Nevada Regulators Reviewing Remote ID Verification

December 15, 2021
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The Nevada Gaming Control Board will hold another workshop on Thursday as regulators consider whether to approve a regulatory amendment submitted by Sightline Payments that would enable remote verification of casino wagering accounts, but not for sports betting and pari-mutuel accounts.

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The Nevada Gaming Control Board (NGCB) will hold another workshop on Thursday as regulators consider whether to approve a regulatory amendment submitted by Sightline Payments that would enable remote verification of casino wagering accounts, but not for sports betting and pari-mutuel accounts.

Sightline initially petitioned the NGCB in September 2020 to make the regulatory changes that would allow casinos to verify the identity and fund wagering accounts of players without them having to appear in the casino.

Should the control board approve the updated policy, the proposed regulatory change would then go before the Nevada Gaming Commission (NGC) for final approval.

Current law allows customers to set up and fund cashless accounts remotely, but they must appear in person to verify their identity with a casino employee.

If approved by regulators, a player could download an app, sign up for a casino wagering account, fund the account and begin playing slots or table games in the casino or make non-gaming purchases without having to stand in line for account verification.

Gaming companies have been on both sides of the debate over remote registration in Nevada.

Proponents believe the ease of signing up would generate more revenue, while opponents want to keep in-person verification because it requires all players to come into a casino at least once, raising the likelihood that they will gamble at a slot machine or spend money on non-gaming amenities.

But both sides of the issue agree the coronavirus pandemic played a key role in accelerating the industry’s adoption of cashless transactions as companies continue to look to reduce the use of items that could be touched by multiple patrons on a casino floor.

Gaming attorney Marc Rubinstein, who represents Station Casinos and Red Rock Resorts, argues Sightline’s proposal could violate federal anti-money laundering (AML) laws.

Federal AML law requires that brick-and-mortar casinos utilize documentary methods to identify verification for on-premises gaming activity, Rubinstein said.

“Consequently, it would seem that the proposed amendments to Reg. 5.225 are an invitation to approve a regulatory change that would contravene federal law,” Rubinstein wrote in a letter to regulators on November 16.

Although the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) recently granted the gaming industry exceptive relief from that requirement under federal rules, Rubinstein argued that such relief applies only in the context of online gaming.

“For this reason, we believe the [NGCB] should not have been asked to approve the proposed regulation amendments, the workshops should not proceed, and the proposed regulation amendments should not be recommended by the board for adoption.”

Station Casinos operates ten properties in southern Nevada, including the Palms Casino Resort. The NGC on Thursday is expected to grant final approval of the $650m acquisition of the Palms by San Manuel Gaming and Hospitality, a subsidiary of southern California’s San Manuel Indian Tribe.

According to an updated draft of the proposal submitted to regulators on November 24, except for sports-betting wagering accounts, “the identity of the patron is otherwise confirmed remotely through the patron providing a government issued picture identification credential couple with an identity verification method that enables the licensee to form a reasonable belief that it knows the true identity of the patron.”

“Such identity verification methods include, without limitation, dynamic knowledge-based authentication (KBA), or other method acceptable to the chair,” the proposal reads. With KBA, customers would be prompted to answer personal security questions to verify their identity.

Barrie VanBrackle, an attorney with Orrick, Herrington & Sutcliffe in Washington D.C. representing Sightline, disputed Rubinstein’s position, citing FinCEN's guidance in October that remote examination of a document is consistent with federal law.

Furthermore, VanBrackle said that several states, including New Jersey and Colorado, permit casinos to remotely examine a document for in-person gaming, and FinCEN has not objected to any such practices in those states.

Additionally, FinCEN regulations require casinos to maintain a record of each customer’s name, permanent address and permit digital storage of such information.

“Given that FinCEN permits digital storage of the information a casino collects through the casino’s required ‘examination of a document,’ coupled with the fact that FinCEN regulations and guidance do not prohibit remote examination of customers’ documents in connection with in-person gaming, it follows that the collection and examination of such information may occur through digital means,” VanBrackle wrote in a letter submitted to regulators.

Last month, the three-member control board hosted an hour-long workshop before deciding to place the issue on a future agenda.

Currently, Sightline’s cashless wagering system is offered at Boyd Gaming’s Aliante property in North Las Vegas and at Genting Group’s Resorts World Las Vegas casino on the Strip, but customers are still required to get account verifications in person.

Other states allow remote registration especially for mobile sports-betting accounts, but Sightline’s proposal does not include remote registration for sports betting because it would not change Nevada regulations that specifically apply to wagering on sporting events.

The American Gaming Association has said nine states — Nevada, California, New Mexico, Oklahoma, Pennsylvania, Indiana, Iowa, Ohio and Florida — have adopted cashless gaming and digital payment options for commercial and tribal casinos.

“Nevada has been a leader in cashless gaming, and we look forward to continued discussion that will enable us to provide Nevada residents and visitors to Nevada with the most innovative, safe, secure, compliant and responsible gaming experience in the United States,” Sightline co-CEO Joe Pappano said in a statement issued after the NGCB's meeting last month.

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