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.
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.
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
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!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
