The Nevada Gaming Control Board met earlier this week to discuss a proposal aimed at money laundering regulation for sports books to be tightened. The board conducted a workshop on October 6 to discuss the proposal which was sent in by Mesquite Gaming who expressed concerns over sports betting payouts that were over $10,000 from satellite books which are very common in rural locations. Mesquite Gaming operates the Virgin River and Casablanca properties in Mesquite.

Whenever attention is directed at money laundering laws in a state, it is usually due to the scrutiny of the authorities, state gaming regulators or the Financial Crimes Enforcement Network (FinCEN). This was one of the rare occurrences when a gaming operator has raised concerns over money laundering loopholes and this caused the board to deliberate if the Mesquite Gaming proposal had competitive reasons attached to it. Mesquite Gaming vice president of security and government affairs Richard Tomasso stated that the problem started nearly a decade ago after the state and the board began compliance with federal policies laid down by FinCEN, according to a report in the Review-Journal.

Satellite sportsbooks whose yearly gross gaming is less than $1 million are not required to file Internal Revenue Service (IRS) forms on any cash bets and payouts over $10,000 according to current FinCEN policies. Mesquite Gaming wants the board to make amendments to its policies in order to address this issue and eliminate any loopholes that could be used for money laundering and criminal activities.

According to the report, in July 2016, Catherine Catanzaro, the corporate compliance officer for Mesquite Gaming sent a letter to state regulators saying “We believe the current practice of exempting these satellites from reporting winning sportsbook wagers of $10,000 or higher facilitates money laundering, increases the risk of criminal activity through third-party betting, impedes the efforts of law enforcement in identifying such activity and could potentially damage the integrity of gaming in the state of Nevada.”

Attorneys for the Nevada Control Board prefer to make revisions to Nevada’s Regulation 22 which covers sports pools and race books instead of drafting a new regulation to address this issue. The board has also decided that it will discuss the proposal to tighten money-laundering regulations with its staff and see if it would impose extra work on its audit and tax departments.

Board members Terry Johnson, Shawn Reid and A.G. Burnett highlighted the fact that the only competitor for Mesquite Gaming in the region was the Eureka Hotel and Casino which operators a sports book that takes in less than $1 million a year in bets. William Hill US which operates one of its more than 100 Nevada sports books at the Eureka Hotel and Casino issued a statement through its attorney, Scott Scherer who said that Mesquite Gaming concerns should be directed at the Bank Secrecy Act of 1985 and FinCEN and not Nevada state regulators.

 

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