Rather than roll the dice in a hazy regulatory environment, the gaming industry is pressing the U.S. Treasury Department for greater clarity about how casinos should handle money connected to the booming legalized cannabis market.
In a letter to federal regulators this week, the American Gaming Association said the friction between the federal ban on marijuana and the state legalization push continues to present complexities and challenges for many types of financial institutions, including casinos. The association, a top lobbyist for casinos, requested more information about how the Treasury Department s guidance for grappling with legalized marijuana first released in 2014 applied to the gaming industry.
That guidance document, issued by the department s Financial Crimes Enforcement Network, spelled out how institutions should report transactions involving funds they know or suspect to be connected to the marijuana business.
FinCEN, as the Treasury network is widely known, said the obligation to file a [suspicious activity report] is unaffected by any state law that legalizes marijuana-related activity. But it acknowledged the U.S. Justice Department s guidance for marijuana enforcement, known as the Cole memo, which took a hands-off approach to state-licensed cannabis businesses. Under Attorney General Jeff Sessions, the Justice Department is now reviewing marijuana policy.
The FinCEN guidance urges financial institutions to report transactions as marijuana limited if they involve a marijuana-related business that does not implicate the Cole memo named after then-Deputy Attorney General James Cole or violate state law. For transactions involving a marijuana-related business that is believed to be violating state law or implicating one of the Cole memo priorities, FinCEN suggests more serious terminology in suspicious activity reports: marijuana priority.
For the gaming industry, the guidance left unanswered the question of how casinos should handle high-rollers and other customers who are gambling with marijuana-connected money.
As the American Gaming Association wrote in its letter to regulators, 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, wrote Geoff Freeman, president and CEO of the American Gaming Association. 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.