Money Laundering Through Casinos And Resorts
Casinos And Money Laundering
How Does Money Get Laundered

The casino industry is a target for criminals looking to launder their profits gained through illicit activities such as drug trafficking and human trafficking.

Money laundering in casinos can happen in many forms. In some cases dirty money is converted into chips, played with for a short while, then cashed out in the form of a check. Another way that money laundered in a casino is through the use of individuals using false identification to create multiple accounts to avoid tracing money laundering transactions taking place in the casino.

Money Laundering Through Casinos, brian slotter, tournoi de poker dans le 34, golden lion casino mexicali empleo. Money laundering is the legal process of embezzling money obtained through illegal means. Financial institutions face various money laundering risks and casinos are high risk sector because of its legal status. Money-laundering from the perspective of the casinos is to buy chips from the casino with the cash and receive remittance in the bank. 4th and 5th EU AML Directive for Gaming and Gambling Industries. In 2015, the EU Commission comply with the 4th Anti-Money Laundering Directive to help combat money laundering and terrorist financing in the EU. This directive was not perfect for the gambling industry, so it decided to extend the 5AMLD EU directive to cover the gambling industry.

In many jurisdictions, casinos are required to register with their financial intelligence unit and implement an effective anti-money laundering (AML) program. Failure to do so can result in hefty penalties.

In the UK, from January to May 2020, the gaming industry paid £27m in settlements over regulatory action. Toward the end of 2019, the UK crackdown on online casinos netted another £8.7m. Two of the offences occurred just a month after other four other companies were fined more than £4.5m for similar money laundering infractions. That brings the total fines in 2019 to more than £13.2m.

In the U.S., casinos must comply with Bank Secrecy Act (BSA). FinCEN, the financial intelligence unit for the United States, issued guidance in 2010 regarding AML/BSA compliance programs, stating that, “at a minimum,” such a program must include:

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A system of internal controls to assure ongoing compliance with the BSA;
Internal or external independent testing for compliance with a scope and frequency commensurate with the risks of money laundering and terrorist financing posed by the products and services provided;
Training of casino personnel, including training in the identification of unusual or suspicious transactions;
An individual or individuals to assure day-to-day compliance with the BSA;
Procedures for using all available information to determine and verify, when required, the name, address, social security or taxpayer identification number, and other identifying information for a person;
Procedures for using all available information to determine the occurrence of any transactions or patterns of transactions required to be reported as suspicious;
Procedures for using all available information to determine whether a record required under the BSA must be made and retained; and
For casinos and card clubs with automated data processing systems, use of the programs to aid in assuring compliance.

Money Laundering Reporting

In terms of suspicious activity being reported to FinCEN in 2019, “Minimal Gaming with Large Transactions” was the highest reported activity with more than 5,000 Suspicious Activity Reports (“SAR”). Other frequently cited suspicious activities include:

Transactions below CTR Threshold
Unknown Source of Chips
Two or More Individuals Working Together
Alteration or Cancelation of Transactions to Avoid CTR Requirement
Suspicion Concerns on the Source of Funds

Suspicious activity involving sports betting, abandoned jackpot, and bill stuffing were often cited in SAR forms for those who checked the “other” box.

Warning from FinCEN

Money Laundering Through Casinos And Resorts

At a recent conference, FinCEN Director Kenneth Blanco warned casinos that cuts to compliance budget in order to reduce costs and retain gamblers is seen by the agency as a national security issue and the agency would not take the issue lightly.

“So it concerns me when I hear about some compliance budgets being cut by casinos looking to trim costs and retain gamblers. To be clear—we take the culture of compliance seriously. This is a national security issue: not something to be taken lightly—and we will not take it lightly.”

“FinCEN is continually looking at compliance across all financial institutions and will not hesitate to act when it identifies financial institutions that violate the BSA. It is also important to note that not all enforcement actions are public—FinCEN often closes cases with warning letters sent to financial institutions or refers cases to our delegated examiners to conduct additional examinations.”

The regulator also expects casinos to integrate the latest products into into their existing AML programs. “Sports betting, and other mobile gaming services run through your casino, are no different than other products and services. FinCEN expects that your casino or card club is monitoring your sports betting programs for potentially suspicious activity. This includes offering sports betting through a mobile app.”

Red Flag Indicators for Casinos

Casinos And Money Laundering

FinCEN is not the only regulator putting pressure on casinos to detect money laundering in their organizations. In the UK, a casino company has been fined a record £13m (USD$16 million) by the Gambling Commission for failing to prevent money laundering and for allowing people with gambling problems to lose huge amounts over repeated visits to its casinos.

For these reasons, it is imperative that casinos implement an effective AML compliance program.

FINTRAC, Canada’s Financial Intelligence Unit, offers a list of money laundering (ML) and terrorist financing (TF) indicators to help all casinos detect potential money laundering and comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations. While issued by the Canadian regulator, these indicators are useful for any casino operating in any jurisdiction. Here is a subset of some of those indicators.

Money laundering indicators related to identifying the person

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Money Laundering Thru Casinos