January 2016
The U.S. gaming industry is one of the most heavily regulated and controlled business sectors in the world. In addition to comprehensive and stringent state gaming regulations, U.S. gaming operations are subject to federal anti-money laundering (AML) laws. This research study, commissioned by the American Gaming Association and facilitated by Ernst & Young LLP, was undertaken to examine the gaming industry’s commitment to and significant investment in preventing money laundering and terrorist financing activity.
Overall, companies are spending more money on AML compliance, developing new systems and processes, and becoming more ingrained into the company. Patron due diligence is a prime example of the industry’s willingness to improve their AML programs. Casinos are hiring specific personnel to implement due diligence, with a focus on language skills and investigation backgrounds. Further, casinos are approaching hiring with an analytical perspective to ensure they have the most qualified personnel on the front lines of their operations. Similarly, casinos indicated that their exams and interaction with regulators has increased both in frequency and in scope. Law enforcement and regulators report that the industry has improved favorably over the past five years. Casinos have evolved their efforts from basic BSA reporting to comprehensive risk management. Law enforcement agents are seeing these results in the real world. The SARs that casinos are filing are more descriptive and more expansive than they were previously. Importantly, the sheer volume of SARs filed in the industry has increased dramatically. This provides law enforcement with more information for them to be able to react to potential money laundering and terrorist financing.
Over the past decade since the last FATF mutual evaluation, the gaming industry is substantively more advanced in its AML compliance. The casinos have addressed many key areas and continue to make improvements every day. This increase in AML compliance focus has resulted in an increase in the overall AML compliance budgets, especially in the past five years, with more increases planned. The gaming industry is more successful in establishing risk-based AML programs than they have been at any point in the past. The US gaming industry is raising the bar. Casinos are strengthening their risk management and control functions to better combat the money laundering and terrorist financing risks they face.