Apart from presenting an overview and background on anti-money laundering (AML) rules and procedures for casinos in both Macao and the USA, this paper aims to examine the differences in their regulatory approaches with regard to their existing AML reporting processes and discusses possible weaknesses in their respective regulatory regime.

1. Why is this important? The nature of services and products offered by the gambling industry can.
2. Treasury Secretary Lloyd Bentsen said regulations taking effect Thursday, December 1, will give casinos new tools to counter money laundering. 'Our goal is to shape effective counter-money laundering policies while reducing unnecessary regulatory burden,' Bentsen said.
3. FINANCIAL Intelligence Centre says casinos must be properly regulated to counter money laundering and terrorism financing. FIC compliance and prevention director Diphat Tembo said there was need to have a national gaming authority that has experts and trained inspectors with knowledge to regulate the operations of the casinos in the country.
4. There were suspicions at the B.C. Lottery Commission that some staff at the province's largest casino were choosing 'not to get' Canadian regulations on suspicious transactions, B.C.'

FINANCIAL Intelligence Centre says casinos must be properly regulated to counter money laundering and terrorism financing.

FIC compliance and prevention director Diphat Tembo said there was need to have a national gaming authority that has experts and trained inspectors with knowledge to regulate the operations of the casinos in the country.

Speaking to The Mast, during a three-day virtual workshop on “life cycle of casino, financial investigation and prosecution” organised by AGA-African Partnership for Justice and Financial Intelligence Centre – Zambia in Lusaka, Tembo said casinos were viable business ventures that could contribute to the country’s gross domestic product (GDP) if properly managed.

“They are supposed to generate income for themselves as casino business but also as a country we need to tax them and we should be able to tax casinos and be able to say, out of whatever happened through the year, this is what the casinos have contributed to the treasury,” he said.

“Currently, we have got 38 casinos that are operating in Zambia, that is a huge number. For example, in Mozambique, they have about five casinos. If you look at how they are managed and how much they are contributing to the national treasury, it is amazing. They are only five but if you look at the licensing fees, they are huge.”

Tembo insisted that licensing of casinos in Zambia should be revised to control and monitor what was going in and out.

“Apart from looking at money laundering and countering financing of terrorism, what are we realising in terms of revenues that are coming from 38 casinos operating in Zambia? How much are they contributing to the national treasury? I think there is need for an overhaul. For me the process to come up with national gaming authority that is going to come up with experts, inspectors, people that understand the industry, I think that will do a great deal,” he said.

Asked on how much Zambia was losing through financial crimes happening through casinos, Tembo said nothing had been quantified yet.

However, he said casinos were being suspected to be used in financial terrorism.

“If casinos had controls in place, if they had been reporting current transaction reports as well as suspicious transactions, we should be able from the FIC, to probably quantify a bit of some figures,” Tembo said. “Even if we do not have a figure, if there are no controls in these institutions, which other competent authorities such as law enforcement agencies, the Financial Intelligence Centre and others have identified, that this sector is not properly regulated… Even if you don’t have figures, definitely that institution, that sector can be abused and I do believe that casinos are susceptible to be abused. If we had control in that sector and the sector is properly regulated, we should be having statistics but today if you tell me, from the 38 casinos, how much in terms of currency transactions, how much has been reported in that sector, even ourselves as FIC we are not seeing that coming through.”

Tembo said there was need to up the game to ensure that there was control on what was going and leaving the casino business.

He said any cash transaction above US $10 million has to be reported to the Financial Intelligence Centre.

“Casinos are a cash-based transaction industry, and there is a lot of cash that is going in. If that is not reported, the question of saying are we losing that money can be answered in the affirmative. That yes, because no hindrance to that regulation to report then there is that loss which is going on. I do believe this is one of the sectors that we need to up the game as a country but also as a competent institution,” said Tembo.

The Zambia Tourism and Hospitality (Casino) Regulations No.93 of 2016 mandates casino operators to obtain a license from the ministry to run gambling facilities in the country.

Money Laundering Through Casinos

However, recently auditors estimated that the state has suffered a 37,000 pounds loss of revenue due to some casinos operating without licences.

Treasury Secretary Lloyd Bentsen said regulations taking effect Thursday, December 1, will give casinos new tools to counter money laundering.

'Our goal is to shape effective counter-money laundering policies while reducing unnecessary regulatory burden,' Bentsen said. 'We want to enable financial institutions, including casinos, to be more effective and responsive in taking steps to prevent and detect money laundering, and in supporting swift enforcement actions.'

The regulations come under the Bank Secrecy Act, or BSA, which is at the core of Treasury's program to combat financial crimes including money laundering and tax evasion. It is administered by Treasury's Financial Crimes Enforcement Network, known as FinCEN.

The most important provisions of the newly effective regulations include:

• a requirement that casinos establish and maintain written BSA compliance programs that emphasize the use of automated systems, the need for independent audits of compliance, and the training of casino employees; and
• enhanced requirements for customer identification with the opening of a deposit or credit account at a casino.

Although the regulations go into effect on December 1, there will be a six-month period for casinos to put the new procedures in place. The regulations were originally issued in March 1993 and were scheduled to become effective in September 1993. Their effective date was extended until December 1994 while Treasury determined how best to implement the measures. The final product reflects comments by state regulators and representatives of the casino industry.

As part of its effort to reduce regulatory burden, Treasury has withdrawn some provisions of the regulations which could have imposed significant costs on casinos and required significant changes in gaming procedures, without clear off-setting compliance benefits. Under the reduction efforts, Treasury has:

Anti Money Laundering Regulations

• eliminated a provision from the original regulations which would have required casinos to record and verify the identification of any customer whose transactions in currency on a gaming day reached $3,000 (and to track those transactions at $500 intervals);
• withdrawn a provision that casinos obtain missing customer information when a customer's multiple transactions in aggregate, exceed $10,000 in currency;
• eliminated a provision requiring casinos to maintain a chronological record identifying all transactions occurring at the cashier's window; and
• withdrawn a requirement that casinos maintain a list of customers who are known by aliases.

'We believe that the 1993 Regulations can be safely altered in light of our intention to issue regulations in the near future requiring financial institutions, including casinos, to report suspicious transactions and establish counter-money laundering measures including, 'know your customer' policies and programs,' said Ronald K. Noble, Treasury's Under Secretary for Enforcement. 'With this in mind, the modifications to the 1993 regulations should not reduce the value of information that casinos are required to maintain or report, or more importantly, reduce the level of BSA compliance by casinos.'

Today's actions are the first of several steps Treasury will take within the next year to apply its new counter-money laundering programs to casinos and other non-bank financial institutions. Thus, for example, the details of the required compliance program include terms that anticipate Treasury's adopting of suspicious transaction reporting requirements applicable to casinos, among others.

In addition, FinCEN anticipates publishing in the near future a notice of rulemaking that would propose making certain Indian gaming establishments subject to appropriate provisions of the BSA and, as a related matter, would propose exempting many small casinos from reporting and recordkeeping rules designed for larger establishments.

Although casinos in Nevada have been exempted from compliance with the reporting and recordkeeping requirements contained in the BSA regulations since 1985, the exemption requires Nevada to maintain a state casino regulatory system which 'substantially meets the reporting and recordkeeping requirements' of the BSA regulations, including those that became effective on December 1.