Feds target high rollers

April 16, 2002 8:29 AM
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Spurred by terrorist threats, the U.S. Treasury Department wants to clamp down on big casino cash transactions.

But Nevada gamers are saying no dice.

Proposed federal regulations would impose new and broader rules on Nevada’s gaming industry in an effort to clamp down on money laundering. Anxious executives say this could bog down casinos in paperwork while turning off high-rollers who prize their privacy.

Besides, they say Nevada ”” lone among the states ”” already has an enforcement program in place. Since Nevada enacted its reporting policy in 1997, casinos have filed more than 500 incident reports on questionable cash transactions.

“We have a good partnership between casinos and regulators,’’ says Greg Gale of the state’s audit division.

Officials from Gaming Control Board Chairman Dennis Neilander to the American Gaming Association hope that the feds will permit Nevada casinos to continue operating under state statutes. Those rules, spelled out in nearly 8,000 words, detail just about every conceivable casino transaction and lay down guidelines for reporting suspicious activity, ranging from identity theft to “structured” withdrawals where large sums are broken into smaller denominations.

“The feds want to take the common sense out of it,’’ one industry expert complained.

For example, broader Treasury regulations would require a detailed report if an individual or group booked convention space and then canceled it ”” a common occurrence in Las Vegas and other trade show meccas.

The National Consumer Coalition also opposes the Treasury dragnet, saying it would violate the personal privacy rights of gamblers. Alleging that law enforcement doesn’t use the information already at hand, the coalition predicts that the regulations will only produce a “massive haystack of irrelevant and petty reports.”

Public comment on the rules has been extended another 60 days, and Uncle Sam has been getting an earful.

Citing the “fast-paced, entertainment-filled” ambience of casinos, gamers say they operate in an environment vastly different from other financial institutions. The industry notes that casino patrons do not necessarily act in ways consistent with typical financial transactions, but may be motivated in the way they transfer and wager funds by factors such as gambling strategies, intuition or even superstition.

Striving to serve customers and placate bureaucrats, Nevada casinos follow federal thresholds targeting transactions that exceed $3,000 and $10,000. Exchanges are flagged if, “in the judgment” of the casino, they appear suspicious. Broadening the regulatory language while deleting the “judgment” provision raises the specter of wholesale IRS audits and other intrusions.

“The casinos are diligent, we’ve got a paper trail, and it’s working very well,’’ Gale said.

Instead of harassing law-abiding gamblers, Treasury critics suggest that Washington get a handle on its own people. This month, it was reported that employees of the U.S. Interior Department have been misusing government-issued credit cards to withdraw money from casinos. The cards were used to get wire transfer cash advances running into the thousands of dollars.

Interior says it is reworking its policies and retraining employees. But the agency did not say if the workers had repaid the government or were disciplined.