Nevada Gaming Board Proposes Sweeping AML Reforms
20, – Nevada gaming regulators are moving to significantly strengthen anti-money laundering (AML) protocols, responding to a series of high-profile enforcement actions and increasing scrutiny of financial activity within the state’s $70 billion gaming industry. The Nevada Gaming Control Board (NGCB) on recommended amendments to Regulations 5 and 25, aiming to bolster accountability and oversight.
Chairman Mike Dreitzer described the proposed changes as the result of a “multi-month effort” involving both the gaming industry and AML experts. “We looked at any number of risk areas and these were the risk areas that made the most sense” to address, Dreitzer said, signaling a proactive approach to combating illicit financial flows.
Regulation 5: Increased Accountability for Gaming Establishments
Amendments to Regulation 5 focus on individual accountability within casinos, formalizing compliance roles, and tightening controls over how patrons fund their wagering activities. A key provision will require individuals responsible for a licensee’s compliance to be designated as “key employees,” necessitating formal licensing or a finding of suitability by the Commission. These individuals will be required to submit a Multi-Jurisdictional Personal History Disclosure Form within 30 days of assuming their responsibilities, detailing their personal, employment, financial, litigation, criminal, and licensing history.
those overseeing AML programs will now be required to register as gaming employees, a streamlined process designed to ensure broader oversight. Compliance plans must also designate specific individuals responsible for both the AML program and player development (marketing) functions, with these designations subject to administrative review and approval.
The proposed regulations also introduce a prohibition on business entities funding a patron’s wagering activities through front money, wagering accounts, or credit payments. Licensees will also be required to notify the Board within 10 business days if a gaming employee is terminated or separated for “intentional or willful violations” of AML policies.
Regulation 25: Tighter Controls on Independent Agents
Changes to Regulation 25 aim to increase control over independent agents, introducing a new category of “secondary representatives” – individuals who assist or are compensated by independent agents but are not themselves independent agents. Licensees will be required to conduct due diligence on independent agents before entering into agreements and provide them with annual AML training, submitting acknowledgments of training and due diligence findings to the Board.
All agreements with independent agents must now include provisions prohibiting the use of secondary representatives without prior licensee approval, prohibiting agents or secondary representatives from engaging in gaming transactions on behalf of clients, and allowing licensees to withhold compensation if they are unable to verify a patron’s source of funds. Most changes to Regulation 25 will take effect 120 days after adoption, allowing time for internal procedure updates and training programs.
Enforcement Actions Drive Regulatory Changes
The NGCB’s proposed amendments come after a series of significant AML enforcement actions against major Nevada casinos over the past two years, exposing compliance breakdowns. These cases highlighted failures in verifying sources of funds, overseeing high-risk patrons, and maintaining accountability within casino compliance and marketing departments.
In , an International Gaming Operator A was fined $10.5 million after regulators found the operator permitted illegal bookmakers to gamble millions of dollars without adequate source-of-funds verification. A similar case in resulted in an $8.5 million settlement with International Gaming Operator B, following findings that illegal bookmakers were allowed to gamble and settle markers in cash at multiple Strip properties.
Further settlements followed, with International Gaming Operator C agreeing to pay $5.5 million in for violations involving unregistered international money transmissions, proxy betting, and the use of third-party intermediaries. In , International Gaming Operator D was sanctioned for $7.8 million for long-running AML failures tied to an illegal bookmaker who gambled at affiliated properties for over seven years.
Collectively, these enforcement actions, totaling more than $30 million in fines, underscore the areas the NGCB is now targeting with its proposed amendments: clearer individual accountability, formalized compliance authority, tighter controls over third-party relationships, and enhanced oversight of patron funding sources. The proposed changes represent a significant step towards strengthening Nevada’s defenses against money laundering within the gaming industry.
