The influential international body that grades countries’ efforts to prevent money laundering recognized casino gaming companies’ significant investment in anti-money laundering (AML) efforts, reporting that the industry “has a good understanding of risks and obligations,” puts in place “mitigating measures above the requirements” of the Bank Secrecy Act (BSA) and has shown “an increased focus on raising awareness and improving compliance.”
The Financial Action Task Force (FATF) released its mutual evaluation report for the United States in December 2016. FATF releases such reports once every ten years, and its 2016 report found, “the gaming industry has taken significant steps to comply with AML/CFT [combatting the financing of terrorism] requirements…casinos have not only increased their compliance spending but have also put in place mitigating measures above the requirements of the BSA based on their risk.”
In advance of the FATF evaluation, gaming companies took aggressive action to improve AML compliance, and the American Gaming Association (AGA) demonstrated these improvements through a groundbreaking report earlier this year. In 2014, AGA also released a first-ever Best Practices for AML Compliance, which it updates annually.
FATF praised both reports by name in its evaluation. AGA “works to assist the sector by putting out useful best practices guidance,” and the recent study on Investing in America’s Financial Security: Casinos’ Commitment to Anti-Money Laundering Compliance commissioned by the AGA provides a good picture of the understanding of the casino sector and the mitigating measures they have put in place.”
FATF, in 2006, recommended the industry take a number of steps to increase its customer identification procedures, reporting of suspicious transactions while further regulating, supervising and monitoring anti-money laundering operations. The 2016 FATF report recognizes the industry’s enhancements, highlighting that the gaming industry has taken significant steps to comply with AML/CFT requirements and to prevent potential money laundering and terrorist financing. Further, the report acknowledges that in some areas, industry practices exceed federal BSA requirements.
The FATF mutual evaluation process results in comprehensive written reports that are used by governments and the private sector to underscore the money laundering and terrorist financing risks posed by countries and the financial sectors within them. When making gaming licensing decisions, foreign regulators may use these reports to consider whether an applicant comes from a jurisdiction with strong oversight and controls to combat illicit finance. Similarly, financial institutions use these reviews as part of their calculus with respect to financing and other critical financial decisions.
FATF is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognized as the global AML and counter-terrorist financing standard.