Did you know that Casinos are Financial Institutions?

JDSUPRA

Since 1985, Casinos that have Gross Annual Gaming Revenues in excess of $1,000,000 are considered to be Financial Institutions and are subject to the requirements of the Bank Secrecy Act (BSA).  This means that Casinos have to:

⦁    Develop and implement a written Anti-Money Laundering (AML) Program and have an effective AML program in place.  Each casino must produce its own program, based on an analysis of the risks presented by the casino’s products and services in order to prevent the casino from being used to facilitate money laundering and terrorist financing.  
⦁    File FinCEN Currency Transaction Report (CTR) for any transaction that exceeds $10,000.
⦁    File FinCEN Suspicious Activity Report (SAR) for any suspicious transaction that exceeds $5,000.


AML Program

At a minimum, each Casino AML program must have:

 

  1. Internal controls (policies and procedures designed to assure compliance with the Bank Secrecy Act (BSA);
  2. Training of the casino employees;
  3. Independent testing for compliance ;
  4. A compliance officer, who is responsible for day-to-day compliance with the BSA and the casino’s AML program;
  5. Procedures for using all available information to determine, when required, the name, address and Social Security Number (SSN), and to verify the identity of, a person;
  6. Procedures for using all available information to determine any transactions or patterns of transactions required to be reported as suspicious; and
  7. Procedures for using computers to aid in assuring compliance, if the casino has computerized systems.


CTR

Transactions in currency involving cash-in include:


⦁    Purchase of chips, tokens, and plaques
⦁    Front money deposits
⦁    Safekeeping deposits
⦁    Payments on any form of credit, including markers and counter checks
⦁    Bets of currency
⦁    Currency received by a casino for transmittal of funds through wire transfer for customer
⦁    Purchases of a casino’s check
⦁    Exchanges of currency for currency, including foreign currency


Transactions in currency involving cash-out include:


⦁    Redemption of chips, tokens and plaques
⦁    Front money withdrawals
⦁    Safekeeping withdrawals
⦁    Advances on any form of credit, including markers and counter checks
⦁    Payments on bets, excluding slot and video lottery terminal jackpots
⦁    Payments by a casino to a customer based on receipts of funds through wire transfer for credit to a customer
⦁    Cashing of checks or other negotiable instruments
⦁    Exchanges of currency for currency, including foreign currency
⦁    Reimbursements for customers’ travel and entertainment expenses by the casino


SAR

BSA requires that Casinos file a Casino SAR (SARC) for any transaction conducted or attempted by, at, or through a casino, and involving or aggregating at least $5,000 in funds or other assets, that the casino knows, suspects, or has reason to suspect:


⦁    involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (money laundering);
⦁    is designed to evade the reporting or recordkeeping requirements of the BSA (structuring);
⦁    has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the casino knows of no reasonable explanation for the transaction after examining the available facts; or
⦁    involves use of the casino to facilitate criminal activity.


Don’t be a victim of your own making

Casino operators ought to encourage an environment of compliance, due diligence and control as well as staying abreast of all regulatory developments.   Consult your AML and tax specialist in order to stay compliant.  

 https://www.jdsupra.com/legalnews/did-you-know-that-casinos-are-financial-42736/