With marijuana now available via dispensaries, the American Gaming Association wants clarity as how money from weed sales should be handled.
Last week, the Secretary of the Treasury Steven Mnuchin received a letter from Geoff Freeman, the CEO and President of the American Gaming Association. Freeman sent the letter to receive guidance as to how the gaming industry should be handling their financial reporting obligations, staying in compliance as based on 2014 guidelines issues when handling money connected to the retail industry.
On the 1st of last month, Nevada became the latest state in the US to allow marijuana to be sold and consumed legally. However, on a federal level, pot is still illegal. This creates a few problems for casinos, venues that are expected to know the personal details of their consumers, in particularly knowing where their income is coming from.
Suspicious Activity Reports
In the letter, Freeman was particular on what the AGA needed clarity on, including guidelines in regards to suspicious activity report filings. These reports are to be filled out when casinos feel the transactions are linked to business involving marijuana. This is not just for Nevada but also other states in the US. Freeman also pointed out that there is a disconnect between the federal ban on the substance as well as legalization efforts by states. Financial institutions along with casinos are continuing to be presented with complexities as well as challenges due to the disconnect of federal and state law.
Freeman sent the letter to the Treasury Department as a response to when the department requested information about regulatory burdens that financial businesses are facing. Freeman stated that casinos need to know how they should use the marijuana guidance from 2014 when filing suspicious activity reports on those who have gaming funds that appear to come from businesses related to the marijuana industry.
What is the 2014 Guidance?
The guidance from 2014 that Freeman has referred to is a document created by the United States Treasury Financial Crimes Enforcement Network. This document provided insight as to how the financial organizations operating in the US needed to create reports for large sums of cash that appeared to be connected to marijuana. According to Freeman, the gaming venues face even more burden as they have to meet their own requirements to stay in compliance with anti-money laundering regulations.
As far as casino regulations are concerned, the Nevada Gaming Control Board made an announcement in 2014 as the federal guidelines were created and as medical marijuana was rapidly growing. The Board stated that federal laws still apply and gaming interests were reminded that they would be putting their licensing at risk if they become involve with the marijuana industry.
If bets are taken from an individual who works in the marijuana industry, the casino would be technically violating the law. So, what are casinos to do if the individual is legally allowed to operate a marijuana business in the state?
Freeman has suggested that the Treasury think about updating the regulations that currently require casinos to report transactions that are higher than $10,000. This amount was set back in 1972. Freeman pointed out that this is a heavy burden that casinos undertake when considering a 24 hour gaming day. Freeman would like to see the amount increased to $60,000.
For now, casinos are stuck with the additional burdens and trying to figure out if they should allow gambling by those who are associated with the new marijuana industry in the state.