Casinos: The prevention of money laundering and combating the finance of terrorism

The licensing objectives
According to the UK "Gambling Act 2005” the licensing objectives are:
• preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime,
• ensuring that gambling is conducted in a fair and open way, and
• protecting children and other vulnerable persons from being harmed or exploited by gambling.

Gambling Commission
The Gambling Commission regulates gambling in the public interest. It does so by keeping crime out of gambling, by ensuring that gambling is conducted fairly and openly, and by protecting children and vulnerable people from being harmed or exploited by gambling. The Commission also provides independent advice to the government on gambling in Britain.

Principles to be followed
All casinos must have appropriate systems and procedures to forestall and prevent money laundering and terrorist financing. To achieve this they should:
• develop systems and controls that are appropriate for their businesses;
• adopt a risk-based approach that is flexible, effective, proportionate and cost effective;
• have full commitment from, and responsibility resting with, senior management;
• regularly assess the adequacy of their systems and controls;
• maintain, where necessary, records of customers and transactions that meet the needs of law enforcement investigations tackling money laundering and terrorist financing;
• provide initial and ongoing training for all staff;
• support their nominated officers with resources and authority to operate objectively and independently;
• engage with law enforcement bodies and the Gambling Commission by reporting suspicious activity; and
• participate in feedback and best practice forums.

Casino operators
All casino operators must have a nominated officer holding a personal management licence issued by the Commission.
Operators must establish and maintain appropriate polices and procedures relating to:
• customer due diligence measures and ongoing monitoring;
• reporting;
• record-keeping;
• internal control;
• risk assessment and management; and
• the monitoring and management of compliance with, and the internal communication of, such policies and procedures (staff training).
The operator’s policies and procedures should cover:
• the arrangements for the nominated officer to report to senior management;
• the systems for customer identification and verification, including enhanced arrangements for politically exposed persons;
• the circumstances in which additional information in respect of customers will be sought in the light of their activity;
• the procedures for handling suspicious activity reports, covering both staff reporting and transmission to Serious Organised Crime Agency (SOCA);
• the mechanisms for contact between the nominated officer and law enforcement or SOCA, including the circumstances in which appropriate consent should be sought;
• the arrangements for recording information not acted upon by the nominated officer, with reasoning why no further action was taken;
• the monitoring and management of compliance with, and the internal communication of, such policies and procedures, including details of how compliance is monitored by the nominated officer;
• supporting records in respect of business relationships;
• the arrangements for communicating the policies and procedures to all relevant staff; and,
• staff training records.
Operators must ensure that their staff understand the regulations and implement casino policy and procedures in the context of their client base including the requirements for customer due diligence (CDD), record keeping, and suspicious activity reports.
All casino operators must ensure staff are trained and kept up to date with requirements including a minimum of ensuring that all relevant employees are:
• made aware of the law relating to money laundering and terrorist financing; and,
• regularly trained in how to recognise and deal with transactions and other activities which may be related to money laundering or terrorist financing.
Staff should also understand:
• the casino’s attitude to the risk-based approach;
• how the casino will track customers when customer due diligence is not undertaken on entry to the casino;
• how the casino will undertake customer due diligence;
• how politically exposed persons (PEPs) will be identified; and,
• the role of the nominated officer and what to do in his absence.

Licensed casino staff
Staff must report to the nominated officer any knowledge or suspicion of money laundering whether by players, guests or staff.
Staff must follow casino policies and procedures for:
• CDD including enhanced requirements for PEPs;
• seeking SOCA consent to allow participation in gaming; and,
• record keeping for those who exceed the threshold or who have a business relationship.

Nominated officers
Nominated officers have responsibility for:
• reporting to senior management on Anti-Money Laundering/Counter Terrorism Financing activity;
• receiving internal disclosures
• deciding whether these should be reported to SOCA; and,
• if appropriate, making such external reports.

They must have the authority to act independently in carrying out their responsibilities, and have access to sufficient resources to carry out their duties. Casinos must have contingency arrangements in place for when no nominated officer is in post, e.g. if on annual leave, long-term sick leave or if they leave the employ of the casino.

Casinos – Banks – CIFs
It is worth noting that the specific provisions of casino legislation regarding Anti Money Laundering are almost identical with the relevant Anti Money Laundering legislation for banks and Cyprus Investment Firm (CIFs)