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Speaker: Casino industry can take steps to trace high roller's bankroll

12 June 2014

The head of the federal agency assigned to investigate money laundering crimes told a Las Vegas audience Thursday the casino industry can discover the origins of a high roller’s bankroll in the same way a casino host determines that customer’s favorite wine or music preferences.

Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network, known as FinCEN, said the casino industry has the same responsibility as traditional financial institutions to police and report any suspicious customer activity, which includes investigating the source of large gambling funds.

During her keynote address at the Bank Secrecy Act Conference at Red Rock Resort, Calvery said the casino industry can employ investigative measures used to determine the social needs and desires of a high-end customer to that same player’s large bankroll.

“Casinos invest heavily in sophisticated monitoring tools to track a wide range of customer activities and to understand their customers’ preferences,” Calvery said. “These same kinds of monitoring and customer service capabilities can and should be leveraged for (anti-money laundering) purposes.”

The gaming industry has come under fire by FinCEN, which is overseen by the U.S. Treasury Department, to comply with anti-money laundering regulations found in the act. Calvery said casinos have the capability and technology needed to investigate the source a gambler’s funds.

The daylong conference was organized by the State Bar of Nevada, but the audience of 500 included more that just attorneys. Casino executives and gaming regulators also listened to the Calvery’s opening remarks. The speech was her second public appearance in Las Vegas since September, when she delivered similar remarks at the Global Gaming Expo.

Casino leaders have worried that subjecting the industry to the same requirements as banks and other financial institutions could keep certain high rollers away from the gaming tables.

“Unfortunately, there is no one-size-fits-all approach to (anti-money laundering laws),” Calvery said.

She also warned the casino operators not to jeopardize their reputations or violate the law in order to “please” a customer.

“A casino’s capability for knowing its customers’ preferences and credit information, combined with your security technology, can and should be leveraged to piece together relevant information to understand your customers’ source of funds,” Calvery said.

The American Gaming Association, which co-sponsored the conference, has held meetings between casino leaders and FinCEN representatives, which Calvery acknowledged during her talk as being “productive.”

AGA President Geoff Freeman introduced Calvery and said after the talk that her remarks “were a big step forward” from the comments she made at G2E.

He said FinCEN is developing a “clearer understanding” of how the industry operates. The interaction with the gaming leaders, Freeman said, has been helpful to both sides.

“One senior-level casino official said to me today a single customer is not worth our license,” Freeman said.

Calvery said in September the industry was being watched.

In August, Las Vegas Sands Corp., struck a deal with federal prosecutors and paid a $47.4 million settlement to avoid criminal charges in connection with a 2006 and 2007 investigation into money laundering by a customer at The Venetian.

Caesars Entertainment Corp. disclosed in October that Caesars Palace was being investigated for possible money laundering allegations.

Calvery said Thursday casinos weren’t “simple cash-intensive businesses.” She called casinos “complex financial institutions” that extend credit and conduct financial transactions worth millions of dollars every day.

“Casinos must continue their progress in thinking more like other financial institutions to identify (anti-money laundering risks),” Calvery said.

Under the Bank Secrecy Act, casinos are required to report currency transactions by any person of more than $10,000 in cash each day. In addition, casinos are required to report suspicious customer activity when it comes to those financial transactions.

She said the buying and cashing in of chips by customers are not always simple transactions.

“While the vast majority of these transactions are purely for entertainment purposes, casinos can serve as the vehicle for the use, movement, and concealment of ill-gotten gains,” Calvery said.

“This is a risk inherent in all financial institutions.”