Monday, May 9, 2005 | 10:48 a.m.
Within weeks, Nevada gaming regulators have a decision to make: amend the state's financial reporting and recordkeeping provisions to mirror new federal standards or abandon the state regulation completely and let federal agents take over all cash transaction oversight of the state's casinos.
Either way, scores of Nevada licensees that previously were not affected by state regulations to combat money laundering will be required to file transaction reports.
The change is necessary due to provisions adopted in the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act -- commonly known as the USA Patriot Act.
The Patriot Act has a timetable for compliance to federal reporting standards and an important deadline for Nevada is July 1.
The state Gaming Control Board brought the matter before the public last week and will schedule additional sessions involving members of the Nevada Gaming Commission in the weeks ahead.
Control Board members indicated they are leaning toward repealing their own rules -- known in the industry as Regulation 6A -- and reluctantly letting federal agents from the Financial Crimes Enforcement Network and the Internal Revenue Service step in.
"I would question the timeline it would take for them (federal agents) to get up to speed on this," said board member Bobby Siller.
He added that he believes Nevada's existing regulatory process provides better real-time intelligence against money-laundering than what federal agents could provide.
Siller said he didn't think the proposed federal regulatory environment would have caught the state's only convicted Regulation 6A violator as fast as Nevada authorities did.
Former Mirage casino employee Christopher Morishita, whose job duties included mailing cash transaction reports to the federal government, was arrested by Gaming Control Board agents in May 2003. His August 2003 guilty plea was tied to an agreement that he receive probation and no jail time.
The Nevada Gaming Commission fined the Mirage $5 million for failing to file anti-money-laundering reports.
Finance officers from several major casino companies that attended last week's Gaming Control Board meeting observed the discussion and a few concurred that they would prefer state oversight to federal.
"We prefer working with the Gaming Control Board (agents) because of the relationship with have developed with the audit division," said Peggy Jacobs, executive director of casino accounting and casino controller at the MGM Grand.
Provisions of the Patriot Act require that Nevada regulators decide by July 1 whether they will repeal Regulation 6A or amend it to mirror the federal rules. Whichever direction regulators head, the federal rules have a timetable that concludes with Nevada licensees under new regulations by 2006.
There are three major changes ahead for licensees as a result of revisions to rules that have been in effect since 1985.
It was in that year that the Gaming Control Board and the Nevada Gaming Commission entered into an agreement with the U.S. Department of the Treasury exempting Nevada casinos from cash reporting and recordkeeping requirements of Title 31 of the Bank Secrecy Act.
The 20-year-old agreement allowed that exemption as long as the state regulatory system, established in Regulation 6A, met the requirements of the Bank Secrecy Act.
That changed when the Patriot Act was adopted with new requirements and the Financial Crimes Enforcement Network -- known as FinCEN -- began reviewing Nevada's rules in May 2003.
FinCEN, which was attempting to develop a consistent treatment of casinos nationwide, found three primary differences between the federal Title 31 rules and Nevada's Regulation 6A rules:
archive
