Can Las Vegas Casinos Accept Nevada Weed Money?

Jason Reynolds

4 years ago

Casinos in Las Vegas could be caught between federal and state laws thanks to the recent legalization of recreational marijuana.

American Gaming Association CEO Geoff Freeman has asked for clarification on the status of weed money inside Nevada’s casinos. (Image: americangaming.org)

Following the legalization of recreational marijuana in the state of Nevada on July 1, 2017, state casinos are now concerned about the influx of so-called “weed money.”

In a bid to clarify whether or not casinos can legally accept bets using money earned from marijuana sales, the American Gaming Association (AGA) has written to the Treasure.

The US Marijuana Dichotomy

Under federal law, marijuana is still illegal. Although this doesn’t directly affect Nevada casinos, the banks used to process casino revenues are regulated by the federal government. This dynamic essentially makes it illegal for banks to process funds from marijuana businesses.

With this being the case, casinos are unsure whether they could be charged with money laundering by accepting bets where the funds have come from marijuana sales.

In simple terms, if a casino took “weed money” and then paid a player in “non-weed” money, it would essentially be cleaning the dirty money in criminal terms (i.e. money laundering).

Based on this, the AGA has written to Treasury Secretary Steven Mnuchin and asked whether casinos across Nevada should be implementing safeguards against such money.

While this issue is currently in the air, the AGA has advised casinos to follow federal law with regards to marijuana consumption.

No Weed in Vegas Casinos

Under the new recreational use laws, users aged 21+ can only consume marijuana in a private home. Consumption outside, such as The Strip, is illegal and this will hold true for casino gaming floors and hotel rooms.

Although medicinal cannabis has been legal in Nevada since 2000, the first medical marijuana dispensary in the state opened up in 2015. Initiative Petition 1 then legalized the use of marijuana by anyone aged 21+ on November 8, 2016.

Since Initiative Petition 1 passed, medical marijuana use in Nevada has become a booming industry and that’s paved the way for legislation governing recreational use. According to recent report by the Nevada Dispensary Association, sales topped $3 million ($500,000 in tax revenue) in the four days following the legalization of recreational use.

Current estimates suggest that sales will hit $30 million within the next six months and many millions more by the close of 2018. With such a large amount of money predicted, the AGA is concerned that a lot of it will find its way into the states casinos.

Assuming federal law takes precedent in this instance, casinos could be tasked with find effective ways to police the potential problem.