MGM Resorts will no longer accept cash at its poker tables in the US beginning April 1st. The move to chips-only will affect 10 properties including ARIA, the poker room that has quickly become the hottest spot for the game’s biggest names.
Other Vegas properties include the Bellagio, MGM Grand, Mandalay Bay, Luxor, Excalibur, Monte Carlo, and The Mirage. The MGM Grand Detroit and Beau Rivage in Mississippi will also remove cash from the felt.
Other casinos owned by MGM, including the Strip’s New York-New York and Circus Circus, weren’t specifically named in the report as they don’t currently offer poker tournaments.
The Nevada-based gaming company owns over a dozen casino properties in the states and one international venue, the MGM Macau in China.
While MGM hasn’t specifically stated the reason behind its choice to remove cash from its poker rooms, the move is suspected to be in response to ongoing criminal activity targeting gambling and specifically poker.
Ire of IRS
According to Online Poker Report, the first media outlet to report the MGM decision, eliminating cash from the table should greatly help in combatting money laundering on the casino floor. Poker is one of the few remaining games where a player can enter the property and begin gambling without converting cash to chips or credit. This makes it much harder for a casino to properly track a player’s wins and losses.
By law, resorts are required to record any player who performs over $10,000 worth of transactions in any given 24-hour timeframe. For a poker tournament, the casino must provide the appropriate Internal Revenue Service (IRS) paperwork to a player that wins $5,000 minus the buy-in, and the winner must also report the income on their tax return.
The IRS considers all gambling winnings as taxable income, meaning even if the player isn’t in a tournament but simply at a cash poker table, tracking winnings on every single person is essentially impossible.
It’s apparent that the IRS is stepping up its game in cracking down on the gambling industry. Earlier this month the tax enforcement agency suggested lowing the casino winnings tax threshold from $1,200 to $600 for slots and bingo. The action on behalf of MGM Resorts might be a concerned effort on the company’s part to better align itself for stricter IRS regulations across all casino games.
Action Follows Words
Last June, the Finance Crimes Enforcement Network (FinCEN), a government agency that analyzes international money laundering, terrorist financing, and general financial crimes, warned the gambling industry better measures to fight money laundering needed to be implemented.
“Think about what happens each time a customer enters your casino. Often, the first thing a customer does is conduct a financial transaction, they buy chips,” Jennifer Shasky Calvery, director of FinCEN said last summer. “And the last action a customer takes is usually also a financial transaction, they cash out those chips. And while the vast majority of these transactions are purely for entertainment purposes, casinos can serve as the vehicle for the use, movement, and concealment of ill-gotten gains.”
Removing cash from the poker table and instead forcing a player to create a trail of activity will only allow properties to better prevent money laundering on its floors. Instead of betting with a $100 bill, the player will be forced to use a physical chip.
Many casinos now work with radio-frequency identification (RFID) chips that come with built-in data-tracking technology. If theft occurs at the table, the thief can be quickly located and apprehended should they try to gamble with the chip or cash it in.
The gambling industry is unfortunately a favorite target of thieves and crooks, so while more oversight on the part of casinos might seem like less freedom for gamblers, its potential benefit in the long run is substantial. It’s expected that additional casinos will soon follow MGM’s lead.