The Nevada Gaming Commission banned marijuana from the grounds of casino-resorts in Las Vegas and Reno this week. The gaming commission said neither possession nor consumption of marijuana is allowed on casino grounds.
Marijuana is legal in Nevada, but it is still banned by the U.S. federal government. As long as the possession or consumption of pot is considered a felony under federal law, the Nevada Gaming Commission wants it far away from land-based casinos.
To assure there is no confusion that would lead to intermingling the gaming industry with the marijuana industry, the gaming commission create an ironclad set of policies. In effect, it is a 100% firewall between the two industries.
Federal Oversight of Casinos
Las Vegas casinos have to deal with robust federal oversight anyway, because the Feds see casino operations as a likely source of money laundering. Despite the American mob being out of the Las Vegas casino business for decades, resort operators want as little government scrutiny as possible. So do Nevada regulators, because it is bad for business.
Commission Chairman Tony Alamo said, “On one hand, you have the gaming industry and, on the other hand, you have the marijuana industry….The two shall not meet.”
“No Marijuana” Policies for Casinos
To keep the two from meeting, the Gaming Commission passed a number of policies to make clear Nevada’s stance on pot. Commissioners discussed a variety of controversial and non-controversial policy decisions, including third-party licenses and business associations with the Nevada marijuana industry.
The commission decided to bar any associations between license holders and the marijuana industry. Even landlord-tenant arrangements are banned under Nevada gaming law. The idea is to maintain a complete firewall between the marijuana and casino industries.
Licensees also should not receive financing or provide financing “to an individual, entity or establishment that sells, cultivates or distributes marijuana”.
Also, spousal relationships are not allowed. Casino operators or third-party licensees cannot have a business relationship with the spouse of an executive in the marijuana industry. In short, casino executives and license holders should have no ties at all with someone involved in the Nevada marijuana industry.
Nevada Gaming Regulators: Strict “No Marijuana” Policies
The policy decisions come on the heels of policies set two years ago, when medical marijuana first was legalized in Nevada. Citing the same reasons, the Nevada Gaming Commission ruled that casino companies could not invest in the marijuana industry.
Some speculation at the time suggested Las Vegas Strip casino companies might invest in the marijuana industry — including vendor sales — because it was expected to be a lucrative industry. That proved to be impossible, for fear of inviting added scrutiny from the DEA, FBI, or FinCen.
Avoiding Federal Oversight
The decision to ban marijuana is in some cases a result of the growth of federal regulatory agencies over the decades. In the days when the mob ran Las Vegas, casinos did not have to worry about IRS audits the way they do now.
With that in mind, Las Vegas deals with its own past. Nevada officials do not want any reason for more audits and investigations, not so much because there’s anything to hide, but federal oversight encroaches on their own authority.
The greatest ally federal authorities have is corrupt state and local government, because it demands a higher authority to set things right. Assuring that casinos have no ties to marijuana keeps things simple and tidy, which is best for the Las Vegas Strip and Nevada in general.
