Disclaimer: The contents of this article are meant to provide a general understanding of the subject matter. However, this article is not intended to provide legal or other professional advice and should not be relied on as such.
Casino requirements under the Bank Secrecy Act (BSA) are imposed to detect and prevent money laundering, terrorist financing, and other criminal acts. Suspicious activity reports for casinos are one of these requirements, mandated for all gaming institutions that also qualify as financial institutions. As providers of casino anti-money laundering (AML) software solutions, our experts review important suspicious activity reporting guidance for casinos.
While you may already be familiar with some of the following information, we find it helpful to include some reminders and definitions.
Which Enterprises Must Comply With BSA requirements for Casinos?
The IRS states that casinos and card clubs in the United States with Gross Annual Gaming Revenues in excess of $1,000,000 are categorized as financial institutions, and thus must comply with BSA requirements and regulations.1 If your gaming institution meets this prerequisite, it must comply with all casino regulations under the BSA, such as Title 31, and is required to file suspicious activity reports when necessary.
What is a Suspicious Activity Report?
A suspicious activity report is a document that a financial institution must file with the Financial Crimes Enforcement Network (FinCEN) when a case of fraud or money laundering is suspected.
When to File a Suspicious Activity Report
Suspicious activity reports for casinos have both clear prerequisites mandating that a report be filed, along with other instances that are more open to interpretation. Since these reports are filed when fraud or money laundering is ‘suspected’, guidelines for filing are not always black and white.
Clearly Defined Mandates Under the BSA for Casinos
While the report leaves some instances up to interpretation, there are some clearly defined requirements. Under the BSA, casinos must:
- Keep records of cash purchases of negotiable instruments
- Report transactions that exceed $10,000 (as a daily aggregate)
- Report any activity that may indicate money laundering, tax evasion or other criminal activities
- Develop and implement a program to ensure and monitor proper compliance with the BSA2
When Should Casinos File Suspicious Activity Reports?
With the requirements explained above, you may be wondering what activities indicate instances of money laundering or other criminal activity. This is why it is key, and federally mandated, to develop and implement an effective AML compliance program to ensure your business is continuously monitoring transactions, and actions of your clientele.
Some instances that the IRS deems to be potentially suspicious actions are the following:
- Exchanging many small bills for large ones
- Exchanging several monetary instruments, such as traveler’s checks, for one casino check
- Regularly conducting currency transactions that are just below $10,000
- Purchasing chips and then, after minimal gambling, redeeming the chips for a check
- Using other patrons to cash-out chips
- Supplying other patrons with cash to purchase chips
- Using the casino purely for its financial services
- Using identification that appears to be altered or forged2
An effective monitoring program will ensure that your casino identifies additional instances of potential money laundering and crime such as the examples above.
What is the Timeframe for Filing Relevant Suspicious Activity Reports?
Suspicious activity reports for casinos must be filed no later than 30 calendar days after the initial detection of the instance(s).3
If a suspicious activity is detected without an identified suspect, the casino filing may be delayed an additional 30 calendar days. No filings may be filed later than 60 calendar days after the incident(s).3
How to Write a Suspicious Activity Report
As compliance experts, we have compiled tips and suggestions for writing suspicious activity report narratives when you identify suspicious activity, as well as tips for tracking your investigation once a report is filed.
Implementing an Effective BSA Compliance Program for Your Casino
If your casino qualifies as a financial institution it is conducting a substantial amount of daily transactions. As a result it may seem difficult to be able to effectively monitor all client activity.
At Alessa, we provide you with tools for your BSA AML compliance program so that you can comply with federal regulations for your business. Our AML compliance software solutions include real-time customer due diligence, transaction monitoring, sanctions screening and more.
Check out additional tips on implementing an effective suspicious activity reporting program, and contact our experts today to ensure your casino meets compliance standards efficiently and effectively.
Foundations for Casino AML Compliance
To learn more about AML compliance and suspicious activity reports for casinos watch our webinar on the foundations for AML compliance for casinos.