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Sep. 21, 2006
Copyright © Las Vegas Review-Journal


CORRECTION -- 9/23/06
Jane Ann Morrison's column on the repeal of the Nevada gaming Regulation 6a in Thursday's Review-Journal had an incorrect date. The state regulation will be repealed at midnight June 30, 2007.

JANE ANN MORRISON: Nevada gaming to give up piece of autonomy in name of terrorism fight

Something uniquely Nevadan and historic is about to end today.

No, it's not the ability to get a marriage license 24 hours a day in Clark County. (Where would Britney Spears go the next time she gets liquored up and decides to get married at 5:30 a.m.? Who are we to deny her, or anyone, the right to be stupid by not offering 24-hour marriage licenses?)

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Without fanfare, without regrets, the Nevada Gaming Commission today is expected to repeal Regulation 6a, a gaming rule designed to ferret out money launderers. Reg 6a, as it is fondly called, requires casinos to track cash transactions of $3,000 and more and report to the Treasury Department anyone whose cash transactions exceed $10,000 in 24 hours.

Doesn't sound too sexy, but Reg 6a violations cost MGM Mirage $5 million in fines in 2004, so the regulation obviously had some kick to it. And MGM Mirage wasn't alone in getting dinged with fines; that was just the largest ding.

The regulation that Nevada fought so hard to obtain in 1985 so the federal government wouldn't intrude now is going gently into the good night, all because of the Patriot Act. The federal government wants the ability to track cash transactions across state lines, and Nevada was the only state doing its own job of tracking such transactions.

Gaming Control Board Chairman Dennis Neilander said that repealing this regulation will free up bodies and speed up the rate of auditing casinos to make sure they're paying enough taxes. Instead of auditing a casino every three years, the state should be able to audit that same casino every 2 1/2 years.

Saving money to make money sounds like a good governmental principle. For the casinos, instead of filling out state forms, they'll be filling out federal forms, so for them, it's not a big switcheroo.

"Tracking cash transactions across state lines does make some sense," Neilander said, particularly during an era of terrorism in which terrorists prefer paying in cash so their whereabouts cannot be traced. Frankly, the Patriot Act didn't leave Nevada gaming officials a lot of options.

But 21 years ago, when Nevada and Atlantic City were the gaming meccas (and calling Atlantic City a mecca back then was a stretch), Nevada regulators fought with passion to keep the cash transaction reporting under their domain, not the feds'. First it would be reporting requirements, then federal taxes. Nobody in Nevada, casinos or regulators, wanted the feds in our industry, so a great deal of time and effort was spent crafting a rule that would make the Treasury Department happy and let Nevada monitor its own currency transaction reports.

"Nevada was the only state with a waiver, and we spent a lot of man-hours enforcing it," Neilander said.

The casinos weren't wild about the paperwork, and sometimes employees fell behind. The $5 million fine against MGM Mirage was the largest of its kind, but there was no evidence of money laundering, Neilander said. An employee fell behind, not in filing out the reports, but in sending copies to the Internal Revenue Service. Over a period of 18 months at The Mirage, some 14,903 currency transaction reports were not submitted to the IRS. Oops.

So today the Nevada Gaming Commission should vote to repeal Reg 6a and set July 30, 2007, as the drop-dead date when the feds assume responsibility.

One difference will be felt with the change: Smaller casinos caught a break under the state regulation, and that break is going away. The Treasury Department's Financial Crimes Enforcement Network (with the catchy acronym FinCEN) requires reporting of cash transactions by casinos with annual gross gaming regulations of $1 million. The state's threshold for reporting is $10 million in gaming revenues, so smaller casinos no longer catch a break from paperwork.

Yes, we're letting the feds take over a state job, but from a practical viewpoint, why should Nevada pay to enforce federal rules when other states don't? But another piece of Nevada's unique gaming history fades away in favor of a federal system seeking uniformity, all in the name of fighting terrorism.

Goodbye, Reg 6a. We hardly knew ye.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call 383-0275.

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