BSA/AML Programs for the Casino Industry
Casinos have resisted building compliance programs that mirror those of other financial institutions, arguing that their business is entertainment rather than financial services. However, gaming establishments provide many “bank-like” services. They accept and send wire transfers of funds, exchange cash for chips and chips for cash, allow the deposit of funds, and pay out in cash and checks. As a result, casinos are classified as financial institutions in the Bank Secrecy Act regulations.
Not surprising, regulators increasingly are challenging these non-bank financial institutions to step-up their game in building Bank Secrecy Act/Anti-Money Laundering (BSA/AML) programs. The casino industry is currently a focus of interest for the Financial Crimes Enforcement Network, the Department of Justice, and the Internal Revenue Service. These regulators and enforcement agencies have imposed fines on a number of well-known casinos for AML violations within the past few years. It is in a casino’s best interest then, not to take any chances by relying on prior BSA/AML program standards followed in the gaming industry. Instead, casinos may want to look to traditional financial institutions and model their BSA/AML programs against the more robust programs of these established banking organizations.
Guidehouse expert Anne Minogue examines AML challenges for casinos and provides best practices for casinos to help guard against money laundering.