AGA Updates Anti-Laundering Compliances
The American Gaming Association has released an update of its Best Practices for Anti-Money Laundering Compliance to further safeguard the gaming industry. The revised guidelines have been based on the practices of U.S. financial crime regulators and focus specifically on enhanced risk assessment and customer due diligence measures.
The revisions also take into account the increase in gambling activity on mobile and the burgeoning national sports betting industry. In a recent interview, the American Gaming Association’s (AGA) Senior Director of Gaming Policy Elizabeth Cronan discussed why the updates were due.
Cronan described the challenge that casinos face by being regulated by the same laws that apply to banks and other financial institutions, and that their guidelines would need to be more specific to casino environment nuances. “The most recent set of the best practices is really reflective of our focus on the expanding US sports betting market,” Cronan said. “That’s a key area and then, of course, expansion into mobile and interactive gaming.”
The AGA first released its Best Practices guideline in 2014, making it the first industry to collectively establish a comprehensive set of best practices for Anti-Money Laundering compliance. Both the AGA’s Best Practices and its compliance with the federal Bank Secrecy Act have been commended by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
“As one of the most highly regulated industries in the United States, it is imperative we take every possible step to discourage illicit behavior and safeguard the integrity of the casino industry. Through our ongoing partnership with FinCEN, the Treasury Department, and law enforcement, our industry continues to be a leader in compliance”– Bill Miller, CEO, American Gaming Association
The latest updates are in response to new information released by FinCEN that outlines the latest tactics that can be used to target money laundering. However, while the policies will help guide member casinos in the AGA to ensure they comply with laws, the AGA is not a government association and can therefore not legally enforce the practices.
Instead, the AGA is a lobby group that often pushes to shape federal and state-level regulations for the industry. Explaining the use of the practices, the AGA has explained that anti-money laundering “programs are risk-based, and casinos have different risk profiles, so individual casinos will have good reasons for departing from or modifying a procedure in this document.”
Despite the flexibility of the policies, they were designed with all of their members in mind. To achieve this, they invited companies large and small, from major chain operators to smaller regional casino operators and tribal groups to share their concerns about laundering. This ensured that the measures would reflect the diversity of the industry and tackle the complexities found in each casino.
The Prevalence of Money Laundering
While strict regulations exist to prevent the activity, this hasn’t stopped criminals from continuing to target casinos as a viable money laundering venture. Recently, the Hawaiian Gardens card room in California was fined $3.1-million fine for failing to control the activity, and residents in British Columbia, Canada were shocked by recent revelations that it has become a major global hub for laundering.
Additionally, Macau Casino LLC, a Washington State-based casino operator was last month fined $1.25 million after a dealer was discovered to be facilitating money-laundering activity with knowledge from the casino’s general manager. Another operator, Imperial Pacific International, was scrutinized by the FBI for possible money laundering activities.
A major anti-money laundering tactic that financial regulators are pushing casinos to adopt is encouraging casinos to transition from cash transactions to purely digital operations. It is believed that by reducing the cash flow through casinos, fund laundering opportunities are decreased.
At this year’s Global Gaming Expo (G2E), AGA president Bill Miller highlighted that digital transactions could provide “new tools to more easily identify customer backgrounds, the source of money being gambled, and early warning signs of potential criminal activity,” to authorities. Despite the prevalence of money laundering in the industry, the AGA has announced that 49 percent of American adults have a favorable view of the gaming industry, up to four percent since 2018.
The news, which was also revealed at the G2E, coincides with a surge in casino visitation and a growing belief that the casino industry supports economic growth. Last year, 44 percent of American adults visited a casino, which is up by 9 percent since 2018. “The favorability of our industry has never been higher,” said Miller.