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    Gambling association releases first-of-its-kind money laundering report

    December 8, 2014

    Monitoring casino floors for potential money-laundering is a full-time job for the American gaming industry.

    Casinos, like banks and other institutions that deal with a lot of money, are required by law to vigilantly look out for financial transactions that may be illegal. And a first of its kind report from the industry’s Washington, D.C.-based trade association sheds light on the best methods casinos can employ to do that.

    The report comes as the industry is under substantial pressure to make sure its anti-money laundering tactics are airtight. Consider:

    • In August 2013, Las Vegas Sands agreed to pay $47 million to settle a money-laundering investigation.

    • In October 2013, Caesars Entertainment revealed that one of its subsidiaries (the operator of Caesars Palace) was under investigation for money laundering-related allegations.

    • Last month, the Wall Street Journal reported that federal agencies wereinvestigating whether Wynn Resorts violated money laundering laws, although a spokesman told the Associated Press that the resort company was not aware of any investigation.

    • The government has indicated its willingness to buckle down on casinos’ anti-money-laundering efforts. According to Reuters, the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, has considered a rule that would require casinos to place more scrutiny on the source of funds high rollers use to gamble. The rule was “put on hold” for now though, Reuters reported.

    Under federal law, casinos have to report all transactions of more than $10,000 to the government, and they have to file “suspicious activity reports” whenever they have reason to think that a gambler could be spending money associated with criminal activity.

    The American Gaming Association’s report, made public on Thursday, details a set of guidelines for complying with those requirements, based on a wide range of industry methods.

    Here are some of the tactics detailed in the report:

    • One of the first steps is identifying the casino’s risk: Where is money laundering most likely to occur? The report says money laundering may more likely involve gamblers who come into casinos with large amounts of money and play games at high-dollar values. Accordingly, it says bigger casinos likely need “more robust” compliance methods.

    • Casinos should also watch out for suspicious player behavior patterns, like if a gambler’s betting activity increases “significantly without explanation,” the report says. Or if a gambler looks like they’re passing chips back and forth with someone else, or they “unexpectedly use multiple sources or multiple destinations for funds.”

    • Casinos can adopt policies that preemptively safeguard against money laundering, like requiring that ticket in, ticket out redemption kiosks be capped at a certain amount of money.

    • Casinos can also suspend players’ loyalty club account — and even bar them from further gambling — if they spend more than $10,000 and the casino doesn’t have enough information to fill out the legally required report on the transaction.

    • The report says that high-rollers may require extra scrutiny in some situations. That could include checking their background against public records and determining whether their funds originate from legitimate sources.

    • Additional activity casinos should be on the lookout for, according to the report, include people who make several transactions just below the $10,000 reporting threshold or put a lot of money into a slot machine and then cash out after very little or no play.

    Elizabeth Cronan, the association’s director of gaming policy, said that the industry has concerned itself with fighting money laundering for “many, many years,” but that the best practices published Thursday are an unprecedented step of casino representatives coming together to share their efforts.

    “This is really the first opportunity that everyone has come together and shared their practices and put them forward in one document,” she said. “One of the real hallmarks of this document is that it does illustrate the industry’s commitment to a strong culture of compliance.”

    The report took care to stress that it’s not supposed to be a “checklist” of actions that every casino (or online gaming website) needs to take. It noted that some casinos “may have good reasons for departing from or modifying a procedure in this document” to fit their specific needs.

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