ICT Views

Non-compliance not worth the gamble for casinos

by: (Editorial Manager) on

Vegas-style casinos are not something traditionally associated with the British high street, but it’s not uncommon today to see casinos in towns and cities across the country.

The Gambling Act (2005) laid the foundations for this casino-growth, in which the UK government unveiled plans for large Vegas-style casinos that would boost local economies.

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Mega-sized casinos were eventually few in number, but smaller casinos have been continually opening over the last decade; a casino currently in development in Leeds will be the third biggest in the UK once complete.  

In addition to these land based casinos, online gambling has rocketed too, with the UK considered the world’s biggest market for online gambling, with the yearly gross gambling yield for online gambling in the UK estimated at £4.3 billion by the Gambling Commission..    

This proliferation is not just limited to the UK: the Asia-Pacific region is proving to be gradually receptive to the expansion of casinos beyond Macau, and in the ancestral home of brick and mortar casinos, the United States, the number of punters at the tables has shown no sign of abating.

Casinos online boast impressive player participation figures globally, with faster technology aiding its growth. In Europe alone online gambling generates $15m annually, according to the European Commission.

The Risk

For countries and casino operators, the rising number of people engaging in gambling represents opportunity, but also risk.

Casinos have long been vulnerable to money laundering (ML) due to the traditionally cash-intensive nature of the business and the historical perception of casinos being an easy target for criminals looking to launder money.   

This perception, however, has for a while now been outdated, with regulators like FinCEN enforcing penalties on casinos non-compliant with anti money laundering (AML) measures.

A recent example is that of the Hawaiian Garden Sands, a Californian casino that was handed a $2.8m penalty by the US Treasury for repeated AML violations and for lacking a culture of compliance.

The Garden Sands’ casino licence is up for renewal, and the Californian Bureau of Gambling Control (BGC) are not pleased with the casino’s behaviour. The BGC in a statement said that licencing the Garden Sands after they had admitted AML violations ‘undermines the public trust that licenced gambling does not endanger the public health, safety and welfare’.

In other words, the Garden Sands is at risk of being denied a new gambling licence due to its failure to comply with AML measures.

High Stakes

In the UK’s National Risk Assessment 2016, casinos received a low risk ML level, but the assessment declared that casinos and retail betting still ‘present a higher risk than most sectors in the UK’, and that despite a Gambling Commission-led focus on ML, ‘there remains considerable scope for further improvement’.  

The Fourth Anti Money Laundering Directive (4AMLD) has widened the scope for anti money laundering measures, with due diligence checks obligatory on gambling transactions of €2,000 or more. This directive will now cover the entire gambling sector, having previously been applied only to casinos. 

Authorities are also continuing their efforts to prevent ML in casinos: in January, FinCEN gave guidance to casinos on sharing SARs in a bid to curb money launderers in casinos.

Even the current US President has faced probing by FinCEN. Trump Taj Mahal was reprimanded by FinCEN after ‘wilful and repeated violations of US law’, and violating anti money laundering measures. The casino was handed a $10m penalty in 2015; Trump Taj Mahal is now closed.

So the stakes are high (pun intended) for casinos, both land based and online. If compliance in the gambling industry is not up to scratch, you can bet on substantial financial penalties for casinos in the years ahead.

Visit the ICA website if you’re interested in taking the Specialist Certificate in Money Laundering Risk in Betting and Gaming.  

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ICT will be exhibiting at ICE Totally Gaming, 7th-9th February at the ExCeL Centre London.   


irene said...
revenue from casinos and bettings ought to be heavily taxed because the participants are men who want to live lucky. All men ought to earn their living and not live on luck or lack of it.
June 14, 2017 09:33
Charleigh said...
Fiindng this post. It's just a big piece of luck for me.
March 30, 2017 09:04


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