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8 GLR 1 (2004)

handle is hein.journals/gmglwr8 and id is 1 raw text is: GAMING LAW REVIEW Volume 8, Number 1, 2004 Mary Ann Liebert, Inc. Casinos Stuck Under New Anti-Terrorism Law I. NELSON ROSE IF YOU THINK ABOUT IT, legal gambling estab- lishments would be the last places you would expect to be aiding terrorists. Casinos, race tracks, and even bingo halls are more likely to be targets than supporters of Islamic fundamentalists out to overthrow our govern- ment. And state lotteries are the government. But Congress and the federal bureaucracy are now seeing terrorist threats under every bridge and inside every slot machine. Congress passed the Patriot Act in 2002 and the Treasury Department quickly followed with new regulations. The laudatory goal: identifying, disrupting, and dismantling the financial infrastructure and sources of terrorist funding. This meant more than targeting the flow of money from Saudi Arabia and Syria to Pales- tinian suicide bombers. Lawmakers found that terrorist groups are increasingly using front companies, legiti- mate businesses, to avoid suspicion. The fact that the front companies are usually Muslim charities and not licensed casinos does not mat- ter. Casinos have lots of cash, and therefore are going to be treated as possible sources of ter- rorist funding. The Treasury Department established a new working group following 9/11-Operation Green Quest. I. Nelson Rose, J.D. Harvard Law School 1979, is a Pro- fessor of Law at Whittier Law School in Costa Mesa, Cal- ifornia. He is recognized as one of the world's leading au- thorities on gambling law and is a consultant to governments and industry. Professor Rose can be reached at his website: www.GAMBLINGANDTHELAW.cOm. © Copyright 2004 by I. Nelson Rose. All rights reserved worldwide. Gambling and the Law® is a registered trade- mark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, California. Green Quest now includes representatives from the IRS, FBI, ATF, DOJ, Customs, Secret Service, Post Office, Naval Criminal Investiga- tive Service, and Financial Crime Enforcement Network (FINCen), among others. If you do not know what all those initials mean, it does not matter-just remember the last one, FINCen. As of March 26, 2003, FINCen is the mother of all government agencies for the casino in- dustry. The metaphor is not a joke. Casinos are now supposed to snitch on their best friends, their largest patrons, if they see them do any- thing suspicious. Nevada regulators tried, and failed, to win an exemption from the federal government, since Nevada already had its own regulations. Casinos that win more than $10 million a year have been filing a form titled Suspicious Ac- tivities Report by Casinos, or SARC, with the Nevada Gaming Control Board for a few years. The Gaming Control Board exempted smaller casinos, since they were unlikely to have many large cash transactions. But the Treasury Department turned down the Nevada regulators' request. Now, any casino that wins more than $1 mil- lion annually has to file SARCs with the fed- eral government's Michigan-based FINCen. The Las Vegas Review-Journal reported that Gaming Control Board Chairman Dennis Nei- lander estimated, About 140 casinos, grocery stores and small slot routes fall into the $1 mil- lion-$10 million range. Worse, the standard for when a casino has to file a SARC has been changed. Under the Nevada regulations, casino employees could use their own common sense in deciding whether a transaction looks suspicious. The new test is much broader, and casinos now face the possibility of being fined if a federal agent 1

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