United States: Casino Player Clubs & Nevada's Data Protection Requirements

2013 All Rights Reserved Casino Enterprise Management

MLife, Total Rewards and Grazie are just three examples of player clubs currently operated by casinos in Las Vegas. Over the past decade, these clubs have become a staple of casino operations. To the casino patron, the premise is simple: The more you play, the more benefits you earn, e.g. free merchandise or discounts on rooms, shows and food. In reality, however, these clubs are complex marketing tools that extrapolate a wealth of information from patrons, enabling casinos to maximize patrons' play and other spending habits.

As the use and sophistication of these player clubs have grown, so has the Nevada Gaming Control Board's interest in the storage of patron information. The board has investigated numerous incidents in which such databases have been compromised and the potential for identity information theft existed. Consequently, the board continually emphasizes to casinos the need to conduct ongoing reviews of their policies governing the storage of patron data to ensure that unauthorized persons, such as cyber criminals, do not gain access to such information.1 We will highlight a few key laws governing the safekeeping of patron information in Nevada.

Signing up for a player club card is quick and easy. Typically, the patron is asked to complete three simple steps. First, the patron is required to provide government-issued identification to prove their age and eligibility. Second, the patron must provide contact information, such as an email or mailing address. Third, the patron is required to enter a secure PIN (known only to the patron). In return for this information, the patron is issued a player club. Using the card is just as easy. The patron is only required to insert the card into the gaming device for the duration of play. As the patron plays, he or she accumulates points that can be redeemed for rewards. The more points a patron accumulates, the greater the reward. Redemption of rewards is also simple. For example, when dining or shopping, the patron is only required to present the card to take advantage of any discounts offered by the establishment.

What patrons may not realize, however, is the wealth of data collected from them as they use the card. Among other things, the casino will know who the patrons are, their age, where they reside, what games they play, duration of play, shopping habits, food tastes and entertainment preferences. The casino uses this data to profile patrons for maximizing spend during their stay and enticing them back to the property as fast as possible through personalizing rewards, e.g., a coupon to the patron's favorite restaurant.

Certain information collected and stored by casinos constitutes personal information (PI). PI is information that permits the identity of an individual to whom the information applies to be reasonably inferred by either direct or indirect means. PI is important because, unlike public information, PI needs to be collected, maintained and disseminated in a protected fashion. In Nevada, PI is defined as:

[A] natural person's first name or first initial and last name in combination with any one or more of the following data elements, when the name and data elements are not encrypted:
1. Social Security number.
2. Driver's license number or identification card number.
3. Account number, credit card number or debit card number, in combination with any required security code, access code or password that would permit access to the person's financial account.

Security of PI is governed by Chapter 603A of the Nevada Revised Statutes. While Chapter 603A is not part of the Nevada Gaming Control Act, gaming licensees are nevertheless subject to its provisions. The reason for this is Nevada Gaming Commission Regulation 5.011, which sets forth a list of actions or omissions that the board and Nevada Gaming Commission (Commission) may determine to be unsuitable methods of operation by gaming licensees. The regulation states, in pertinent part:

The board and the commission deem any activity on the part of any licensee, his agents or employees, that is inimical to the public health, safety, morals, good order and general welfare of the people of the state of Nevada, or that would reflect or tend to reflect discredit upon the state of Nevada or the gaming industry, to be an unsuitable method of operation and shall be grounds for disciplinary action by the board and the commission in accordance with the Nevada Gaming Control Act and the regulations of the board and the commission. Without limiting the generality of the foregoing, the following acts or omissions may be determined to be unsuitable methods of operation:

(8)Failure to comply with or make provision for compliance with all federal, state and local laws and regulations pertaining to the operations of a licensed establishment including, without limiting the generality of the foregoing, payment of all license fees, withholding any payroll taxes, liquor and entertainment taxes, and antitrust and monopoly statutes."3

Pursuant to this regulation, the commission has the authority to determine, in the exercise of its sound discretion, whether a gaming licensee has failed to comply with any federal, state or local laws or regulations.4 Accordingly, Chapter 603A sets forth obligations with respect to the use and security of PI, several of which impact casino player clubs.

To begin, any business in Nevada that maintains records that contain PI concerning customers is required to take reasonable measures to ensure the destruction of those records when the business decides that it will no longer maintain the records.5 This requirement is noteworthy for three reasons. First, the term "business" is defined as a "proprietorship, corporation, partnership, association, trust, unincorporated organization or other enterprise doing business in this state."6 This term is expansive and clearly includes Nevada casinos. Second, unlike some jurisdictions, Nevada does not require a business to destroy PI after a certain period of time. Instead, it allows the business to subjectively determine when it no longer requires the PI. Third, the phrase "reasonable measures to ensure the destruction" is also broadly defined as:

"any method that modifies the records containing the personal information in such a way as to render the personal information contained in the records unreadable or undecipherable, including, without limitation: (1) shredding of the record containing the personal information or (2) erasing of the personal information from the records."7

Consequently, a casino may use any means it desires to destroy PI, so long as the records become unreadable or undecipherable.

Chapter 603A also imposes several security requirements upon data collectors. The term data collector is defined as "any governmental agency, institution of higher education, corporation, financial institution or retail operator or any other type of business entity or association that, for any purpose, whether by automated collection or otherwise, handles, collects, disseminates or otherwise deals with nonpublic personal information."8 Again, this term is expansive and unquestionably includes casinos that collect and store PI as part of their player clubs. The security requirements imposed in Chapter 603A include: (i) the maintenance of reasonable security measures, (ii) encryption of PI in transmission and on data storage devices and (iii) disclosure of security breaches impacting the PI of Nevada residents.

Specifically, a data collector that maintains records that contain PI of a resident of Nevada is required to implement and maintain reasonable security measures to protect those records from unauthorized access, acquisition, destruction, use, modification or disclosure.9 Additionally, any contract for the disclosure of PI maintained by a data collector must also include a provision requiring the person to whom the information is disclosed to implement and maintain reasonable security measures.10 Chapter 603A does not define, however, what constitutes "reasonable security measures." Rather, security measures under this chapter are measured against a standard based on the circumstances of the data collector, the threat environment, available technology, etc. A common factor that data protectors often rely upon to ensure "reasonable security measures" is compliance with industry standards. A data protector must be mindful in this regard, however, as compliance with industry standards may not always be "reasonable," especially if the industry is lagging in this respect.

In addition to the maintenance of reasonable security measures, Chapter 603A imposes requirements upon the encryption of PI.11 In particular, a data collector doing business in Nevada must use encryption for: (i) all electronic transfers of PI, unless transferred via facsimile, to any person outside of the secure system of the data collector and (ii) any movement of a data storage device containing PI beyond the logical or physical controls of the data collector or its data storage contractor.12

With regard to this latter requirement, most states' PI laws consider it a security breach when a data storage device containing unencrypted PI is lost. However, Nevada goes one step further and effectively makes it a security breach to remove a data security device containing unencrypted PI from the control of the data collector. Moreover, the definition of "data storage device" is expansive and means "any device that stores information or data from any electronic or optical medium, including, but not limited to, computers, cellular telephones, magnetic tape, electronic computer drives and optical computer drives, and the medium itself."13 This places a heavy burden on a casino to monitor its employees' use of cell phones, laptops, thumb drives and other data storage devices that can be loaded with unencrypted PI and taken off the premises.

Finally, Chapter 603A requires that a data collector disclose any breach of the security of its system data following discovery or notification of the breach to any resident of Nevada whose unencrypted PI was, or is reasonably believed to have been, acquired by an unauthorized person.14 In such an instance, the data owner must disclose the breach in the most expedient time possible and without unreasonable delay. Notification may be made using one of the following methods:

(i) Written notification.
(ii) Electronic notification, if the notification provided is consistent with the provisions of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq.
(iii) Substitute notification, if the data collector demonstrates that the cost of providing notification would exceed $250,000, the affected class of subject persons to be notified exceeds 500,000 or the data collector does not have sufficient contact information.15

Moreover, if a data collector determines that notification is required to be given to more than 1,000 persons at any one time, the data collector shall also notify, without unreasonable delay, any consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, of the time the notification is distributed and the content of the notification.17

The privacy of PI is increasingly important in today's electronic world. As such, casino operators bear a heavy burden to protect such information collected in conjunction with their player clubs. By failing to adhere to these burdens and appreciate their societal significance, a casino can expect significant public backlash, severe fiscal consequences and the ire of the board and commission.


1 See State Gaming Control Board Industry Letter Re: Federal and State Laws Pertaining to Security Measures Required By Data Collectors And Disclosure Requirements Should Said Information Become Breached, December 15, 2010. http://gaming.nv.gov/modules/showdocument.aspx?documentid=5571

2 Nev. Rev. Stat. § 603A.040.

3 NGC Reg. 5.011(8). (Emphasis added).

4 Id.

5 Nev. Rev. Stat. § 603A.200(1).

6 Id. at § 603A.200(2)(A).

7 Id. at §603A.200(2)(B).

8 Id.at § 603A.030. (Emphasis added)

9 Id. at § 603A.210(1).

10 Id. at §603A.210(2).

11 See id. at § 603A.215(2).The definition of "encryption" is open-ended and means "the protection of data in electronic or optical form, in storage or in transit, using: (1) An encryption technology that has been adopted by an established standards setting body, including, but not limited to, the Federal Information Processing Standards issued by the National Institute of Standards and Technology, which renders such data indecipherable in the absence of associated cryptographic keys necessary to enable decryption of such data; (2) Appropriate management and safeguards of cryptographic keys to protect the integrity of the encryption using guidelines promulgated by an established standards setting body, including, but not limited to, the National Institute of Standards and Technology; and (3) Any other technology or method identified by the Office of Information Security of the Division of Enterprise Information Technology Services of the Department of Administration in regulations adopted pursuant to NRS 603A.217." Id.at § 603A.215(5)(b).

12 Id. at § 603A.215(2). Note: NRS 603A.215(1) also requires businesses that accept credit or debit cards to meet the Payment Card Industry Data Security Standard.

13 Id. at § 603A.215(5)(a).

14 Id. at § 603A.220(1). Similarly, if the data collector does not own the PI, it must notify the owner or licensee. See id. at § 603A.220(2).

15 Id. at §603A.220(4).A data collector is also deemed to be in compliance if it abides by internal policies consistent with the timing requirements of Chapter 603A or, if subject to the Gramm-Leach Bliley Act, complies with the privacy and security provisions contained therein. See id.at § 603A.220(5).

16 Id. at § 603.220(4).

17 Id. at § 603A.220(6).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Karl F. Rutledge
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.