The Financial Action Task Force (FATF) highlighted in its December 2016 Mutual Evaluation Report on the United States’ Measures to Combat Money Laundering and Terrorist Financing the “excellent results” in compliance and supervision in the U.S. gaming industry during the period of 2007 to 2016. The report noted that efforts by regulators and the gaming industry have led to enhanced AML and Combating the Financing of Terrorism (CFT) compliance. The assessors specifically mentioned the efforts of the American Gaming Association (AGA), including its study, Investing in America’s Financial Security: Casinos’ Commitment to AML Compliance. The FATF report also included several recommended actions related to gaming.
The FATF report recommended that FinCEN, the IRS, and state regulators “should continue their focus on casinos, including [IRS] examination work, and expand it to include some of the smaller and less sophisticated players.” Given the progress made and significant engagement of FinCEN with the industry over the past several years, we believe the bar has been raised for AML/CFT programs. Accordingly, we recommend that all gaming companies, especially those with less mature AML/CFT programs, evaluate their programs against FinCEN guidance and the AGA Best Practices for AML Compliance. This should be a priority because we expect further enforcement activity in 2017.
The FATF report also focused on information sharing. The report includes a recommended action to “operationalise casinos’ participation in information sharing” under section 314(a) of the USA Patriot Act and “further encourage” use of section 314(b). All gaming companies should examine their readiness for handling section 314(a) requests. Those companies with more mature AML/CFT programs also should consider whether to participate in voluntary information sharing under section 314(b).
Finally, we believe that the approach taken by FinCEN and the gaming industry over the past several years may provide a useful model for other industries, such as real estate, for how to partner with FinCEN to develop AML/CFT compliance requirements that effectively address money laundering risks in a manner that reflects the operating environment of the industry.
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