Featured Expert Contributor, White Collar Crime and Corporate Compliance
Gregory A. Brower is Chief Global Compliance Officer for Wynn Resorts. He also serves on WLF Legal Policy Advisory Board and is the WLF Legal Pulse’s Featured Expert Contributor, White Collar Crime and Corporate Compliance.
Stephanie L. Brooker is a partner in the Washington, DC office of Gibson, Dunn & Crutcher LLP. She is former Director of the Enforcement Division at the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and a former federal prosecutor.
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On July 28, 2022, the American Gaming Association (AGA) published its third edition of the Best Practices for Anti-Money Laundering (AML) Compliance. American Gaming Association, Best Practices for Anti-Money Laundering (AML) Compliance, July 28, 2022. The document reflects the strong interest a heavily regulated industry has in pro-active compliance activity, a commitment that other industries and their membership organizations can look to when contemplating similar guidance.
The AGA is the premier national trade group representing the U.S. gaming industry, which is one of the most heavily regulated and controlled business sectors across the globe. In addition to comprehensive and stringent state gaming regulations, most U.S. gaming operations are also subject to federal anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements.
The AGA publishes these Best Practices as a resource for the gaming industry and attempts to distill the practices that a wide range of gaming operators—including land-based casinos, sports books, and interactive and mobile gaming sites—have adopted to comply with legal and regulatory requirements and expectations.
Prior to this July 2022 edition, the AGA released its last iteration of the Best Practices in 2019. The prior edition was issued before the COVID-19 pandemic and before Congress passed the Anti-Money Laundering Act of 2020. The 2020 law made significant changes to the federal AML regulatory regime under the Bank Secrecy Act.
This new edition provides a much needed update and guidance on navigating emerging trends and the evolving legal landscape applicable to the gaming industry:
- The Best Practices provides guidance on how casinos should use risk assessments to help inform and implement risk-based internal controls related to new technologies and gaming modalities as part of their AML programs. Of note are the unique characteristics involving new games and current events that casinos should keep in mind during these assessments.
- With many states having legalized sports betting and iGaming, the Best Practices highlights risks that may arise in the case of sports betting, such as when a patron places a bet with a legally operating sports book on behalf of an unidentified third party, concealing the origin and owner of the funds or betting on both sides of the line. In addition, the Best Practices notes how race and sports books may be potential targets for money launderers because colluding parties can bet on both sides of a game or an event, thereby offsetting their exposure. Similarly, identity and credit card theft fraud rings may target the online gaming environment to establish fraudulent accounts with stolen identity information and to fund those accounts with fraudulent payment instruments.
- With the rapidly changing landscape surrounding cryptocurrencies, the Best Practices advises that there have been a number of cases in which cryptocurrency has been involved in money laundering or other illegal activity. The AGA suggests that the best practice is to require any virtual currency to be converted to US dollars prior to being used for gaming. By doing this, the activity will be subject to the same currency transaction reporting and suspicious activity reviews and reporting as all other transactions conducted within the casino.
Th Best Practices also includes, among other revisions, updated guidance and definitions and expanded red flag indicators regarding compliance best practices for gaming companies. With the industry rebounding from the pandemic, this guidance should help inform casinos and gaming businesses on how to craft and implement a tailored and robust AML program.