Expert: Tribal casinos need to increase AML compliance efforts

November 14, 2019 6:00 PM
  • Buck Wargo, CDC Gaming Reports
November 14, 2019 6:00 PM
  • Buck Wargo, CDC Gaming Reports

NASHVILLE – The commercial casino industry raised their compliance to deal with anti-money laundering issues.

Story continues below

An AML expert warned Indian gaming leaders the bad actors have been pushed to tribal and single-property casinos.

Joel Borsh, vice president of North America for FinScan AML/Gaming Compliance, told the TribalNet conference that Indian casinos could be asked to assist federal investigators to increase their descriptive entries of patrons and their associates. The tribes may need to record license plate numbers when they file the federally required Suspicious Activity Reports.

Borsh said the Financial Crimes Enforcement Network (often referred to a FinCen) will likely increase its requirements for casinos to do more verification in determining the sources of wealth for players on gaming floors as a way to deal with money laundering.

The bureau, which is part of the U.S. Department of the Treasury, wants tribal casinos to mirror their commercial casino counterparts.

Borsh said casino compliance departments have a “greater ability to capture IDs, such as passports and other documents.” The efforts have decreased cases of fraud, he said.

“But we know they’re going to other places,” Borsh said. “Several of the major casinos in Las Vegas, as they implemented these solutions, have actually watched the players go across the street to their other property where it wasn’t implemented yet.”

The coming push to determine gaming customer’s wealth comes as the California Consumer Privacy Act takes effect in January and gives consumers more control over their personal information that extends beyond California’s border.

Determining sources of wealth is still one of the gaming industry’s biggest issues, Borsh said, citing comments from his clients.

“As we’re able to collect more data and determine who our clients are, the California laws are headed in the opposite direction because at anyone’s request you must be able to produce that data for that client and take requests to be able to destroy that data,” Borsh said.

He suggested there’s been a great improvement in the casino industry to file Suspicious Activity Reports with the Treasury Department – up 70% in the last five years – but federal officials want additional information.

The commercial casino industry has invested heavily in knowing customers through extending credit lines. Also, casino are being asked by local, federal and state law enforcement authorities to provide documentation about whether people are staying at their hotels.

“The availability to automate and do criminal background checks and being able to see real estate transactions and geolocate individuals at the touch of a button is where the industry is going,” Borsh said. “The ability to pull all of the criminal records, phone numbers and Social Security numbers are the requirements that are starting to increase on the side of FinCen and being able to fill out SARs (suspicious activity reports) more diligently.”

Federal investigators are seeking more information to build anti-money laundering cases when someone is gambling tens of thousands of dollars a day and doesn’t show the wealth. Borsch said federal officials worry the customer could be laundering money for a drug cartel.

“They are asking a lot of casinos to help them because they know people come to the casino and expose them to trouble,” Borsh said. “The determination on the source of wealth is about protecting casinos to make sure the people who are gaming are gaming legally.”

Borsh said he met with the FBI a month ago said the SAR forms submitted by casinos weren’t designed for dealing with identifying people, and that’s why they will be seeking more personal information such as body types, people with them and even license plate numbers.

Borsh cited one recent case in Western Pennsylvania. A casino he declined to name had a nun unwittingly laundering money on behalf of parishioner who was associated with a drug dealer. The casino caught the nun gambling $28,000 into a slot machine.

The nun was captured on a fake high roller night and was taken into custody by the FBI. She cooperated with authorities to avoid charges.

“It is those types of stories pushed by law enforcement onto the casino so they can get better information,” Borsh said.