Gaming Commission weighs money-laundering regulations

Friday, May 20, 2005 | 11 a.m.

Nevada gaming regulators on Thursday took another step closer to scrapping its Regulation 6A financial reporting requirements in favor of federal rules to be used nationwide.

Members of the Nevada Gaming Commission hope the state can maintain some of the specific requirements of Regulation 6A -- a state standard designed to prevent money laundering. But they concurred with state Gaming Control Board members that it is in the state's best interest to adhere to federal Bank Secrecy Act regulations that are being implemented nationwide.

Following a conceptual discussion after which no vote was taken, commissioners said they agreed with the state Gaming Control Board's assessment that state resources would be better used on tax and compliance audits and not duplicating federal efforts on money laundering. State officials estimate that 13,000 man hours a year are devoted to money-laundering issues.

State Gaming Control Board Chairman Dennis Neilander said the commission's discussion on the matter Thursday has given him enough direction to develop a new regulation that would give federal oversight to the Internal Revenue Service and the Financial Crimes Enforcement Network on anti-money-laundering actions.

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.

Provisions of the Patriot Act require that Nevada regulators decide by then 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:

Neilander said it would be "better to have one (set of regulations) or the other and not a combination of both."

During the meeting, Commissioner Arthur Marshall said he had some discomfort with federal officials overseeing cash reporting by casinos, fearing that they might want to expand their role in what has been a state matter. After the meeting, he clarified that he just wanted to get details of the federal oversight proposals and that he likely would support the Regulation 6A changes.

In other business Thursday, the commission: