Source: https://www.lrrc.com/Casino-Player-Clubs--Nevadas-Data-Protection-Requirements-12-01-2013
Timestamp: 2019-04-25 16:01:16+00:00

Document:
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 cybercriminals, 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.
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.
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.
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.
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.
(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.
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.
2 Nev. Rev. Stat. § 603A.040.
3 NGC Reg. 5.011(8). (Emphasis added).
5 Nev. Rev. Stat. § 603A.200(1).
6 Id. at § 603A.200(2)(A).
9 Id. at § 603A.210(1).
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).

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