By Christine Duhaime, B.A., J.D., Gaming Attorney & Certified Anti-Money Laundering Specialist
It's becoming a problem for the casinos and the police, particularly because there is evidence of underage prostitution and human trafficking tied to casino night club escort services.
Casinos are required to protect the integrity of gaming and cannot permit any illegal activities to take place on their premises.
Casino night club prostitution can be a compliance officer's nightmare. A prostitution or escort transaction generates proceeds of crime from the casino patron to the pimp (or directly to the escort) which is typically spent in part at the night club or washed unknowingly by the casino. The casino compliance officer has to file a report for each escort transaction he or she sees (or the surveillance team sees on the PZT in the surveillance room) because it's a criminal offence that occurred on its premises, and if any of the proceeds of crime are then used for a casino transaction, a STR must be filed as well.
The Las Vegas police are clamping down on the problem with the arrest of clients, particularly foreigners visiting Las Vegas who hire escorts in casino clubs, and are working with gaming regulators to obtain evidence and prosecute.
A few years ago, Planet Hollywood Casino was fined $750,000 by the gaming regulator for turning a blind eye to prostitution occurring at a night club on its premises.
High Roller Has Secondary Meaning
In Las Vegas the term "high roller" which is normally used to describe wealthy gamblers now has a secondary meaning - a pimp rolling in cash, e.g., proceeds of crime from prostitution.
These new types of high rollers present another problem for the casinos and compliance officers because they are well-known to them. Casino compliance officers are aware of the business in which pimps are engaged, and its illegality. Every casino transaction a pimp makes involves proceeds of crime and the casino must file a STR even if on the particular day in question, the pimp merely gambled. The same is true for the escorts - each casino transaction requires the filing of a STR because all of their income is proceeds of crime.
This aspect of anti-money laundering compliance is a concern for casinos who risk massive fines in the U.S. for failing to monitor and file requisite reports.
You're on a PTZ Camera
Ironically, "what happens in Vegas stays in Vegas" is inaccurate.
Every inch of every casino (including lounges, night clubs, and bars) in Las Vegas is videotaped from at least three different angles using sophisticated PTZ cameras (the image above is a PTZ view before it's zoomed in) and stored in databases.
A PTZ camera is one that is mounted on a casino ceiling and can be tilted and zoomed "up close and personal" to capture in graphic detail activities of interest.
What happens in Las Vegas does not stay in Vegas - it stays in the video records of every casino, the head office of the casino owner and is available on the computers of every gaming regulator.
The use of PTZ cameras in casinos and their capabilities used to be relatively secret, however, several privacy hearings in Canada disclosed the extent to which such cameras are used in casinos and the type of information that is obtained from them for law enforcement purposes.
Sin City With Limits
There is a common misconception that Las Vegas is a place where anything goes but the opposite is true. The casino industry is highly regulated and Las Vegas is a place where what you see if not what you can get. At casinos, their hotels and night clubs and all along the Strip, there are no strip clubs permitted and escort and prostitution services are prohibited.
You can read a related article here.