Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Gaming Industry Seeks Guidance on Handling Money from Cannabis Industry

Author: Daniel T. McKillop

Date: August 23, 2017

Key Contacts

Back

The Gaming Industry Wants to Know How it Should Treat Money Associated with the Legal Cannabis Industry

As marijuana legalization initiatives sweep the country, the gaming industry wants to know how it should treat money associated with the legal cannabis industry. The issue is a growing concern for Las Vegas casinos given that Nevada is one of the latest states to greenlight recreational marijuana sales.

Gaming Industry Seeks Guidance On Handling Money From Cannabis Industry
Photo courtesy of Stocksnap.io

Under the Nevada law, anyone 21 and older with a valid ID can buy up to an ounce of marijuana. Given that the state is a tourist mecca, marijuana sales are expected to outpace every other state in the country. In fact, tourists are projected to account for almost two of every three recreational marijuana purchases in Nevada.

Not surprisingly, the casino industry wants to know how to handle the influx of funds connected to legalized marijuana. Given the existing tension between state and federal laws, there is a lot of gray area when it comes to compliance.

“The current legal situation of marijuana-related businesses that are licensed in an increasing number of states yet are still illegal under federal law continues to present complexities and challenges for many types of financial institutions, including casinos,” the American Gaming Association wrote in its letter to the Treasury Department.

Casinos are considered “financial institutions” under the Bank Secrecy Act (BSA) and subject to its anti-money laundering (AML) regulations. In 2014, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) provided guidance regarding how financial institutions should report transactions involving funds known or suspect to be connected to cannabis businesses. Specifically, FinCEN advised that banks must conduct adequate customer due diligence and proper suspicious activity report (SAR) reporting.

However, it is unclear how the FinCEN guidance relates to the gaming industry. As the American Gaming Association highlighted in its letter, “the guidance appears designed primarily for banks and other financial institutions that have corporate entity customers. Casino patrons, on the other hand, are individuals.”

“Accordingly, we seek clarification of the industry’s obligation in preparing [suspicious activity reports] for individuals who own or are employed by such state-licensed marijuana-related business,” Geoff Freeman, president and CEO of the American Gaming Association, wrote. “Specifically, we need to know whether and how casinos should use the 2014 marijuana guidance for filing [suspicious activity reports] on patrons whose gaming funds appear or are known to be from marijuana-related businesses.”

Given that the letter was submitted in response to a broad request for comments regarding how it can streamline and otherwise improve federal regulations, it is unclear when any further guidance will be provided. Nonetheless, it is an issue worth watching. Atlantic City casinos would benefit from any additional guidance that FinCEN provides, especially if New Jersey moves forward with legalizing recreational marijuana.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"
Gross Lease vs. Net Lease: Understanding the Key Differences post image

Gross Lease vs. Net Lease: Understanding the Key Differences

Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]

Author: Robert L. Baker, Jr.

Link to post with title - "Gross Lease vs. Net Lease: Understanding the Key Differences"
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2 post image

What to Do If You Are Impacted by a Retailer Bankruptcy Part 2

Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]

Author: Brian D. Spector

Link to post with title - "What to Do If You Are Impacted by a Retailer Bankruptcy Part 2"
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business post image

The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business

Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]

Author: Dan Brecher

Link to post with title - "The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business"
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1 post image

Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1

The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]

Author: Brian D. Spector

Link to post with title - "Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: