NGCB Considers New Money-Laundering Regulations

by Kyle Miller

The Gaming Control Board of Nevada have discussed new ways to strengthen regulations for money laundering in the state in regards to sports books.

On Thursday, the Nevada Gaming Control Board completed a workshop discussing ways to strengthen regulations in regards to sports books in the state and money laundering. The meeting was scheduled due to a petition by a licensee and board members talked about concerns of a proposal that would place additional measures on money-laundering regulations in the state. Mesquite Gaming is the licensee in question and board members were worried that the petition and proposal were made by the company based on competition.

Mesquite Gaming Request

Mesquite GamingMesquite Gaming representatives met with regulators of the state during the workshop to discuss how they would like to see a loophole closed that involves payouts of sports wagers that are over $10,000 from satellite sports books that exist in rural areas of the state. Mesquite Gaming’s Vice President of Security and Government Affairs, Richard Tomasso, stated that the issue was created when the state and the gaming board decided to follow federal policies of the Financial Crimes Enforcement Network. This took place some ten years ago.

The procedures of FinCEN do not have policies on satellite sportsbooks that bring in under $1 million in annual gross gaming revenues. These sports books do not have to file forms for cash wagers within the Internal Revenue Service as well as no requirement being in place for payouts in amounts of $10,000.

In a letter to regulators over the summer, Catherine Catanzaro, the Corporate Compliance Officer for Mesquite Gaming, stated that the company believes that the current practice for satellites to be exempt from reporting such winnings of $10,000 or more is considered money laundering. This increase the potential risk for criminal activity via third-party betting as well as interferes with law enforcement efforts to identify such activities. Catanzaro further stated that such activity could potentially damage the gaming integrity of the state.

Closing the Door On Criminal Activity

Tomasso testified during the workshop yesterday and stated that state regulations with revision would be able to close the back door and leave criminal activity out. Attorneys for the Control Board were on hand and proposed revisions to Regulation 22 which involves race books as well as sports pools instead of making new regulations.

Several board members questioned Mesquite Gaming representatives including A.G. Burnett, Terry Johnson and Shawn Reid. After questioning it was believed that the company had further motivations to see the regulatory changes take place. The company has a competitor, the Eureka Hotel and Casino. This property offers a satellite sports book that takes in less than $1 million in sports wagers each year. This facility is operated by William Hill’s United States extension.

William Hill representative Attorney Scott Scherer stated that the problem of Mesquite Gaming should be within the Bank Secrecy Act of 1985 and FinCEN and not with regulators of the state. According to Scherer, the money laundering aspect is about risk assessment and there is not enough sports wagering of layoff and third-party organizations taking place for criminal activity such as money laundering to take place. The bookies of such companies are also trained to check for ID during large transactions and those who place large wagers have to fill out more paperwork as well as verify their social security number.

The attorney has urged the Nevada Gaming Control Board to reject the petition by the Mesquite Gaming company. The company has also sent a letter of their petition to FinCEN which is located in Virginia. The proposal will now be reviewed by the Tax and License and Audit divisions but will not be placed on the future meeting of the board.