Compliance for Casinos

At 31 U.S.C. § 5312(X), Congress has included the following array of casinos in the broad definition of financial institution:

(X) a casino, gambling casino, or gaming establishment with an annual gaming revenue of more than $1,000,000 which—

Because casinos are financial institutions, casinos are required to maintain anti-money laundering compliance programs which are commensurate with the unique risks posed by each individual casino. Therefore, it is important to hire a compliance attorney to ensure your casino operates within set forth requirements. 31 C.F.R. § 103.64 sets forth the special minimum requirements for casino anti-money laundering compliance. In short, a casino’s anti-money laundering programs must have all of the following elements:

(i) A system of internal controls to assure ongoing compliance;

(ii) Internal and/or external independent testing for compliance. The scope and frequency of the testing shall be commensurate with the money laundering and terrorist financing risks posed by the products and services provided by the casino;

(iii) Training of casino personnel, including training in the identification of unusual or suspicious transactions, to the extent that the reporting of such transactions is required by this part, by other applicable law or regulation, or by the casino’s own administrative and compliance policies;

(iv) An individual or individuals to assure day-to-day compliance;

(v) Procedures for using all available information to determine:

(A) When required by this part, the name, address, social security number, and other information, and verification of the same, of a person;

(B) The occurrence of any transactions or patterns of transactions required to be reported pursuant to § 103.21;

(C) Whether any record as described in subpart C of this part must be made and retained; and

(vi) For casinos that have automated data processing systems, the use of automated programs to aid in assuring compliance.

31 C.F.R. 103.64; see also 31 U.S.C. 5318(h).

However, it is not enough for the casino to simply have a compliance program. The attorneys at our anti-money laundering law firm know that the program must be designed to protect against the unique money laundering and terrorist financing risks posed by the individual casino, and the program must actually be implemented. Additionally, to the extent that a casino employee (including dealers and cage personnel) will confront money laundering activities, they must be included as part of the program and given instructions regarding how to report suspicious activity. Finally, the program must be strong enough to withstand not only internal and external reviews, but the scrutiny of the IRS, which has been delegated the authority to audit casinos for compliance with the Bank Secrecy Act. Suffice it to say that the IRS has an extensive background auditing casinos for taxation purposes, and is well equipped to audit casinos for AML purposes too. The IRS is also perfectly willing to use information discovered during a compliance audit for tax purposes, and vice versa. A robust program, implementation, and the buy-in of all relevant casino employees are all critical, and the failure to have such a program can expose the casino and its directors to civil and criminal liability.

The AML lawyers at Fuerst Ittleman David & Joseph have represented a wide array of financial institutions in IRS-BSA audits, OFAC licensing issues, grand jury investigations, state investigations, criminal and civil litigation, and commercial transactions. Fuerst Ittleman David & Joseph’s anti-money laundering compliance team is led by Andrew S. Ittleman, Esq., who is a certified anti-money laundering specialist and a member of the National Money Transmitters Association and the National Association of Criminal Defense Lawyers.

If you or your company has a question related to its anti-money laundering compliance obligations, please contact Andrew S. Ittleman, Esq. at aittleman@fuerstlaw.com or 305-350-5690.