concerns," Park Place Entertainment Corp. spokesman Robert Stewart said. "Obviously, here we will have an obligation to obey the new law, and we will be doing our best to strike the right balance between these obligations."

The legislation signed into law by President Bush on Saturday expands the number of businesses that the FBI and other U.S. authorities conducting counter-terrorist intelligence can demand financial records from without seeking court approval.

University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said a major problem with the new law for Las Vegas is that it could discourage visitors from coming to Nevada.

"We had this Bill Bennett situation, and many more of those high rollers won't come here any more if there's another one," he said.

Bennett, a former Cabinet secretary and "The Book of Virtues" author, in May was outed in The Washington Monthly for losing more than $8 million playing slot machines in Las Vegas and Atlantic City casinos over the past decade.

Previously, casino companies generally released such private information only under subpoena, but under the new law, they will be required to release it if "national security letters" are issued by federal investigators.

"By policy, in the past we've required a court order or some other legal document before releasing this information," said MGM Mirage spokesman Alan Feldman.

The new law provides for no court review when such information is demanded by investigators.

Gary Peck, executive director of the Nevada Chapter of the American Civil Liberties Union, called the new law another example of "government overreach."

"There is very little reason for federal investigators to need the records (of most individual casino company customers)," he said.

The new law applies to broad categories of businesses, including nontraditional financial companies such as casinos, and to traditional financial institutions such as banks and credit unions.

The measure mirrors the Patriot Act, which for the first time defined financial institutions to include casino operators and other businesses that deal with large amounts of cash.

Gaming industry critics and civil liberties advocates said the change does not offer enough safeguards to ensure that authorities will not violate the privacy of innocent people.

"(The new law) lets government look at individuals' records without oversight. It's distressing not just for casinos, but for everybody," said state ACLU chapter general counsel Allen Lichtenstein. "While there may be legitimate needs for the information, this is an erosion of the checks and balances protecting individuals' civil rights and privacy."

Station Casinos spokeswoman Lesley Pittman said her company hopes "this new power will be used responsibly," although it intends to cooperate with "any request that may come our way."

However, Feldman said, "At this point the only way to change (the new law) is to have actual instances of misuse. We'll have to see if that happens and we'll be monitoring the situation."

Most details of the new act authorizing the intelligence programs are secret, including the total cost of the programs, which is estimated to be $40 billion.

The Associated Press contributed to this report.