31 casino

How casinos can protect themselves

Still, there many ways that casinos can strengthen their AML efforts.

Forge stronger links between marketing and risk management. A casino’s marketers and customer relations officials are tasked with bringing in top-spending patrons, using such efforts as discounts, loyalty cards, and other promotions. However, it’s becoming increasingly clear that player development must work hand in hand with customer due diligence. No longer can high-rolling customers avoid serious background checks simply because they are willing to spend millions of dollars at a casino each year.

For example, Jackson Rancheria’s Robert Ashton says that his casino’s marketing team issues a “Top 25” report every few weeks — a list of which clients were spending the most, their win potential, and so forth — and uses it to push for deeper background checks. “I want to make sure all of those people are legitimate. Any time someone hits our top 25 for the first time in a year, they get put through a background investigation. We take what could be a potential problem — money coming in and out in large quantities — and investigate those people for legitimacy.”

Greater emphasis on physical observation. Having sharp eyes and ears on the casino floor is important. If a customer appears to be avoiding detection, such as playing for large stakes but declining to use a customer card, the casino could use close-circuit cameras to track the patron’s movements, including out to the parking lot.

“Even if we don’t have a name, we’ll have a license plate, make, and model for a suspicious activity report,” Ashton says. If the casino finds the car in question returning for multiple visits, particularly with different patrons, that would be another red flag.

Improved use of technology for background checks. It’s important to remember that casinos are in an arms race against money launderers and other criminals. The more sophisticated criminals get, the greater a casino’s need for enhanced information technology.

“We’re connecting all the pieces and constantly trying to obtain customer identification,” Ashton explains. “Whether that’s getting people to sign up for cards, getting vehicle information, or using third-party online investigation software and negative media searches to look for such indicators as a patron’s work affiliation not matching the money they’re spending. You’re looking for priors and relatives and associates with priors.”

Another red flag is an affiliation with the marijuana industry. While marijuana is legal in states like California, federal banking laws prohibit distributors and growers from funneling cash through mainstream financial institutions. Consequently, casinos must always be on high alert for people attempting to convert marijuana money into chips or credits.

Get in front of FinCEN

In any case, says White & Case’s Jeremy Kuester, casinos that are waiting for guidance from FinCEN on their AML procedures are not doing their business any favors.

“Casinos shouldn’t be waiting for FinCEN, they should be constantly improving their AML programs and they should be doing it for their own business purposes,” Kuester says. “But understanding appropriate risk depends on a good culture of compliance. That requires leadership, an acceptance of compliance as a high priority, and adequate funding to make it happen.”