US casinos got a stern talking to at last week’s Global Gaming Expo (G2E) in Las Vegas over their lack of vigilance in combating money laundering. Jennifer Shasky Calvery, director at the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), told G2E attendees that many casino execs viewed themselves as being in the entertainment business, not the financial services business. Shasky Calvery said these execs appeared to be saying they didn’t have as much responsibility for anti-money laundering (AML) diligence as banks and other financial institutions.
Shasky Calvery said these execs ‘feel it is not their responsibility to protect their institutions, and our financial system as a whole, from being used by illicit actors.” She suggested there was “a culture within some pockets of the industry of reluctant compliance with the bare minimum, if not less.” Her warning was given extra emphasis by Las Vegas Sands’ recent decision to pay $47.4m to avoid criminal prosecution for their enthusiasm in catering to the gambling whims of the (alleged) Mexican Walter White.
CORAL, ASPERS CALLED ON CARPET OVER DRUG MONEY
Extra extra emphasis came via the UK Gambling Commission’s recent admonition of UK bookies Coral and casino firm Aspers for their role in enabling a convicted criminal to launder over £1m in drug money. On Monday, the Commission publicly spanked Coral Racing Limited for pocketing £90k via the individual’s activities, which took place “over an extended period” before the perp was arrested by Durham police for conspiring to supply Class A controlled drugs.
The Commission stated that while Coral had filed a Suspicious Activity Report on the individual, “little or no challenge was made by the operator, although there were extensive and realistic opportunities to do so.” The Commission twisted the knife by saying Coral had “recognized the significance of the customer from a commercial perspective,” even offering him a free trip to the races, while ignoring the fact that the individual had gambled “considerably more” than he “could reasonably have been expected to afford.” At the time of his arrest, the perp’s only legit form of income was state benefits.
The Commission criticized Coral for leaving much of its AML responsibilities to shop-level staff, while requiring those same staff to get head office approval to accept wagers “over a relatively low threshold amount.” Aspers was similarly criticized for not applying the same “rigor of their commercial management systems to the regulatory risks involved.” The perp gambled over £100k at one Aspers facility, incurring “tens of thousands” in losses to the casino.
The Commission noted that both Coral and Aspers had cooperated fully with the investigation, and had altered their practices accordingly. In addition, Coral had agreed to pay £52k to the Responsible Gambling Trust plus £35k to the Commission to cover the cost of the investigation. Aspers was dinged £40k, some of which went to “an appropriate charity” while the rest went to the Commission for costs.
ONLINE POKER TO THE RESCUE!
It’s worth noting that in March, Austrian professor Friedrich Georg Schneider gave a presentation to members of the European Parliament in which he said land-based and online gambling combined accounted for a mere 0.5% of all money laundering activity. Schneider, who toils as an economist at Johannes Kepler University in Linz, singled out online poker as a particularly crap way of laundering money, considering the high transaction costs. The consultants at Goldmedia even concluded that even if the entire online poker market were turned over to Al Qaeda for the sole purpose of laundering money, the total sum processed would barely top 3% of the money laundered in Germany alone.
