Company's license under review based on allegations of deliberate miscoding of VISA transactions to save millions on fees

Arizona regulators say Global Cash Access of Las Vegas should lose its license to do business in the state, where it now contracts with about 20 Indian casinos.

Global Cash, which provides gaming credit services and ATM machines in casinos, revealed the Arizona action earlier this month and said it plans to contest the recommendation.

The regulatory report alleges that from 1999 to 2002, Global Cash deliberately miscoded transactions involving Visa by disguising cash transactions as retail purchases, meaning it would pay a lower fee to banks issuing the Visa cards at issue, according to a report in the Las Vegas Sun. Global Cash made $26 million as a result, the Arizona report claims. It says the company was fined $384,000 by Visa, but otherwise never returned the money.

The report also says that in later years the company attempted to deceive gaming regulators in Michigan in 2004 and in Arizona in 2005 by not disclosing all the required information about the miscoding issue.

“GCA takes the notice and the allegations made therein very seriously,” the company said in a regulatory filing. “GCA believes that it has taken appropriate actions during the prior 20 months that will permit GCA to fully demonstrate that it should be considered suitable for certification by the department. Many of these actions involve the termination of GCA’s relationships with certain affiliated parties and have been previously publicly communicated and provide the basis for GCA’s belief that GCA is in fact suitable to act as a provider of gaming services to Native American tribes conducting gaming in Arizona.”

The company added, “The notice provides GCA with the right to an informal settlement conference as well as a formal hearing before an administrative law judge in Arizona. GCA intends to seek the holding of the informal settlement conference prior to July 15, and the holding of the formal hearing, if necessary, as soon as possible thereafter. In the meantime, absent further action by the department that prohibits GCA from doing so, GCA intends to continue its operations in Arizona in the ordinary course of business.”