by David Vialpando
While the vast majority of casino employees are honest, regulation-abiding individuals, occasional transgressions occur – serious or inconsequential, intentional or unintentional. For serious intentional misdeeds, such as theft, collusion, and similar offenses, coordination of investigations between the casino operator and the Tribal Gaming Regulatory Agency (TGRA), or gaming commission, are crucial in protecting the gaming establishment, and in some cases, neighboring casinos and the industry as a whole.
Most TGRA regulations and casino policies and procedures require the casino operator to notify the TGRA when employees are involved in or suspected of violating TGRA regulations or criminal statutes. TGRAs are notified when an employee is suspected of theft, fraud, collusion to cheat, manipulating gaming devices or systems, drug trafficking, or any regulatory violation placing the integrity of gaming, casino assets, or safety at risk. Failure to notify the TGRA can result in a violation notice issued against the casino operator.
In coordinating the operator’s investigation involving the employee and the gaming commission’s investigation of their licensee, it is important to understand the role of each entity in this process.
The role of the casino operator (employer) is to:
- Manage day-to-day casino operations, including hiring and supervising employees.
- Ensure employees adhere to casino policies and TGRA regulations.
- Prevent fraud, theft, and employee misconduct through internal controls.
- Initiate employment actions, which may include suspension or termination of employment.
- Ensure employee due process during adverse actions.
- Cooperate with TGRA investigations.
The role of the TGRA (licensing agency) is to:
- Ensure regulatory compliance by the casino operator and all employees.
- Conduct investigations into violations, including employee misconduct.
- Assess licensing suitability of employees.
- Issue penalties or corrective action, such as suspension or revocation of gaming licenses for substantiated violations.
- Coordinate with law enforcement where criminal offenses are suspected.
- Communicate licensing decisions to the casino operator.
When the casino operator suspects an employee of engaging in activity which places assets or the integrity of gaming at risk, there may be a desire to suspend the employee pending investigation (SPI) or place the employee on administrative leave. The employee will be sent home and instructed that they are banned from the casino until further notice. If the TGRA is not notified of the SPI, they may not have an opportunity to interview the employee before they are sent home. Once the SPI is in effect, the employee may refuse a request by the TGRA to be interviewed by gaming commission investigators.
Depending on the information contained in the operator’s investigation, sufficient grounds may not exist to revoke the employee’s gaming license, particularly if the employee refuses to speak with the TGRA. Absent a license revocation action, the offending employee’s employment may be terminated, but their gaming license remains valid. If the employee applies for employment at another casino, and an inquiry is made of the TGRA regarding the former employee’s gaming license based on reciprocity, it must be reported as valid.
It is important for the casino operator and the TGRA to coordinate any suspension pending investigation to enable gathering pertinent information from the employee not only for employment purposes, but also for licensing purposes should the substantiated violations warrant action. TGRA regulations may permit the immediate suspension of an employee’s gaming license pending a hearing before the commission. The TGRA should coordinate this action with the casino operator so as not to adversely impact the employer’s investigation and collection of evidence.
There may be a tendency by some TGRAs to discontinue a gaming commission investigation once the individual’s employment has been terminated by the casino. For certain offenses, such as embezzlement or collusion to cheat, it is important for the TGRA to complete the investigation and pursue a gaming license revocation if warranted. This action ensures that the employee is excluded from working in the casino gaming industry in the future and potentially placing casino assets at risk or corrupting the conduct of gaming.
While the operator’s investigation will focus primarily on the suspect employee’s actions, the TGRA’s investigation will also focus on operational processes, internal controls, training needs, and environmental factors potentially contributing to the egregious actions of the employee, or highlighting a vulnerability that may be exploited by others in the future. This analysis may result in recommended changes to regulations, internal controls, additional training, or policies and procedures to improve the protection of the gaming operation.
Circumstances may arise where suspected misconduct is brought to the attention of the TGRA before it is known by the operator. The TGRA may decide to conduct an investigation unilaterally for a while for several reasons, including uncertainty regarding possible co-conspirators within the casino organization, inability to control information shared with the casino operator potentially impacting the collection of evidence, or a request by law enforcement not to share information regarding an ongoing investigation. It is important for the TGRA to share information regarding investigations involving casino employees as early as possible at the appropriate casino management level and to seek assurance of confidentiality as warranted. It is equally important for the respective stakeholders to understand that the operator’s responsibility relates to employment decisions and the TGRA’s jurisdiction is in employee licensing and ensuring regulatory compliance.
An overarching priority in undertaking investigations of suspected misconduct is consideration for the due process rights of the individual, their due process rights resulting from potential adverse employment action, and their due process rights resulting from an unfavorable license determination. Confidentiality must be maintained throughout the respective investigations with information restricted to those who have a right to know or a need to know.
Due to the multiple priorities in employee misconduct investigations, it is important for the casino operator and TGRA to establish clear roles and responsibilities in ensuring a thorough and effective investigation process, and the need for ongoing collaboration and communication to protect the integrity of the gaming operation and the tribe’s assets.
David Vialpando is Executive Director of the Pala Gaming Commission and Vice-Chairman of Tribal Gaming Protection Network. He can be reached by calling (760) 510-4559 or email [email protected]. Â
