There’s lots of new weed money flowing through Nevada and other places where pot’s recently legal. But casinos on The Strip and elsewhere aren’t sure if they can let patrons gamble with it. In an effort to clear the haze, the group that represents casinos in the U.S. sent a letter Monday asking Treasury Secretary Steven Mnuchin to clarify whether it’s cool if they accept money earned from pot businesses.
The confusion stems from an Obama-era Treasury Department directive that requires financial institutions to file a suspicious activity report (SARs) when they think money was made through weed and violates state law.
In gambling mecca Nevada, though, making money from selling weed is no longer against state law, since recreational pot sales went legal there on June 30. But gaming establishments are worried about handling the weed money, due in part to money laundering concerns.
Marijuana remains illegal under federal law, and since banks are regulated by the federal government, they’re hesitant to work with even lawful pot shops. Casinos fear that if they allow patrons to gamble with pot money, the money would be “cleaned” in the process, making it eligible for a bank deposit. And the casino could subsequently be implicated in money laundering.
“The casino gaming industry recognizes the importance of anti-money-laundering efforts and makes extensive efforts to comply with such requirements,” wrote Geoff Freeman, the president and CEO of the American Gaming Association.
Massroots recently published a story asserting its CEO was “permanently banned” from gambling at Las Vegas’ Wynn Resorts because of his company’s involvement in developing technology for weed, even though he doesn’t make money from working with the drug directly.
In that case, it was the man’s role in a publicly traded, pot-related company (discovered when he applied for a rewards card) that got him banned, but in other cases the casinos may know local customers work in the marijuana industry, or gamblers may deposit cash that smells like marijuana —prompting a SAR filing, due to the discrepancies between state law and federal policy.
“The dichotomy imposes a costly operational burden both on the casino industry and law enforcement,” Freeman asserted.