Earlier this month a Pentagon audit report showed that over a million dollars was spent by Department of Defense (DoD) credit card holders on adult entertainment including casinos. In response to the information and public outcry, the Inspector General of the DoD, Jon T. Rymer has proposed a policy that would ban the use of government cards at casinos. The American Gaming Association (AGA) doesn’t believe that would be a wise action and wants further review.

Results of an internal Pentagon audit of the fiscal year running July 1, 2013 to June 30, 2014 revealed earlier this month showed that official government credit cards were used to spend $96,576 on adult entertainment and $952,258 at casinos.

When the report was made public on May 19th it showed the numbers reflect spending by Air Force personnel to be the greatest followed closely by Army card-holders in both casino transaction/amounts and adult entertainment venues. Places where the cards were used included Vegas Showgirls and Sapphire Gentlemen’s Club in Las Vegas, Dreams Cabaret in El Paso, Texas, and Larry Flynt’s Hustler Club in Baltimore, MD. There were a toal of 4,437 casino transactions and 900 adult entertainment transactions across all departments in fiscal year audited. Merchant codes (MMC) were not effective in identifying the transactions.

AGA President and CEO Geoff Freeman finds the proposed ban on government cards at casinos to be a troubling proposition, saying in a letter the Director of Defense Travel Management Office and Inspector General Rymer, “A policy that prohibits the use of government credit cards at casinos would reflect a gross misunderstanding of casinos, which consist of much more than the gaming floor itself, and would ignore the many legitimate business-related expenses incurred at gaming facilities,” Freeman wrote.

“For example, would employees not be permitted to stay in a hotel room that is part of a casino? Would such a policy prohibit the purchase of staple items in retail locations, or restrict patronizing restaurants, within a casino?

“Further, in cities across the country, from Las Vegas to Philadelphia, Biloxi to Detroit, government agencies and private-sector businesses alike routinely hold important meetings and conventions at casinos, which provide state-of-the-art facilities. Would a potential DoD ban prohibit these activities?”

Freeman went on to urge the directors to consider the negative repercussions of the proposed action and asked them not to, “single out an industry that represents a key part of the U.S. economy.”

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