The importance of a culture of compliance

A casino's Risk based approach on an Anti-Money Laundering program (AML program) is the
foundation upon which it can manage money laundering and terrorist financing risks, identifying
areas of concern that might adversely affect the licensees reputation. In this article we see that
the true culture of compliance is the key to success overtime.

According the Bank Secrecy Act (BSA) law in USA, a casino, with an annual gaming revenue of
more than $1,000,000 is considered a financial institution.

The broader the array of financial services available at the casino (e.g., front-money deposit
accounts, marker limit/credit extensions, wire transfer procedures, gives an opportunity for a
money launderer to exploit several different services for illicit purposes.

Regulatory risk is associated with not meeting the AML/TF regulatory obligations such as: not
reporting suspicious matters, not fulfilling customer identity verification requirements, or not
having an AML/CTF Program could derive in enforcement actions from gaming authority.

To safeguard the risks associated with money laundering practices, AML programs are risk based
and should identify and assess their money laundering risks and adopt effective measures to
mitigate those risks.

The United States Department of the Treasurys Financial Crimes Enforcement Network (FinCEN)
promulgates and enforces rules designed to prevent and detect money-laundering activities.
Lets see recent cases of enforcement actions on casinos that provides a clear vision that even
having AML programs and compliance officers bypassed the controls:

Case 1: In April 2016, FinCEN announced an enforcement action against Nevadas Sparks
Nugget, Inc. including a $1 million fine, for willful disregard of AML laws. According officials, the
casino Lacked a Culture of Compliance. hosting convicted embezzlers and disregarding repeated
alerts to suspicious transactions by its own compliance manager.

Case 2: In July 2016, Californias Hawaiian Gardens casino was fined of USD 2.8 million by the
FinCEN. The investigation found that The Gardens continued to conduct business with patrons
they themselves had identified as suspicious even these customers repeatedly refused to
provide identification information. IRS examiners also found that certain employees of The
Gardens were helping customers structure transactions to avoid SAR filing requirements.

As these two enforcement actions illustrate, that these two companies lacked a culture of
compliance from the tone at the top.

What is a Casinoss culture of compliance?

A tone a the top effort drived by the board of directors and oversight officials to support the
compliance efforts to mitigate any Money laundering risks by creating mitigate AML program,
internal controls, policies and procedures and designating a compliance officer. Monitoring
Customers gaming activities and identification is a key issue in the compliance mandatory rules.
 Although the contents of each compliance program will differ based on the size of the company
and the nature of its operations, certain due diligence procedures are standards. The pillars of a
Risk based AML program are:

In the bill of projects under consideration in Brazil will be mandatory:

- Independent technical reports for the bingo and slots machines accredited by the Federal Police
Department
- Control Management System (CMS) in order to allow Union entities to monitor bets and prizes
payment in each of its modalities.

These systems shoud let monitor the gaming level of any player (daily, monthly, etc.) to assess
possible Money laundering activities.

In the circumstance that a company faces with criminal or regulatory problems, the demonstration
of a compliance program and a history of commitment to that program can serve as a mitigating
circumstance as it has been seen in other countries.