Exclusive: Casino trade group releases first industry standards

Reuters News
Posted: Dec 04, 2014 9:02 AM

By Brett Wolf

WASHINGTON (Reuters) - Under pressure from the federal government, the trade group for the U.S. casino industry has released the first ever set of best practices aimed at helping the industry police itself for money laundering activity.

"For a number of years, individual properties and companies within the casino industry have made anti-money laundering compliance a priority, but the best practices are really the first time the industry came together as one to tackle this," American Gaming Association Chief Executive Geoff Freeman said in an interview.

The document was to be made public on Thursday.

Since mid-2013, casinos have been on notice they must step up their compliance with the Bank Secrecy Act, the primary U.S. anti-money laundering law, which has required them to report large cash transactions for decades and since 2002 has obliged them to report customers' suspicious activity.

For those that fail, there is an increasing threat of civil or even criminal penalties from the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and the Justice Department.

But even as casinos scramble to comply, a rulemaking push on the back burner at FinCEN could add to their burden, requiring them to scrutinize the source of high-rollers' funds, a source familiar with the matter said.

FinCEN makes and enforces anti-money laundering rules pursuant to the Bank Secrecy Act.

The 17-page AGA best practices document, which was released to FinCEN on Wednesday, was developed by about 20 casino compliance officers and lawyers overseen by AGA's Bank Secrecy Act compliance unit. It outlines money laundering risks, regulatory requirements and compliance strategies.

The document says casinos should take extra steps to determine where high-roller customers' money originated, especially those from jurisdictions of concern. Macau, a Chinese territory where several American casinos operate, is one top area of concern for U.S. officials.

In March, Thomson Reuters reported FinCEN was weighing a rule to shed light on the source of certain gamblers' money. That was put on hold because of other rulemaking priorities, a source familiar with the matter said on condition of anonymity.

Casino executives began feeling heat from federal authorities in August 2013, when Las Vegas Sands Corp agreed to pay $47 million to settle with Justice over anti-money laundering failures.

In October 2013, Caesars Entertainment Corp disclosed FinCEN was investigating a subsidiary, Desert Palace Inc, over purported BSA compliance failures.

(Editing by Doina Chiacu)