The statistics are out and while the Financial Industry Regulatory Authority has so far issued fewer fines to banks and other organizations in 2015 as opposed to this time in 2014, it’s still a blockbuster year. Despite the decrease in dollars, the number of disciplinary actions are on par — and anti-money laundering (AML) infractions rank third in the number of problematic cases (up from fourth in 2014).
While banking institutions are obvious targets for tighter AML controls, there is another industry where a lot of money quickly changes hands: casinos. Casinos and other non-banking institutions that handle large amounts of cash are often prone to more abuse of financial controls, and so they have been been required to meet minimum bank security standards since 1985. But in the last 12–18 months, the demand for compliance with tighter AML restrictions has made it more of a priority in the gaming industry.
As an example, Caesar’s Entertainment Corp. was just fined $9.5 million for deficient AML controls. The company has been heavily recruiting players in China, and its controls overlooked reporting a $50,000 cash deposit made to its Hong Kong bank account. While the deposit may have been completely legitimate, the fact is that casinos are a prime target for moving illegal funds around the world.
The U.S. Financial Crimes Enforcement Network (FinCEN) is turning up the heat and demanding that casinos institute better AML controls. In addition to Caesar’s, it cited and fined the Trump Taj Mahal Casino Resort in New Jersey and the Tinian Dynasty Hotel & Casino in the Northern Mariana Islands, a U.S. protectorate, earlier this year.
Sensing this trend, the American Gaming Association has issued a set of best practices to help its members better understand the AML compliance process. It recommends not only understanding the entry and exit points for money, but looking at the potential risks presented by the different nuances of each game. For example, if a casino allows sports betting, there is an opportunity for bettors to work together in order to launder money through the game.
CEO of the Alacer Group. Sharing the latest news in financial crimes and best practices that enable financial institutions to prevent money laundering.