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5) Chukchansi Gold Resort & Casino reserves the right to change or cancel this promotion at any time. 6) Chukchansi Gold Resort & Casino Management will resolve any dispute or situation not covered by the official rules in a manner that is fair to all concerned. 7) Taxes, fees, licenses and insurance are the sole responsibility of the winner(s). For example, a casino may attempt to complete an IRS Form W-2G or an IRS Form 1042-S for a customer's slot jackpot or video lottery terminal win of $5,000 or more and a customer may: (i) fail to provide customer identification; (ii) furnish a legitimate type of identification document that a casino believes is false or altered (e.g., address. Swedish BankID is a personal and easy method of secure electronic identification and signing on the Internet. Individuals who have a Swedish personnummer (Swedish national identification number) can obtain Swedish BankID through their bank. A BankID has the same value and is used the same way, regardless of the bank that issued it.

This document provides guidance interpreting the requirements of the Bank Secrecy Act ('BSA') regulations¹ as they apply to the casino and card club industries in the United States. We additionally published frequently asked questions for casinos and card clubs as FIN-2007-G005 on November 14, 2007. Casinos and card clubs may continue to rely on the guidance contained in FIN-2007-G005, which has not been incorporated into this publication.

Section A: 31 C.F.R. § 103.11 Casino and Card Club DefinitionsQuestion 1: Do Nevada slot route operators operate 'casinos' for purposes of rules implementing the BSA?

Answer 1: A Nevada slot route operator is a gaming licensee who, pursuant to a participation agreement, owns and maintains slot machines at three or more business establishments. The business establishments are owned and operated by other persons.² While it is common for Nevada slot route operators to lease space from a property owner (usually referred to as a 'space lease agreement'), and to pay a monthly rental payment to such a landlord, the Nevada slot route operator may have its own 'nonrestricted' license to conduct gaming on the premises.³ A Nevada slot route operator with a 'nonrestricted ' license to conduct gaming at a business establishment would be operating a 'casino' at the business establishment for purposes of FinCEN's BSA rules,⁴ if gross annual gaming revenue of its operations at the business establishment exceeds $1 million.⁵ Question 2: Are gaming or gambling establishments with gross annual gaming revenue of $1,000,000 or less subject to any BSA requirements?

Answer 2: Yes. The requirement to file a FinCEN/IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, for currency⁶ received in a trade or business applies to businesses that are not casinos or financial institutions under FinCEN's rules. The term 'cash' for Form 8300 reporting purposes includes coin and currency of the United States or any other country, and may include cashier's checks, bank drafts, traveler's checks, or money orders received over $10,000 in one transaction (or two or more related transactions) during a 12-month period.⁷ For purposes of illustration, the following gaming and gambling establishments or nongaming related businesses normally would be subject to Form 8300 requirements:⁸ (i) casinos or card clubs with gross annual gaming revenue of $1,000,000 or less; (ii) tribal bingo halls, off-track betting parlors, greyhound tracks, horse race tracks, or (iii) a casino hotel, gift shop, cater/banquet service, conference/seminar facilities,¹⁰ etc. The BSA prohibits any person from structuring transactions to evade reporting or recordkeeping requirements under the BSA.¹¹ Section B: 31 C.F.R. § 103.22 Currency Transaction Reporting RequirementsQuestion 3: What is the definition of a gaming day and what effect does it have on aggregating a customer's reportable currency transactions?

Answer 3: A gaming day is defined as the normal business day of a casino or card club. If a casino or card club offers 24-hour gaming, the term 'gaming day' means that 24-hour period by which a casino or card club keeps its books and records for business, accounting, and tax purposes.¹² A casino or card club must have only one gaming day, which is common to all its gambling operating divisions or departments. Maintaining one gaming day facilitates the aggregation of transactions for purposes of currency transaction reporting.Question 4: Is a card club required to file FinCEN Form 103, Currency Transaction Report by Casinos ('CTRC'), for customer currency buy-ins at poker games?

Answer 4: Yes. When a customer at a poker table buys-in¹³ for more than $10,000 in chips with currency, in a single transaction or a series of related transactions in the same gaming day, a card club must assure compliance with CTRC requirements for such transactions. The same would apply to other non-house banked card games (e.g., games commonly referred to as 'California Games'¹⁴ in certain card clubs or card rooms). If the card club has knowledge of the transactions, it must report the transactions on a CTRC.¹⁵

A card club must implement a program reasonably designed to assure compliance with the BSA.¹⁶ For the reporting of transactions in currency, regardless of whether a card club has a multiple transaction log, it must have a system of internal controls, procedures for using all available information to determine and verify, when required, the name, address, Social Security or Taxpayer Identification Number, and other identifying information for a person, as well as train personnel.¹⁷

In addition, BSA rules impose record retention requirements on card clubs.¹⁸ These requirements are independent of the requirement to implement a program for ensuring compliance with the BSA. FinCEN understands that many card clubs have internal controls that include a multiple transaction log to record currency transactions above a given threshold (usually $2,500 - $3,000). A card club that prepares or uses records of currency transactions, including currency transaction logs or multiple currency transaction logs, must retain the records.¹⁹ Also, the record retention requirement applies to transactions conducted in card or poker rooms located within the facilities of casinos. Also, please note that to comply with regulations implementing the BSA, card clubs may need to prepare and retain records not otherwise produced in the ordinary course of business.²⁰ Similarly, a casino that prepares or uses multiple transaction logs or other records for monitoring the gaming activity of a customer (e.g., in a poker room) must retain the records.²¹Question 5: Must a casino or card club have an internal control for customer chip redemptions at a cage?

Answer 5: Yes. Casinos and card clubs are required to develop and implement written programs that are reasonably designed to assure compliance with all applicable BSA requirements. This includes establishing internal controls²² to monitor compliance with currency transaction reporting requirements with regard to known customers. Neither 31 C.F.R. § 103.22(b)(2) nor (c)(3) states specifically that a casino or a card club must create a record of transactions that are less than $10,000, a casino or card club would need an effective internal control for customers (known or unknown).²³ Therefore, to be able to identify large chip redemptions at a reasonable threshold under $10,000 that were paid with currency that may have been structured to avoid reporting requirements or otherwise to obscure large cash out transactions, a casino or card club must have an internal control for customer chip redemptions at a cage. A casino or card club must aggregate customer currency transactions that occur on the floor or the cage, when it has obtained knowledge of such transactions either from examining records or actual knowledge (including of large chip redemptions for currency).²⁴ For similar reasons, a casino would need a method for identifying large redemptions at a reasonable threshold under $10,000 of a betting ticket, token, or 'TITO' ticket²⁵ that were paid with currency to a known customer.²⁶

Question 6: To what extent is a casino required to aggregate credit card advances with other types of cash out transactions for currency transaction reporting purposes?

Answer 6: A casino is required to file a CTRC on currency transactions by or on behalf of any customer that, alone or when aggregated, exceed $10,000 in a gaming day. A casino must aggregate and report multiple currency transactions when it has knowledge that such transactions have occurred. Therefore, when a customer uses a credit card at an automated teller machine ('ATM') or other cash access devices located in a casino or on casino property,²⁷ and then goes to a cage cashier to receive currency for this advance on credit, such transactions would be subject to currency transaction reporting, and they would need to be aggregated with other cash out transactions in which a casino has obtained knowledge to determine whether they exceeded $10,000 to a customer in a gaming day.

Question 7: Is a casino or card club chip runner, casino floor person, or a casino host required to be listed as an agent on a CTRC when they conduct currency transactions on behalf of customers?

Answer 7: No. When cashing out chips in excess of $10,000 in a gaming day for a customer who is actively gambling, a chip runner²⁸ or a floor person,²⁹ is acting within the scope of employment and is an agent of the card club or casino; they are not agents of a customer with respect to such transactions. Accordingly, the chip runner or floor person would not be listed as an agent of a customer on a CTRC. Similarly, a casino host,³⁰ acting within the scope of employment, is an agent of a casino, when conducting any currency transactions in excess of $10,000 in a gaming day for a customer and would not be listed as an agent of a customer on a CTRC. If these casino or card club employees handle currency transactions in excess of $10,000 for a customer, they would be required to obtain identification information from that customer for completion of a CTRC.

Question 8: When a customer refuses to provide a Social Security Number for completing a CTRC, can a casino or card club write 'Refused' in Item 7 of the CTRC?

Answer 8: No. When a casino or card club has obtained actual knowledge of a reportable currency transaction, it must obtain the identification information (such as customer name, permanent address, and Social Security Number ('SSN')) needed to file a complete and accurate CTRC, and then verify the name and address 'before concluding the transaction.' If the customer's state driver's license does not contain a Social Security Number and the customer does not provide a paper Social Security Number card issued by the Social Security Administration, a casino or card club can enter a verbally provided SSN on a CTRC. Also, FinCEN understands that a casino may have the customer complete an IRS Form W-9, Request for Taxpayer Identification Number and Certification,³¹ to obtain a person's correct Taxpayer Identification Number³² or, if the customer has a deposit or credit account with the casino, the casino will review the account to obtain the SSN since the SSN is required at the time that the account is opened.³³ In all cases, a casino or a card club must file a CTRC for reportable transactions with all of the required identifying information that it has obtained from a customer, government records it maintains and/or other verified internal records.³⁴

Question 9: Are two separately licensed, but jointly-owned riverboat casinos that are operating from the same dock and sharing certain information systems, required to aggregate currency transactions by the same customer that occurred at both casinos?

Answer 9: No. Each casino licensee is a separate financial institution for purposes of complying with currency transaction reporting. Two riverboat casinos that are under common ownership and common management, share certain information systems, maintain similar accounting and internal control procedures, or use the same docking facilities, but which have separate licenses, are not required under 31 C.F.R. § 103.22(b)(2) and (c)(3) to aggregate and report customer currency transactions that occurred at both facilities.³⁵ Nonetheless, for two riverboat casinos with automated data processing systems that are closely integrated, automated programs for compliance with the BSA must provide for the use of these systems to aid in assuring compliance with identifying transactions that appear to be suspicious and that are conducted between the two casinos by known customers³⁶ (e.g., to evade the $10,000 reporting requirement through structuring).³⁷

Question 10: Is a casino required to file a CTRC on customer jackpot wins from casino games other than slot jackpot or video lottery terminal wins?

Answer 10: Yes. A casino is required to file a CTRC on customer jackpot wins paid in currency from casino games other than slot jackpot or video lottery terminal wins.³⁸ These include among other games, bingo (traditional),³⁹ Caribbean stud poker, keno, or let it ride poker.⁴⁰ These transactions may need to be aggregated with other cash out transactions.

Section C: 31 C.F.R. § 103.21 Suspicious Transaction Reporting Requirements

Question 11: May a casino share information with another casino concerning potential suspicious activity?

Answer 11: Yes, casinos may utilize Section 314(b)⁴¹ information sharing to work together to identify money laundering and terrorist financing. Also, casinos can utilize Section 314(b) information sharing with depository institutions and money services businesses. Section 314(b) as implemented by 31 C.F.R. § 103.110, establishes a safe harbor from liability for a financial institution or association of financial institutions that voluntarily chooses to share information with other financial institutions for the purpose of identifying and, where appropriate, reporting money laundering or terrorist activity (if required notification, verification and information security is in place). Section 314(b) permits sharing information relating to transactions that a financial institution suspects may involve the proceeds of one or more specified unlawful activities listed in 18 U.S.C. §§ 1956 and 1957, which include an array of fraudulent and other criminal activities.⁴² The safe harbor afforded by Section 314(b) is only available to financial institutions that are required to implement an anti-money laundering program, which includes, for example, depository institutions regulated by a federal functional regulator,⁴³ casinos, and money services businesses.⁴⁴

Section 314(b) does not replace the existing obligations of financial institutions to file suspicious activity reports when required. Please note that the Section 314(b) process cannot be used by a casino to exchange information with another casino about customers conducting non-criminal financial activities, such as card counting. Also, please note that the process cannot be used to share a copy of a filed FinCEN Form 102, Suspicious Activity Report by Casinos and Card Clubs ('SARC') or the fact that it was filed, with another financial institution.⁴⁵ However, the underlying information in the SAR may be disclosed as long as the existence/fact that a SAR has been filed is not revealed. For additional information on the Section 314(b) voluntary information sharing program, or to submit a notice to FinCEN to share information voluntarily, refer to www.fincen.gov.

Question 12: Is a casino or card club required to file a SARC, or FinCEN Form 109, Suspicious Activity Report by Money Service Business (SAR-MSB), for suspicious money transfers or wire transfers that it receives or sends?

Answer 12: A casino or a card club's requirement to report suspicious activities applies to all types of financial services conducted or attempted by, at, or through a casino or card club. When a casino or card club sells or redeems money transfers or wire transfers within its cage facility, conducted pursuant to a contractual or other arrangement with a money transfer issuer or a bank, it would be required to file a SARC, when it knows, suspects or has a reason to suspect that the transaction or pattern of transactions is both suspicious and involves $5,000 or more. However, if the casino or card club enters into a contractual agreement to lease space within the establishment to a money transfer company and the company's agent(s) operate the business, then the money services business suspicious activity reporting rules would apply and the money transfer company would use FinCEN Form 109 to report suspicious activity.⁴⁶

Question 13: To what extent should casinos and card clubs use the 'other' box in Item 26 on the SARC to describe the type of suspicious activity?

Answer 13: Item 26 on the SARC contains a list of 16 specific types of suspicious activity. Because suspicious transactions may comprise more than one of the listed types of activities, casinos and card clubs should check as many boxes as are applicable (but be sure to check at least one box). FinCEN encourages casinos and card clubs to refrain from checking box 'q' for 'Other' on the form unless the activity is not covered by the existing list of suspicious activities.⁴⁷ Please note that casinos and card clubs must complete Part VI, the narrative portion of the form,⁴⁸ regardless of whether the 'Other' box is checked. FinCEN understands that some casinos and card clubs may have mistakenly interpreted box 'q', 'Other (Describe in Part VI)' to mean that to complete the SARC's 'Narrative,' you must check this box, since it asks a filer to describe the suspicious activity in Part VI. This is incorrect.

Filing forms without checking the appropriate type(s) of suspicious activity or failing to check appropriate boxes describing the types of suspicious activity diminishes their utility to law enforcement and limits FinCEN's ability to sort these particular forms for review and analysis to look for patterns of suspicious activities.

Question 14: What type of records is a casino or card club required to retain to support a SARC that it has filed?

Answer 14: A casino or card club must maintain supporting documentation or business record equivalents⁴⁹ with a copy of the filed suspicious activity report for five years from the date of filing the report. Typically, such documentation may include canceled checks, confessions, credit bureau reports, credit slips/vouchers, deposit/withdrawal slips, multiple transaction logs, player rating and slot club account records,⁵⁰ identification credentials, spreadsheets, photographs, surveillance audio and/or video recording media, and surveillance logs.⁵¹ For casinos that have hotels, and in the absence of any information other than a customer's name, other supporting documentation may include credit/debit cards, guest folios, and safety deposit box registrations.

Question 15: Once a casino or card club files a SARC, what are its ongoing filing requirements when customers continue to frequent the casino or card club and/or conduct additional suspicious activity?

Answer 15: After a casino or card club files a SARC it should report continuing suspicious activity with a report being filed at least every 90 days.⁵² This notifies law enforcement of the continuing nature of the activity, and serves as a reminder to the organization that it must continue to review the suspicious activity to determine if other actions may be appropriate.⁵³ This should continue even if a law enforcement agency has declined to investigate or there is knowledge that an investigation has begun, since the information contained in a SARC may be of interest to other law enforcement agencies as well as gaming regulatory agencies.

Question 16: What does the SAR non-disclosure provision mean to a casino or card club that has filed a SARC?

Answer 16: No financial institution, or director, officer, employee, or agent of any financial institution, who reports a suspicious transaction, may notify any person involved in the transaction that the transaction has been reported, including any person identified in the suspicious activity report. Moreover, a filed SARC, as well as information that would reveal the existence of a SARC (including any document, memorandum, record, log, or work papers that references a SARC) must be treated as confidential.⁵⁴ Therefore, any person subpoenaed or otherwise requested to disclose a SARC or the information that would reveal the existence of a SARC to a source that is not an appropriate law enforcement or regulatory agency, or FinCEN, shall decline to produce the SARC or to provide any information that would reveal the existence of a SARC.⁵⁵ If a casino or card club does receive a request for SARC information (except for those from an appropriate law enforcement or regulatory agency), it must decline the request and notify FinCEN's Office of Chief Counsel at (703) 905-3590.

Question 17: Can a domestic casino parent or headquarters corporation and its domestic casino affiliates, branches, or places of business consult with each other before filing a SARC?

Answer 17: Yes. Under the SAR non-disclosure provisions, there is nothing prohibiting a domestic casino parent or headquarters corporation and its domestic casino affiliates, branches, or places of business from consulting with each other before a SAR form is filed concerning customer accountholder activity that is occurring at more than one of its casinos as part of their parent-affiliate relationship. Also, this would include discussion or sharing any underlying information about a customer and transaction(s) before a SARC is filed.⁵⁶ However, a domestic parent or headquarters corporation and its domestic casino affiliates, branches, or places of business cannot disclose to each other that a SAR form will be filed. Moreover, after filing, further disclosure of the fact that a SAR was filed is prohibited except as permitted under 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e).

Question 18: What type of information may a casino or card club disclose in response to a subpoena, summons, or other process issued in civil litigation that involved suspicious activity contained on a filed SARC?

Answer 18: The BSA does not prohibit the disclosure of internal casino or card club records upon which a SARC is based in response to a subpoena, summons, or other process issued in civil litigation, with all the relevant information pertaining to a customer's gambling activity that occurred at a casino or card club. For example, the prohibition against disclosing a SARC (or information that would reveal the existence of a SARC) would not preclude a casino or card club from disclosing,⁵⁷ internal records such as check cashing account, credit account, deposit account, player rating account, slot club account, customer win/loss statements, monetary instrument logs, multiple transaction logs, audio or video tapes, CD-ROM discs, DVD discs, etc., to a private litigant. Similarly, the prohibition against disclosing SARCs would not prevent the disclosure of BSA records of transmittal of funds or negotiable instruments at or in excess of $3,000 Therefore, whatever information is appropriate and already contained in internal casino or card club records or on other discoverable government records and forms mentioned above can be disclosed in response to a subpoena, summons, or other process issued in civil litigation, except for a SARC form itself or the information that would reveal the existence of the SARC (including any document, memorandum, record, log, or work papers that references a SARC). For assistance with specific requests, please contact FinCEN's Office of Chief Counsel at (703) 905-3590.

Question 19: Since a casino is not required to file a CTRC on slot jackpot or video lottery wins, is it required to file a SARC on slot jackpot or video lottery terminal wins that are suspicious?

Answer 19: Yes. If a casino knows, suspects or has reason to suspect that the transaction or pattern of transactions is both suspicious and involves $5,000 or more (including slot jackpot or video lottery terminals winnings) it must report it as suspicious activity. This is applicable to suspicious activity involving a jackpot win from bingo, Caribbean stud poker, keno, or let it ride poker. The filing requirements pertaining to: (i) IRS Form W-2G, Certain Gambling Winnings; (ii) IRS Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding; or (iii) IRS Forms 1099-Misc, Miscellaneous Income (e.g., pertaining to prizes or awards) are particularly relevant here. See 31 C.F.R. § 103.21(a)(2)(i), which states, among other things, that a transaction requires reporting as suspicious if it is '. . . to avoid any transaction reporting requirement under federal law or regulation.' For example, a casino may attempt to complete an IRS Form W-2G or an IRS Form 1042-S for a customer's slot jackpot or video lottery terminal win of $5,000 or more and a customer may: (i) fail to provide customer identification; (ii) furnish a legitimate type of identification document that a casino believes is false or altered (e.g., address changed, photograph substituted); (iii) furnish a legitimate type of identification document in which the description of the individual does not match the customer's appearance (e.g., different age, height, eye color, gender); (iv) present conflicting identification information (e.g., different address or different spelling or numeration in address; different state driver's license number, or different Social Security Number).

Section D: 31 C.F.R. § 103.36 Casino Recordkeeping Requirements

Question 20: When recordkeeping requirements are similar, except for the dollar thresholds, for casinos as well as all financial institutions, which requirements apply to a casino or card club?

Answer 20: Our rules at 31 C.F.R. § 103.33 list certain records that must be made and retained by all financial institutions including casinos and card clubs. Rules implementing the BSA also include certain recordkeeping requirements specifically for casinos or card clubs. These are set forth in 31 C.F.R. § 103.36. Where the dollar threshold differs between the two provisions, a casino or card club must keep records based on the lower threshold. For example, 31 C.F.R. § 103.36(b)(4) requires casinos and card clubs to retain a record of each extension of credit in excess of $2,500, including a customer's identification and the verification of that identification, despite the fact that the requirement regarding extensions of credit in 31 C.F.R. § 103.33(a) is tied to a threshold of more than $10,000. Also, although the requirements in 31 C.F.R. § 103.33(f) apply to non-bank financial institutions for transmittals of funds in the amount of $3,000 or more, please note that pursuant to 31 C.F.R. § 103.36(b)(5) casinos and card clubs must retain records for international wire transfers at any monetary value. Therefore, when a casino or card club complies with 31 C.F.R. § 103.36(b)(5),⁵⁸ it has satisfied the requirement for 31 C.F.R. § 103.33(f).

Question 21: If a casino scans or microfilms its player rating records, is it required also to keep the paper copy of the record?

Answer 21: No. The BSA requires the retention of the source records (either the originals or microfilm version, or other copies or reproductions of the documents) of all records required to be retained by 31 C.F.R. Part 103. This would include, among other customer records, records prepared or used to monitor a customer's gaming activity (e.g., player rating records, multiple transaction logs). As a reminder, scanned or microfilmed player rating records must be retained for 5 years and filed or stored in such a way as to be accessible within a reasonable period of time.

Question 22: Does a casino or card club have to record a customer's permanent address for BSA recordkeeping requirements or is a P.O. Box number acceptable when it appears on a customer's state driver's license or identification card?

Answer 22: To comply with 31 C.F.R. §§ 103.33(f), 103.36(a), 103.36(b)(1), 103.36(b)(4), 103.36(b)(5), and 103.36(b)(9), casinos and card clubs are required to use due diligence measures to obtain a customer's permanent address.⁵⁹ This means casinos and card clubs are required to obtain and record a customer's permanent address (i.e., permanent street address, city, state name or two-letter state abbreviation used by the U.S. Postal Service, and ZIP code, including any apartment number or suite number and road or road number associated with a permanent address) to comply with these recordkeeping requirements. If a customer is from a foreign country, the state/territory name (or state/territory code) (i.e., Canada and Mexico) and the appropriate country name (or two-letter country code) should be obtained. A casino or card club is required to use all reasonably available information or reasonable alternatives to obtain the needed information to be in compliance with the BSA and should not enter a P.O. Box number unless the customer has no street address. If a customer's state driver's license or identification card contains a P.O. Box number, casinos and card clubs would need to ask a customer for his/her permanent street address. If a customer states he/she has a permanent address, but refuses to provide it, and a casino and card club conducts the transaction, they would not be in compliance with these BSA recordkeeping requirements.⁶⁰ However, if a casino or card club uses due diligence to obtain a customer's permanent address⁶¹ and determines that a customer does not have a permanent address, then a casino can record a customer's P.O. Box number without concern of non-compliance with the above BSA recordkeeping requirements. Nonetheless, in the case when a reportable currency transaction occurs, a casino and card club must file a CTRC involving a cash in and/or cash out.

Section E: 31 C.F.R. § 103.64(a) Compliance Program Requirements

Question 23: Must a casino's anti-money laundering compliance officer limit his duties to BSA compliance matters?

Answer 23: No. Although the BSA requires financial institutions, including casinos or card clubs, to designate an individual or individuals (e.g., a compliance officer and/or compliance committee) as responsible for ensuring that institution's day-to-day compliance with the BSA, the anti-money laundering program requirement permits flexibility by allowing each compliance program to address the characteristics of a particular casino or card club. Each casino and card club should conduct a risk-based analysis of its business (e.g., type of products and services it offers, the locations it serves, and the nature of its customers) to determine, among other things, whether it needs a full-time BSA compliance officer.

Question 24: How can a casino's compliance committee help to assure that a casino complies with the BSA?

Answer 24: Casinos and card clubs are not required under the BSA to establish compliance committees in all instances. Nonetheless, there may be instances in which the risk confronting a casino or a card club would require establishing a BSA compliance committee. FinCEN understands that casinos establish BSA compliance committees as an executive level safeguard to ensure that a casino complies with all applicable laws, regulations, and guidance in a reasonable manner.⁶²

Section F: Other Casino Issues

Question 25: What are the civil penalties for non-compliance with BSA recordkeeping and reporting requirements?

Answer 25: FinCEN may seek civil money penalties of $25,000 a day per violation of any anti-money laundering compliance program requirement. Also, FinCEN may seek: (i) injunctive relief from a court against future violations of the BSA; (ii) civil money penalties of up to $25,000 or more per reporting violation (not to exceed $100,000); and (iii) other appropriate relief. In addition, FinCEN may seek civil money penalties (up to the amount of transaction) for structuring, attempting to structure, or assisting in structuring transactions. These civil sanctions are for willful violations⁶³ and may be applied to any casino or card club that is subject to the BSA, or to any partner, director, officer, or employee of such gaming operations.

Questions or comments regarding the contents of this Guidance should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.

¹ See 31 C.F.R. Part 103.

² See Nevada Revised Statute § 463.018 and Nevada Gaming Commission Regulation 1.170.

³ Nevada gaming statutes define a 'nonrestricted license' to include 'a license for, or the operation of, a slot machine route.' See Nevada Revised Statute § 463.0177(3). A Nevada 'nonrestricted license' or 'nonrestricted operation' also includes, among other things: (i) '. . . license for, or an operation consisting of, 16 or more slot machines;' or (ii) '. . . license for, or operation of, any number of slot machines together with any other game, gaming device, race book or sports pool at one gaming establishment.' See Nevada Revised Statute § 463.0177(1) - (2).

⁴ Only one 'casino' will operate at a given establishment. The party that holds a 'nonrestrictive license' and operates the slot machines pursuant to a participation agreement would be the operator of a casino. See Nevada Revised Statute § 463.245 ('A gaming license may not be issued to any person if the issuance would result in more than one licensed operation at a single establishment, whether or not the profits or revenue from gaming are shared between the licensed operations').

⁵ Each business establishment with gross annual gaming revenues exceeding $1 million would contain a separate 'casino' for purposes of our rules. Nevada licenses gaming activity separately at each location. See Nevada Gaming Commission Regulation 3.010 ('[The Nevada Gaming Commission] may deny an application for a state gaming license if the Commission deems that the place or location for which the license is sought is unsuitable for the conduct of gaming operations'). If a Nevada slot route operator is not operating a casino for purposes of our rules, but qualifies as a check casher, or currency dealer or exchanger, as those terms are defined in 31 C.F.R. § 103.11(uu)), it may be considered a money services business ('MSB') and subject to BSA requirements applicable to MSBs.

⁶ See 31 C.F.R. § 103.30(a)(1).

⁷ See 31 C.F.R. § 103.30 and Section 6050I of Title 26 of the United State Code. The negotiable instruments are treated as currency if they are received in a 'designated reporting transaction' or used in an attempt to avoid the Form 8300 requirement. Designated reporting transactions include the retail sale of consumer durables, collectibles, or travel or entertainment activities. See 31 C.F.R. § 103.30(c).

⁸ However, if these other gambling establishments or nongaming related business satisfy the definition of a money services business ('MSB') in rules implementing the BSA (such as a check casher, or currency dealer or exchanger, as those terms are defined in 31 C.F.R. § 103.11(uu)), then they would be subject to FinCEN Form 104, Currency Transaction Report ('CTR') and other requirements applicable to MSBs.

⁹ For treatment of bingo, see FinCEN's Frequently Asked Questions - Casino Recordkeeping, Reporting and Compliance Program Requirements (FIN-2007-G005, November 14, 2007), Question and Answer 2; for treatment of off-track betting, Question and Answer 5; for treatment of greyhound tracks, Question and Answer 6; and for treatment of horse race tracks, Question and Answer 7. Also, please note that these gambling establishments maybe subject to FinCEN Form 105, Report of International Transportation of Currency and Monetary Instruments ('CMIR') as well as Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. See 31 C.F.R. §§ 103.23 and 103.24, respectively.

¹⁰ See 31 C.F.R. § 103.30(d)(iii).

¹¹ See 31 U.S.C. 5324. Structuring would include attempts to cause Form 8300 not to be filed, or to file a false or incomplete form. The filer can check item 1b on the Form 8300 to report the structuring. In addition, it can be checked if there is an indication of possible illegal activity with the transaction.

¹² See 31 C.F.R. § 103.64(b)(4).

¹³ A buy-in is the amount of funds a player uses to purchase casino chips when commencing play. A buy-in can occur in cash, credit or as a deposit withdrawal.

¹⁴ 'California Games' are games in which one player acts as the bank for the game and the other players bet against the bank. The banker collects all winning bets and pays all losing bets from his/her bankroll. Games may include California Blackjack, Pai Gow Poker, Pai Gow Tiles, and Super Pan.

¹⁵ The BSA defines knowledge for this purpose. See 31 C.F.R. § 103.22(c)(3).

¹⁶ See 31 C.F.R. § 103.64.

¹⁷ See 31 C.F.R. §§ 103.28 and 103.64(a)(2)(i), (a)(2)(iii), and (a)(2)(v)(A).

¹⁸ See 31 C.F.R. § 103.38(d).

¹⁹ See 31 C.F.R. § 103.36(b)(11).

²⁰ See 31 C.F.R. § 103.38(b) which states that 'If no record is made in the ordinary course of business of any transaction with respect to which records are required to be retained by this subpart, then such a record shall be prepared in writing by the financial institution.' Therefore, a card club employee monitoring a non-house banked card game, who has obtained actual knowledge of a reportable currency transaction, would be required to produce a record of the transaction for purposes of currency transaction reporting.

²¹ See 31 C.F.R. § 103.36(b)(8).

²² Independently, other Federal, state and tribal gaming commissions have established requirements for each duly licensed or authorized casino to establish minimum requirements for internal controls (i.e., procedures) over gaming operations for complying with regulatory requirements (i.e., Minimum Internal Control Standards - 'MICS').

²³ A known customer would include one who has a check cashing, credit or deposit account, or whose identity (i.e., name, date of birth, address, and government identification number) has been previously verified on a filed CTRC or any federal tax form containing customer information. Also, an effective BSA internal control will include, in many instances, the creation and retention of records, including those not otherwise produced in the ordinary course of business. See 31 C.F.R. § 103.64(a)(2)(i) and 103.38(b).

Nytt Casino Bank Idabel

²⁴ As illustrative examples, when: (i) customers provide to cage cashiers their identification credentials and/or casino account numbers for such large redemptions for currency (i e., just before, during or immediately after); or (ii) cashiers know who such customers are (i.e., known customers) even in the absence of identification credentials or given account numbers for such redemptions.

²⁵ For a further explanation of Ticket in/Ticket Out ('TITO'), see FIN-2007-G005, Nov. 14, 2007, Question and Answer 16, footnote 57.

²⁶ FinCEN has addressed identifying betting ticket, chip, token, or TITO ticket redemptions for currency at a cage conducted by 'unknown' customers in regards to suspicious activity reporting in Question and Answer 16 of FIN-2007-G005 (Nov. 14, 2007). As discussed in Question and Answer 16, a casino must implement procedures reasonably designed to assure the detection and proper reporting of suspicious transactions. See 31 C.F.R. § 103.64(a)(2)(v)(B).

²⁷ Customers can obtain cash directly from an ATM located within a casino typically up to $500 per day per customer, depending on limits set by their depository institutions. For amounts above that general threshold, an ATM machine prints out vouchers that customers may take to a cage for payment, insert into a slot machine to play, or take to a kiosk machine for dispensing currency. In the event that the advance is dispensed at a kiosk machine, a casino may have knowledge of a customer's transaction based on: (i) its contractual agreement with a financial service provider for the kiosk and (ii) its system of internal controls which typically requires that such a transaction of $1,000 or more be linked to a customer.

²⁸ A chip runner is a card club or card room employee or a casino poker room employee who works on the gaming floor selling or redeeming gaming chips and/or conducting transactions at the cage on behalf of customers who are actively gambling.

²⁹ A floor person is a management employee who supervises the operation of a gaming table within a pit and also prepares a player rating card on each rated customer. Also know as a casino 'rater.'

³⁰ A casino host is a marketing executive of a casino who is responsible for catering to high-end customers' needs. Duties include assisting in the opening of deposit and credit accounts for customers, and issuing complimentary gifts and services to customers to induce their continued patronage.

³¹ IRS Form W-9 requires the customer to certify, under penalties of perjury, that the number shown on the form is the correct Taxpayer Identification Number, and he/she is a U.S. person (including a U.S. resident alien), when the customer signs and dates the form.

³² Please note that the Internal Revenue Service issues an Individual Taxpayer Identification Number ('ITIN') to be used as a tax processing number for individuals who do not qualify to obtain Social Security Numbers ('SSNs'). Since an ITIN is not acceptable as a primary means of identification for purposes of completing Items 14 and 28 on the CTRC, FinCEN will discuss it in the next set of casino frequently asked questions.

³³ In these situations, if a customer refuses to provide a SSN on a Form W-9 for filing a CTRC or completing a Federal income tax form, FinCEN understands that many state and tribal regulators support the standard industry practice of providing a receipt and retaining a customer's chips, tokens and/or tickets until a SSN is provided at which time a CTRC will be completed. FinCEN understands that casinos' experiences have shown that customers will return with their identification credentials to complete the cashing out of large chip, ticket, and/or token transactions which are then followed by the filings of CTRCs. Also, if a casino or card club knows, suspects, or has reason to suspect that a suspicious transaction was conducted or attempted by, at, or through a casino or card club, and involve $5,000 or more a FinCEN Form 102 is applicable. Information that could point to the need for a SARC may include a customer providing a false SSN in the past, refusing to provide a SSN or not providing it within the filing period for the CTRC.

³⁴ See 31 C.F.R. § 103.64(a)(2)(v)(A).

³⁵ A somewhat similar analysis would apply to land-based tribal casinos authorized pursuant to the Indian Gaming Regulatory Act. See 25 U.S.C. § 2701 et seq. Therefore, a tribal government may own more than one tribal casino in the same state, but each casino that is separately licensed by the tribal government or the tribal gaming commission would be considered a separately authorized gaming establishment for purposes of currency transaction reporting, even when the casinos have the same Taxpayer Identification Number for purposes of Title 26.

³⁶ See Question and Answer 5, Footnote 22, for a discussion of known customers.

³⁷ See 31 C.F.R. §§ 103.21(a)(2)(ii), 103.63, and 103.64(a)(2)(vi). FinCEN recognizes that even for two casinos with automated data processing systems and programs that are closely integrated, that for an unknown customer that lacks a casino deposit (i.e., safekeeping, front money or wagering), credit, check cashing, player rating/player tracking, or slot club account, that as a practical matter, it would difficult to monitor such a customer for suspicious activity reporting without associating information from casino surveillance and multiple transaction logs on currency transactions that are less than CTRC reporting threshold at both casinos.

³⁸ A casino is not required to file a CTRC on slot jackpot or video lottery terminal wins in excess of $10,000 in currency. See FIN-2007-G005, Nov. 14, 2007, Question and Answer 12.

³⁹ Traditional bingo is played with cards or paper having a grid of numbered squares corresponding to numbered balls drawn at random; it is not played with any computerized electronic aids.

⁴⁰ For treatment of poker under the BSA, see FIN-2007-G005, November 14, 2007, Question and Answer 2.

⁴¹ See 314(b) of the USA PATRIOT Act of 2001 (Public Law 107-56) which states in part that: ' [u]pon notice provided to the Secretary, 2 or more financial institutions and any association of financial institutions may share information with one another regarding individuals, entities, organizations, and countries suspected of possible terrorist or money laundering activities.'

⁴² See FIN-2009-G002, Guidance on the Scope of Permissible Information Sharing Covered by Section 314(b) Safe Harbor of the USA PATRIOT Act (June 16, 2009).

⁴³ See 31 C.F.R. § 103.120.

⁴⁴ See 31 C.F.R. § 103.125.

⁴⁵ See 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e).

⁴⁶ See 31 C.F.R. § 103.20

⁴⁷ For example, annually over the last six years approximately 25 to 35 percent of forms filed had only the 'Other' box checked or no specific activity checked at all, instead of checking the appropriate type(s) of suspicious activities. Casinos and card clubs should avoid checking 'Other' to complete the SARC's Narrative unless the type of suspicious activity that occurred is not listed in Item 26 (see FinCEN Form 102, Instructions, Item 26).

⁴⁸ For guidance on how to prepare a clear and concise narrative, see FIN-2007-G005, Nov. 14, 2007, Question and Answer 2.

⁴⁹ See FinCEN Guidance FIN-2007-G003, Suspicious Activity Report Supporting Documentation, issued on June 13, 2007.

⁵⁰ Player rating records, which we addressed in 54 F.R. 1165 - 1167 (Jan. 12, 1989), reflect all cash activity recorded on them (regardless of the amount) that have occurred on the gaming floor. Player rating and slot club accounts track gaming activity and serve as a marketing tool to: (i) identify frequent customers as well as higher dollar players, (ii) encourage continued patronage, and (iii) ensure that complementaries are awarded on a cost-effective basis. Casinos utilize internal controls to help to ensure accountability for customers using player rating and slot club account cards. A customer's computerized player rating or slot club account record typically contains a customer's name, permanent address, date of birth, sometimes other identification information (e.g., Social Security Number for purposes of Internal Revenue Code income tax reporting for jackpot wins) as well as a player's gambling activity.

⁵¹ See FinCEN Form 102 (Instructions, page 2).

⁵² See The SAR Activity Review - Trends, Tips & Issues, Issue 10 (May 2006), Section 4, pages 35 - 36, The SAR Activity Review - Trends, Tips & Issue, Issue 2 (June 2001), Section 6, page 35 and The SAR Activity Review - Trends, Tips & Issues, Issue 2 (October 2000), Section 5, page 27.

⁵³ These may include, for example, when required by state, tribal or local gaming regulation, subsequently barring or banning a customer from future gambling and accountholder activity. See SARC, Item 22.

⁵⁴ See 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e). FinCEN proposed amendments to 31 C.F.R. § 103.21 to expand and clarify the confidentiality that should be afforded SARCs and information that would reveal the existence of a SARC. See 74 F.R. 10148, 10157 - 10158 (Mar. 9, 2009). Readers of this guidance should consult that rule, when finalized, for more specific information regarding the appropriate parties to whom a SARC may be provided.

⁵⁵ For examples of appropriate law enforcement and regulatory agencies see The SAR Activity Review, Trends Tips & Issues, Issue 9, October 2005 (pages 43 - 45).

⁵⁶ Also, there is nothing to prohibit a domestic casino parent or headquarters corporation and/or its domestic casino affiliates, branches, or places of business from consulting with affiliated casinos licensed in other countries before a SAR form is filed concerning customer accountholder activity that is occurring among them.

⁵⁷ This FAQ does not address the applicability of any other Federal, state, local, or tribal laws or regulations.

⁵⁸ Please note that there is no monetary threshold in 31 C.F.R. § 103.36(b)(5).

⁵⁹ See 31 C.F.R. § 103.64(a)(2)(v)(A), which requires the implementation of procedures for using all available information to determine, when required by the BSA, a customer's name, address, Social Security Number, and other identifying information and verification of the same. Therefore, since a casino records information on extensions of credit, for example, it must ensure that the records are complete pursuant to 31 C.F.R. § 103.36(b)(4).

⁶⁰ Also, such activity by a customer could be suspicious since it is designed to evade the BSA reporting requirement. See 31 C.F.R. § 103.21(a)(2)(ii).

⁶¹ FinCEN understands that some casinos use the following available information or alternatives to obtain the needed information such as: (i) Federal tax forms filed for certain customers' gambling transactions; (ii) other customer documents such as copies of negotiable instruments (e.g., personal checks); (iii) a reporting agency that provides telephonic or on-line searching of customer identification information for those that applied for casino credit as well as have outstanding casino debts; (iv) public on-line database search engines that do not require a subscription; (v) organizations that provide subscription services to businesses and governmental agencies containing individuals' personal identification information from their commercial databases, or (vi) during subsequent trips when knowledge is obtained about customers' presence through the process of conducting new casino transactions.

⁶² A BSA compliance committee may be composed of all applicable casino departments such as accounting, cage operations, casino credit, finance, information technology, internal audit, marketing, slot operations, surveillance, and table games. A casino's BSA compliance officer is usually a member of such a committee. In-house and/or external legal counsel may provide advice to a BSA compliance committee, but is not necessarily a member. A BSA compliance committee may need to schedule regular meetings to establish and monitor a risk-based approach to its business (e.g., type of products and services it offers, the locations it serves, and the nature of its customers).

⁶³ See 31 U.S.C. §§ 5320 - 5322, and 5324;and 31 C.F.R. §§ 103.57(c), (e), and (f), and103.63.

Purpose

This document provides guidance interpreting the requirements of the Bank Secrecy Act ('BSA') regulations¹ as they apply to the casino and card club industries in the United States.

Section A: 31 C.F.R. § 103.11 Casino and Card Club Definitions²

Question 1: What gaming institutions are subject to the BSA casino regulatory requirements?

Answer 1: A casino or a card club that is duly licensed or authorized to do business as such, and has gross annual gaming revenue in excess of $1 million, is a 'financial institution' under the BSA. The definition applies to both land-based and riverboat operations licensed or authorized under the laws of a state, territory,³ or tribal jurisdiction, or under the Indian Gaming Regulatory Act.⁴ Tribal gaming establishments that offer slot machines, video lottery terminals, or table games,⁵ and that have gross annual gaming revenue in excess of $1 million are covered by the definitions. Card clubs generally are subject to the same rules as casinos, unless a different treatment for card clubs is explicitly stated in 31 C.F.R. Part 103.

Question 2: Is a tribal gaming establishment that offers only bingo and related games considered a casino for purposes of the BSA?

Answer 2: No. FinCEN has the authority under the BSA to define as 'casinos' tribal gaming establishments that offer only bingo and related games. Nevertheless, in addressing the treatment of tribal gaming under the BSA, we have indicated that 'activities such as bingo . . . are not generally offered in casino-like settings and may create different problems for law enforcement, tax compliance, and anti-money laundering programs than do full-scale casino operations.'⁶ FinCEN does not view tribal gaming establishments that offer only traditional bingo (i.e., not contained in electronic gaming devices) and related games in non-casino settings as satisfying the definition of 'casino' for purposes of the BSA.

However, a tribal gaming establishment that offers both bingo and slot machines or table games, for example, would satisfy the definition of 'casino,' if gross annual gaming revenue exceeds $1 million. All gaming activity must go into the calculation of gross annual gaming revenue, including activity that standing alone would not transform an establishment into a casino. This is the same treatment that FinCEN applies to a state-licensed casino that offers poker (which is a non-house banked game) since poker and a poker room are an integral part of a casino operation.⁷

Question 3: Is a 'racino' considered a gaming institution subject to the BSA?

Answer 3: The term 'racino' has not been separately defined nor included specifically in the definition of casino for purposes of the BSA. In general, the term refers to horse racetracks that may be authorized under state law to engage in or offer a variety of collateral gaming operations, including slot machines, video lottery terminals, video poker or card clubs. FinCEN relies on the state, territory or tribal characterization of 'racino' gaming in determining whether an entity or operation should be treated as a casino for purposes of the BSA. If state law defines or characterizes slot machine or video lottery operation at a racetrack as a 'casino, gambling casino, or gaming establishment,' and the gross annual gaming revenues of that operation exceed the $1 million threshold, then the operation would be deemed to be a 'casino' for purposes of the BSA and subject to all applicable requirements.⁸

Question 4: Would a race book or sports pool operator that has a 'nonrestricted' Nevada gaming license be considered a casino for purposes of the BSA?

Answer 4: Yes. Operators or owners of a Nevada race book or sports pool,⁹ that are duly issued a 'nonrestricted' Nevada gaming license,¹⁰ and that have gross annual gaming revenues in excess of $1 million are subject to the casino requirements under 31 C.F.R. Part 103, as well as all other applicable BSA requirements. This would include a Nevada race book or sports pool licensee that obtained a 'nonrestricted' gaming license to operate a race book or sports pool on the property of another casino, or that operates a number of satellite race books and sports pools that are affiliated with a central site book.

Question 5: Is an establishment that offers only off-track betting on horse races considered a casino for purposes of the BSA?

Answer 5: In addressing the treatment of tribal gaming under the BSA, we have indicated that 'pari-mutuel wagering' should receive the same treatment as bingo when determining whether an establishment satisfies the definition of 'casino.' ¹¹ Furthermore, Class III gaming under the Indian Gaming Regulatory Act includes off-track betting on horse races.¹² In addition, in Nevada, an establishment that offers only off-track betting on horse races would need to obtain a non-restricted gaming license. In many instances, off-track betting on horse races will involve pari-mutuel wagering. However, pari-mutuel wagering also applies to sporting events. For purposes of the BSA, FinCEN views casinos to include establishments in Nevada and in tribal jurisdictions that offer only off-track betting, provided the establishments permit account wagering and provided gross annual gaming revenue exceeds $1 million.¹³ In many instances, off-track betting will involve accounts through which customers may conduct a variety of transactions, including wagers, deposits, withdrawals, and transfers of funds. As we recognized when addressing the treatment of tribal gaming under our rules, FinCEN has sought to apply the BSA to 'gaming establishments that provide both gaming and an array of financial services for their patrons.'¹⁴

Question 6: Are 'greyhound racing clubs' that offer table games considered gaming institutions for purposes of the BSA?

Answer 6: If a 'greyhound racing club'¹⁵ generates gross annual gaming revenue in excess of $1 million from poker tables (which would be akin to offering card games in a card club or card room type operation), and if the gaming facility is duly licensed or authorized by a state or local government to do business as a card club, gaming club, card room, gaming room, or similar gaming establishment, it would be subject to the BSA.¹⁶ Therefore, once the $1 million in revenue threshold is exceeded for such poker tables, all gaming activity must go into the calculation of gross annual gaming revenue, including activity that standing alone would not deem an establishment a casino, such as greyhound racing at the track, simulcast for other greyhound racing tracks, simulcast for horse racing tracks, or simulcast for jai alai.

Question 7: Are horse racetracks that offer pari-mutuel or other forms of wagering only on races held at the track considered casinos for purposes of the BSA?

Answer 7: FinCEN does not view a horse racetrack that offers pari-mutuel or other forms of wagering only on races held at the track as a casino for purposes of the BSA. We believe that, under these circumstances, wagering is integral to hosting the race itself. Horse racing as an industry poses 'different problems for law enforcement, tax compliance, and anti-money laundering programs than do full-scale casino operations.'¹⁷

Section B: 31 C.F.R. § 103.22 Currency Transaction Reporting Requirements¹⁸

Question 8: Is a casino required to provide identification information on customers who have conducted reportable multiple currency transactions that were summarized through 'after the fact aggregation?'

Answer 8: The process of checking internal casino computer information, rating cards, general ledgers, and other books and records after the end of the gaming day to find reportable currency transactions is sometimes referred to as 'after the fact aggregation.' After the fact aggregation of currency transactions does not relieve a casino of the requirement to file a FinCEN Form 103 Currency Transaction Report by Casinos ('CTRC') on reportable multiple transactions containing all information required when it has the ability to obtain customer identification information through reviewing internal records in paper or electronic form or through automated data processing systems. The anti-money laundering compliance program requirement obligates a casino or card club to use all available information to determine a customer's name, address, and Social Security number¹⁹ from any existing information system or other system of records for a reportable multiple transaction summarized through 'after the fact aggregation' when a customer is no longer available.²⁰ Also, for casinos or card clubs with automated data processing systems, programs for compliance with the BSA must provide for the use of these systems to aid in assuring compliance.²¹

Therefore, when a casino or card club cannot obtain identification information on reportable multiple transactions because a customer is no longer available, it must check its internal records or systems, including federal forms and records, which contain verified customer information. These records may include credit, deposit, or check cashing account records, or a previously filed CTRC form, IRS Form W-2G (Certain Gambling Winnings), or any other tax or other form containing such customer information. If a casino files a CTRC form lacking some customer identification information in situations described above, it would be required to file an amended CTRC with new identification information on the initial transaction if the customer returns and conducts new transactions of which a casino obtains knowledge.²²

Question 9: Is a casino required to use customer currency transaction information contained in the casino's slot monitoring system for purposes of BSA currency transaction reporting?

Answer 9: For purpose of the BSA, FinCEN does not view customer 'coin-in' and 'coin-out'²³ transactions at a slot machine or video lottery terminal to be reportable as currency transactions because they can represent so-called 'recycled' coin transactions (i.e., casino customers typically engaging in transactions deriving from the same coins just won at electronic gaming devices). If a casino were to use 'coin-in' and 'coin-out' information in its slot monitoring system, it would distort and result in incorrect reporting of currency transactions. However, when a casino has knowledge of customer 'paper money' transactions for slot club accountholders identified through its slot monitoring system, it must aggregate these with other types of 'cash in' transactions of which the casino has knowledge and which are recorded on a casino's books and records to determine whether the currency transactions exceed $10,000 for a customer in a gaming day.²⁴ When a casino has knowledge of multiple currency transactions conducted by or on behalf of the same customer on the same day, it is required to treat those multiple transactions as a single reportable transaction for purposes of determining whether currency transaction reporting requirements have been met. Therefore, the conclusions that apply to the aggregation of two or more transactions involving the insertion of bills into slot machines also would apply to the aggregation of such transactions with other categories of 'cash in' transactions.

It is not necessary to have personally observed the transactions; knowledge can also be acquired from a casino examining the books, records, logs, computer files, etc., that contain information that the currency transactions have occurred after the gaming day is over. Although FinCEN regulations impose no requirement to examine books or records merely for purposes of aggregating transactions in currency and determining whether to file a report on FinCEN Form 103, BSA requirements other than the requirement to report transactions in currency may obligate a casino to examine computerized records. A casino must report transactions that the casino 'knows, suspects, or has reason to suspect' are suspicious and implement procedures reasonably designed to assure the detection and proper reporting of suspicious transactions.²⁵ For casinos with automated data processing systems, automated programs for compliance with the BSA must provide for the use of these systems to aid in assuring compliance,²⁶ including identifying transactions that appear to be suspicious conducted by customers using their magnetic club account cards at slot machines or video lottery terminals.²⁷

Also, casinos should note that activities such as: (i) 'turning off the dollar counter' to prevent obtaining knowledge of reportable transactions (i.e., not using the feature that is readily available in its software program that accumulates U.S. dollars that a customer inserts into a slot machine bill acceptor while using a magnetic slot club account card), or (ii) requesting that a vendor remove a software tool or interface capability from its next software upgrade could result in enforcement action under the BSA.²⁸

Question 10: Is a cash wager/bet that is ultimately lost at a table game considered a transaction in currency for purposes of BSA currency transaction reporting?

Answer 10: Casinos are required under BSA regulations to file currency transaction reports for 'cash in' transactions, which include 'bets of currency.' For purposes of the currency transaction reporting requirements, a cash bet (referred to as a 'money play')²⁹ at a table game would become a 'bet of currency' once the customer can no longer retrieve the bet (e.g., once the dealer has dealt the cards). The cash wager would be a 'cash in' transaction for purposes of currency transaction reporting regardless of whether the customer subsequently wins or loses the wager.³⁰

However, money plays are exempted as reportable cash in transactions to the extent the customer wagers the same physical currency that the customer wagered on a prior money play on the same table game, and the customer has not departed from the table.³¹ Also, money plays are exempted as reportable cash out transactions when the currency used to place the wager is the same physical currency received when the customer wins the bet.³²

Question 11: Is a card club required to maintain and retain records of all currency transactions by customers pertaining to backline betting for purposes of currency transaction reporting?

Answer 11: Yes. The BSA requires card clubs to maintain and to retain the original or a microfilm copy of records of all currency transactions by customers, including without limitation, records in the form of currency transaction logs and multiple currency transaction logs.³³ This requirement applies to card clubs³⁴ that offer the practice of backline betting. Backline betting occurs when a customer, who is standing behind a seated player, places a bet or wager on the betting circle for a specific hand on which a seated player also is wagering. The extra players that stand behind each seat position are known as 'backline betters.' Although backline betting makes it difficult to track customer wagers at the gaming table, a card club must have a procedure in place to identify such transactions for purposes of filing a FinCEN Form 103 (CTRC).³⁵

A card club must have procedures for using all available information to determine and verify, when required, the name, address, social security or taxpayer identification number, and other identifying information for a person.³⁶ In addition, a card club employee or propositional player³⁷ who obtains actual knowledge (i.e., direct and clear awareness of a fact or condition) of unknown customers exchanging currency and chips with each other during poker/card game play in excess of $10,000 in currency, through a single transaction or through a series of transactions in a gaming day, would be required to comply with suspicious activity reporting.

In addition, the BSA requires card clubs to prepare a record of any transaction required to be retained, if the record is not otherwise produced in the ordinary course of business.³⁸ Therefore, when a card club employee or propositional player monitoring a non-house banked card game has obtained actual knowledge of a reportable currency transaction, he/she is required to produce a record of the transaction for purposes of currency transaction reporting and a card club must retain such record for a period of five years.

Question 12: Is a casino required to file FinCEN Form 103 (CTRC) on slot jackpot wins in excess of $10,000 in currency?

Answer 12: FinCEN no longer requires a casino to file a FinCEN Form 103 (CTRC), when it has knowledge of customer slot jackpot wins involving payment in currency in excess of $10,000 (e.g., through a single transaction or through aggregating transactions on multiple transaction logs, W-2G issued log). This BSA currency reporting requirement was amended by 31 C.F.R. § 103.22(b)(2)(iii)(D), which removed jackpots from slot machines or video lottery terminals from the definition of 'cash out' transactions.³⁹

Question 13: In the instructions to FinCEN Form 103, what does the word 'periodically' mean when updating customer identification information for casino customers granted accounts for credit, deposit, or check cashing, or for whom a CTRC containing verified identity has been filed?

Answer 13: The General Instructions to FinCEN Form 103 (CTRC), under 'Identification requirements' state:

For casino customers granted accounts for credit, deposit, or check cashing, or on whom a CTRC containing verified identity has been filed, acceptable identification information obtained previously and maintained in the casino's internal records may be used as long as the following conditions are met. The customer's identity is reverified periodically, any out-of-date identifying information is updated in the internal records, and the date of each reverification is noted on the internal record. For example, if documents verifying an individual's identity were examined and recorded on a signature card when a deposit or credit account was opened, the casino may rely on that information as long as it is reverified periodically.

As part of the requirement to establish an effective system of internal controls,⁴⁰ a casino or card club must determine how often it will reverify a customer's identity to update the identifying information in the internal record for purposes of currency transaction reporting. Given this requirement, it is a common business practice for casinos to maintain a 'known customer' file containing a customer's name, address and identification credential that it has previously verified.⁴¹ Accordingly, a casino or card club checks Item 27b on FinCEN Form 103 to indicate that it has examined an acceptable internal casino record (i.e., credit, deposit, or check cashing account record, or a CTRC worksheet) containing previously verified identification information on a 'known customer.' There is no fixed period that will apply to all casinos for all types of customers. The purpose of this requirement is to keep customer identification information reasonably current. Hence, a casino should develop its own policies based on its own experiences with how often relevant customer information, such as permanent address or last name, might change.

Section C: 31 C.F.R. § 103.21 Suspicious Transaction Reporting Requirements

Question 14: How comprehensive must a casino's procedures be for detecting suspicious activity?

Answer 14: A casino or card club is responsible for establishing and implementing risk-based internal controls (i.e., policies, procedures and processes) to comply with the BSA⁴² and to safeguard its operations from money laundering and terrorist financing, including for detecting, analyzing and reporting potentially suspicious activity. A casino or card club is required to file a suspicious activity report for a transaction when it knows, suspects or has reason to suspect that the transaction or pattern of transactions (conducted or attempted) is both suspicious, and involves $5,000 or more (in the single event or when aggregated) in funds or other assets. The extent and specific parameters under which a casino or card club must monitor customer accounts⁴³ and transactions for suspicious activity must factor in the type of products and services it offers, the locations it serves, and the nature of its customers. In other words, suspicious activity monitoring and reporting systems cannot be 'one size fits all.'

As part of its internal controls, a casino or card club must establish procedures for using all available information, including its automated systems⁴⁴ and its surveillance system and surveillance logs, to determine the occurrence of any transactions or patterns of transactions required to be reported as suspicious.⁴⁵ Also, a casino or card club must perform appropriate due diligence in response to indicia of suspicious transactions, using all available information. Please note that a casino or card club must train personnel in the identification of unusual or suspicious transactions.⁴⁶

Question 15: How can a casino complete suspicious activity reporting ('SAR') for 'unknown' subjects?

Answer 15: Since a casino or a card club is prohibited from disclosing to a customer involved in a suspicious activity that it filed a FinCEN Form 102, Suspicious Activity Report by Casinos and Card Clubs ('SARC'), FinCEN advises using internal records that contain verified customer identification information when filing this form. Such records may include credit, deposit, or check cashing account records or any filed FinCEN Form 103 (CTRC), FinCEN Form 103-N, Currency Transaction Report by Casinos - Nevada, IRS Form W-2G, Certain Gambling Winnings, or IRS Form W-9, Request for Taxpayer Identification Number and Certification.

If the above records or reports do not exist or if additional customer identification information is needed to complete the form, FinCEN advises casinos and card clubs to use any other records that may be on file which contain verified identification such as a driver's license, military or military dependent identification cards, passport, non-resident alien registration card, state issued identification card, foreign national identity card (e.g., cedular card), other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, or a combination of other unexpired documents, which contain an individual's name and address and preferably a photograph. If casinos or card clubs do not have verified identification information on the customer, they should use whatever other sources of customer information are available within internal records, such as player rating records, slot club membership records, a filed IRS Form 1099-Misc, Miscellaneous Income (e.g., pertaining to prizes or awards), or a filed IRS Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, etc.

If no suspect is identified on the date of detection, a casino or card club may delay filing a SARC form for an additional 30 calendar days to identify a suspect. However, a casino or card club must in all events report a suspicious transaction within 60 calendar days after the date of initial detection (regardless of whether a casino or card club is able to identify a suspect).

Question 16: Must a casino identify suspicious customer chip redemptions at a cage for reporting on FinCEN Form 102 (SARC)?

Answer 16: A casino must implement procedures reasonably designed to assure the detection and proper reporting of suspicious transactions.⁴⁷ Also, a casino shall file a report of each transaction in currency involving cash out of more than $10,000 in a gaming day in which it has obtained knowledge including the redemption of chips.⁴⁸ A casino, which is not required by state or tribal regulations to maintain multiple currency transaction logs or currency transaction logs at the casino cage,⁴⁹ nonetheless should develop an internal control⁵⁰ based on a risk analysis to be able to identify chip redemptions that were paid with currency from the imprest drawer⁵¹ to a customer⁵² that involve potential suspicious transactions to assure ongoing BSA compliance. Such an internal control would aid such casinos in monitoring chip redemptions for 'unknown' customers who previously purchased chips and then engaged in minimal or no gaming activity for purposes of suspicious activity reporting.⁵³ As a corollary, a casino should develop an internal control, based on a risk analysis, to be able to identify betting ticket,⁵⁴ token,⁵⁵ and TITO ticket⁵⁶ redemptions that were paid with currency from an imprest drawer to a customer that involve potential suspicious transactions to assure ongoing BSA compliance.

Moreover, the BSA requires casinos to prepare and retain a record of any transaction that is not otherwise produced in the ordinary course of business to comply with these regulations.⁵⁷ Also, records must in all events be filed or stored in such a way as to be accessible within a reasonable period of time.⁵⁸ A casino must retain such record of the transaction for a period of five years.

Question 17: What type of information has law enforcement found to have particular value on FinCEN Form 102 (SARC)?

Answer 17: Casinos and card clubs should note the type of information contained on a FinCEN Form 102 (SARC) that law enforcement has advised is the most valuable to them, and which, if missing, limits the effectiveness for law enforcement use.

• Provide complete subject identifying information, such as name, permanent address, government-issued identification number, date of birth, and casino account number.
• Identify the characterization of suspicious activity by checking Item 26 on the form and refrain from checking the 'other' box unless the activity is not covered by the existing list of suspicious activities.
• Prepare a concise and clear narrative that provides a complete description of the suspicious activity. The following are several things to consider when a casino or card club reviews a SARC's narrative (i.e., Part VI) to ensure it is concise and clear:
  • - Provides a detailed description of the suspicious activity.
  • - Narrative should not state, 'see attached.'
  • - Identifies 'who,' 'what,' 'when,' 'why,' 'where,' and 'how.'
  • - Identifies whether the transaction was attempted or completed.
  • - Is chronological and complete.
  • - Identifies the dates of any previously filed Form 102 on the same subject.
  • - Notes any actions (taken or planned) by the casino, including any internal investigative numbers used by the casino to maintain records of the suspicious activity.
• Include contact information for persons at the casino with additional information about the suspicious activity.

For additional guidance on providing a clear and complete description of the suspicious activity, see FinCEN's Suspicious Activity Reporting Guidance for Casinos.

Question 18: Should a casino or card club document the basis for its determination that a transaction is not suspicious?

Answer 18: If a casino determines that an activity is suspicious, it must file FinCEN Form 102 (SARC). However, based on the available facts and after an initial investigation, a casino may determine that certain unusual activity is not suspicious. Although 31 C.F.R. § 103.21 does not specifically state that a casino or a card club must document the reasons why it has not filed FinCEN Form 102 for a particular activity that was reviewed as potentially suspicious, it is an effective practice for a casino or card club to document the basis for its determination that the transaction is not, after all, suspicious.⁵⁹

Thorough documentation provides a record of the decision-making process (including the final decisions not to file a SARC) which a casino or card club would find helpful to: (i) assist internal or external auditors and examiners in their assessment of the effectiveness of its suspicious activity reporting and monitoring and reporting system, (ii) assist its internal review committee⁶⁰ in making future decisions on what should be reported as suspicious, (iii) train employees about what transactions are suspicious and which are not suspicious based on all the relevant facts and circumstances, (iv) respond to a potential law enforcement subpoena pertaining to a particular customer whose activity was reviewed by the committee, but considered not to be suspicious, and (v) if it has multiple casino properties in the same jurisdiction, ensure that reasonably consistent suspicious activity reporting risk-based analysis procedures are being followed.

Section D: 31 C.F.R. § 103.36 Casino Recordkeeping Requirements

Question 19: What specific recordkeeping requirements apply to a casino?

Answer 19: 31 C.F.R. § 103.36 requires a casino or card club to maintain and to retain the following source records (either the originals or microfilm version, or other copies or reproductions of the documents) that relate to its operation:

• Records of each deposit of funds, account opened or line of credit extended, including a customer's identification and the verification of that identification as well as similar information for other persons having a financial interest in the account, regardless of residency;
• Records of each receipt showing transactions for or through each customer's deposit or credit account, including a customer's identification and the verification of that identification, regardless of residency;
• Records of each bookkeeping entry comprising a debit or credit to a deposit account or credit account;
• Statements, ledger cards or other records of each deposit or credit account, showing each transaction in or with respect to the deposit or credit account;
• Records of each extension of credit in excess of $2,500, including a customer's identification and the verification of that identification, regardless of residency;
• Records of each advice, request or instruction with respect to a transaction of any monetary value involving persons, accounts or places outside the United States, including customer identification, regardless of residency;
• Records prepared or received in the ordinary course of business that would be needed to reconstruct a customer's deposit or credit account;
• Records required by other governmental agencies, e.g., federal, state, local or tribal;
• A list of transactions involving various types of instruments, cashed or disbursed, in face amounts of $3,000 or more, regardless of whether currency is involved, including customer's name and address; and
• A copy of the compliance program required by 31 C.F.R. § 103.64.

Also, card clubs are required to maintain and to retain records of all currency transactions by customers, including, without limitation, records in the form of currency transaction logs and multiple currency transaction logs.

Besides the above casino-specific requirements, there are other BSA recordkeeping requirements that apply to all financial institutions, including casinos and card clubs, such as:

• Records by persons having financial interests in foreign financial accounts;⁶¹
• Records of transmittals of funds in excess of $3,000 requiring the verification of identity, and the recording, retrievability and reporting of information to other financial institutions in the payment chain, regardless of the method of payment;⁶² and
• Nature of records, record access, and five-year retention period for records.⁶³

Question 20: What computer records must a casino retain?

Answer 20: A casino or card club that inputs, stores, or retains, in whole or in part, for any period of time, any record required to be maintained by 31 C.F.R. §§ 103.33 or 103.36(a) and (b) on computer disk, tape, or other machine-readable media shall retain the records in such media. Also, a casino or card club is required to maintain the indexes, books, file descriptions and programs that would enable a person readily to access and review these computer records. These computerized records, source documentation and related programs must be retained for a period of five years. However, the BSA does not require that computerized records be stored in on-line memory in a computer past their normal business use.⁶⁴ Nonetheless, records must in all events be filed or stored in such a way as to be accessible within a reasonable period of time,⁶⁵ taking into consideration the nature of the records and the length of time since the record was made.

A casino may not delete or destroy specific computerized customer gaming activity information (prior to the end of the five-year retention period), such as player rating records,⁶⁶ and instead only retain the more limited trip history records (which only summarize the total funds from a customer's multi-day trip and the most recent trips, usually between three and nine trips). Because a trip includes any number of continuous days of gaming activity in which there is not a break in play, the player trip history is only a limited summarized record that typically does not provide all of the information contained on the original rating card, such as the specific amounts of the customer's currency transactions conducted for each gaming day.

Further, the retention of computerized records does not relieve a casino from the obligation to retain any record required to be maintained by 31 C.F.R. §§ 103.33 or 103.36(a) and (b), which typically are the source documents (either the originals or microfilm version, or other copies or reproductions of the documents) of customers' transactions.

Section E: 31 C.F.R. § 103.64(a) Compliance Program Requirements⁶⁷

Question 21: How comprehensive must an internal and/or external testing program be to assure and monitor compliance with the BSA?

Answer 21: A casino or card club must conduct internal and/or external testing for compliance with a scope and frequency commensurate with the risks of money laundering and terrorist financing it faces, as well as the products and services it provides, to determine if a casino's procedures are comprehensive enough to detect suspicious activity.⁶⁸

The primary objectives of the independent testing of the BSA compliance program are to determine whether: (i) the program is properly designed and operating effectively to comply with suspicious and currency transaction reporting, identification, recordkeeping, and record retention requirements; (ii) there are material weaknesses (e.g., inadequate training) and internal control deficiencies; (iii) testing of the program is based on risk assessment criteria designed to focus on money laundering and terrorist financing as well as the products and services provided; and (iv) there is adherence to BSA policy, procedures, and systems.

FinCEN is aware that some casinos conduct internal testing for BSA compliance on a regular basis as part of their annual internal audit plan. The testing provides an assessment of the level of BSA compliance. The internal audit report typically includes the scope, objectives, and findings of the audit as well as a response to any audit finding indicating the corrective action to be taken, the target date for completion, and the department head responsible for the corrective action. Other casinos and card clubs may hire independent certified public accountants for similar purposes.

A casino or card club needs to take corrective actions once becoming aware of weakness and deficiencies in its anti-money laundering compliance program, or any element thereof, that could or did result in failures to comply with BSA identification, reporting, recordkeeping, record retention as well as compliance program requirements. Violations of these regulatory requirements may result in both criminal and civil penalties.

Question 22: What type of compliance training program should be developed and what types of documentation should be maintained by a casino or card club to ensure that it has an adequate, accurate, and complete program?

Answer 22: One of the more important elements of the anti-money laundering compliance program is the obligation to institute an effective and ongoing training program for all appropriate casino or card club personnel. Such a compliance training program should be commensurate with the risks posed by the products and financial services provided. Training should be provided to all personnel before conducting financial transactions on behalf of a casino at the cage (including casino credit and slot booth), on the floor (including table games, keno, poker, other floor games, and slot machines/video lottery terminals), as well as those responsible for complying with BSA currency transaction and suspicious transaction reporting, identification, recordkeeping, and other compliance program requirements. Also, a casino or card club is required to maintain, and to retain, a copy of the compliance program documentation. This documentation should include all casino records, documents, and manuals substantiating the training program as well as the training of appropriate personnel.⁶⁹ The requirement is flexible and allows each compliance training program to depend on the characteristics of an individual casino. For example, a large casino having many table games, slot machines/video lottery terminals, and cage windows might need a more comprehensive training program than a small casino with no table games. A compliance procedures manual for employees should cover all applicable divisions or departments (e.g., table games, slot operations, keno, poker), other operational departments (e.g., cage operations, casino credit, slot booth), as well as other departmental functions (e.g., accounting, finance, information technology, marketing, surveillance).

Also, recordkeeping procedures should reflect the types of financial services provided. In addition, the training program should ensure that casino front-line employees, such as cage personnel (e.g., shift managers), cage cashiers, front window cashiers (i.e., general cashiers), pit personnel (e.g., pit bosses), floor persons (i.e., raters), dealers, and slot personnel (e.g., slot supervisors, slot attendants, slot cashiers, change persons) have appropriate training to detect the occurrence of unusual or suspicious casino transactions.

Question 23: What does the requirement mean that casinos that have automated data processing systems must use their automated programs to aid in assuring compliance?

Answer 23: Casinos are required to 'develop and implement' written programs that are reasonably designed to assure BSA compliance with all applicable requirements.⁷⁰ Effective casino anti-money laundering compliance procedures should include identifying and using appropriate automated systems and programs⁷¹ for all applicable gambling operating divisions or departments (e.g., table games, slots, keno, poker), other operational departments (e.g., cage, slot booth), as well as other departmental functions (e.g., accounting, surveillance) to comply with suspicious activity and currency transaction reporting, as well as to maintain relevant records⁷² for casino accountholders.⁷³

Questions or comments regarding the contents of this Guidance should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.

¹See 31 C.F.R. Part 103.

²See 31 U.S.C. § 5312(a)(2)(X) and 31 C.F.R. § 103.11(n)(5)(i) and (n)(6)(i).

³This includes casinos located in Commonwealth of Puerto Rico, St. Croix (U.S. Virgin Islands), and Tinian (Northern Mariana Islands). See 31 C.F.R. § 103.11(tt).

⁴The Indian Gaming Regulatory Act is codified at 25 U.S.C. § 2701 et seq.

⁵Slot machines, video lottery terminals, and house-banked table games would qualify as Class III gaming under the Indian Gaming Regulatory Act. Bingo and related games, including pull tabs, lotto, punch boards, tip jars, instant bingo and some card games, would qualify as Class II gaming under the Indian Gaming Regulatory Act.

⁶See 61 F.R. 7054 - 7056 (February 23, 1996).

⁷Id.

⁸A similar conclusion would apply to 'racinos' operating in tribal jurisdictions. Slot machines, table games, and similar forms of gaming would qualify as either Class II or Class III gaming under the Indian Gaming Regulatory Act.

⁹The Nevada Gaming Commission issues 'nonrestricted' gaming licenses to operators or owners of Nevada race book or sports pools. See Nevada Gaming Commission Regulation 22.020. A Nevada race book 'means the business of accepting wagers upon the outcome of any event held at a track which uses the pari-mutuel system of wagering.' See Nevada Revised Statute § 463.01855. A Nevada race book is a business that accepts wagers at fixed odds (or track odds) based on the outcome of the race that may be televised and displayed in Nevada casinos (i.e., 'simulcasting'). A Nevada sports pool 'means the business of accepting wagers on sporting events by any system or method of wagering.' See Nevada Revised Statute § 463.0193. A Nevada sports pool is a business that accepts wagers at fixed odds based on the outcome of certain professional and amateur athletic sporting events that may be televised and displayed in Nevada casinos.

¹⁰A Nevada 'nonrestricted license' includes, among other things, '. . . A license for, or operation of, any number of slot machines together with any other game, gaming device, race book or sports pool at one gaming establishment.' See Nevada Revised Statute § 463.0177(2). In addition, Nevada Revised Statute § 463.245(3) provides an exception to the prohibition against having more than one licensee issued to each casino. Also, see Nevada Gaming Commission Regulation 22.010(4).

¹¹See 61 F.R. 7054 - 7056 (February 23, 1996).

¹²We have already addressed a situation in which an establishment operating in a tribal jurisdiction offers off-track betting on horse races and other Class III gaming. See In the Matter of the Tonkawa Tribe of Oklahoma and Edward E. Street - FinCEN No. 2006-1 (March 24, 2006).

¹³This discussion addresses off-track betting in Nevada and tribal jurisdictions only. Off-track betting may not require a gaming license in other jurisdictions. The definition of 'casino' includes only those establishments licensed or authorized to conduct business as casinos.

¹⁴See 61 F.R. 7054 - 7056 (February 23, 1996).

¹⁵A greyhound racing club is a gaming establishment that offers the sport of racing greyhounds. Specially trained dogs chase a lure (which is an artificial hare or rabbit) around an oval track until they arrive at the finish line. The dog that arrives first in each event is the winner of the bet.

¹⁶See 31 U.S.C. § 5312(a)(2)(X) and 31 C.F.R. § 103.11(n)(6)(i). The class of gaming establishments known as 'card clubs' became subject to the BSA as of August 1, 1998. See 63 F.R. 1919 - 1924 (Jan. 13, 1998).

¹⁷See 61 F.R. 7054 --7056 (February 23, 1996).

¹⁸See 31 C.F.R. § 103.22(b)(2) and (c)(3).

¹⁹See 31 C.F.R. § 103.64(a)(2)(v)(A).

²⁰However, FinCEN does recognize that for certain aggregate currency transactions, a casino may not be able to obtain the required customer identification information because either the customer has left the casino and is no longer available or a casino does not have internal records which provide all of the required customer identification information.

²¹See 31 C.F.R. § 103.64(a)(2)(vi).

²²See 31 C.F.R. §§ 103.22(b)(2) and (c)(3), 103.27(a) and (d), and 103.28. Also, see FinCEN Form 103, Specific Instructions, Item 1, for filing an amended report.

²³Coin-in is a metered count of coins, credits and other amounts bet by customers at an electronic gaming device. Coin-out is a metered count of coins, credits and other amounts paid out to customers on winnings at an electronic gaming device. Therefore, coin-in does not include paper currency inserted into a bill acceptor (on slot machine or video lottery terminal) to accumulate credits.

²⁴See 31 C.F.R. §§ 103.22(b)(2)(i)(I), (b)(2)(iii)(C), and (c)(3), and 103.64(b)(3) and (4).

²⁵See 31 C.F.R. §§ 103.21 and 103.64(a)(2)(v)(B).

²⁶See 31 C.F.R. § 103.64(a)(2)(vi).

²⁷Furthermore, as discussed in FinCEN Ruling 2005-1, measures that a casino could implement in response to a risk-based suspicious activity analysis could include enhancements to the operating system for slot machines. The enhancements could consist of new software tools/interfaces and reprogramming. A casino could develop the enhancements or have a vendor develop the enhancements.

²⁸See 31 U.S.C. § 5321(a)(1) and 31 C.F.R. § 103.57(f).

²⁹See 31 C.F.R. § 103.22(b)(2)(i)(E).

³⁰See FinCEN Administrative Ruling FIN-2006-R002, A Cash Wager on Table Game Play Represents a 'Bet of Currency' (March 24, 2006).

³¹Nonetheless, when a customer increases a subsequent cash bet (i.e., money play) at the same table without departing, the increase in the amount of the currency bet would represent a new bet of currency and a transaction in currency being monitored by a casino.

³²See 31 C.F.R. § 103.22(b)(2)(iii)(B) and 72 F.R. 35008 (June 26, 2007).

³³See 31 C.F.R. § 103.36(b)(11).

³⁴The card clubs operate or run the games and earn their revenue by receiving a fee from, rather than 'banking,' the games as casinos do. See 63 F.R. 1919 - 1924 (January 13, 1998). 31 C.F.R. § 103.116(n)(6)(i) defines a card club as a card club, gaming club, card room, gaming room, or similar gaming establishment.

³⁵See 31 C.F.R. §§ 103.22(b)(2) and (c)(3), 103.28, and 103.64(a)(2)(i) and (b)(3) - (4).

³⁶See 31 C.F.R. § 103.64(a)(2)(v)(A).

³⁷A propositional player is a natural person employed by a casino or card club to play a permissible game with his or her personal funds. A propositional player is paid a fixed sum by a casino or card club for playing in a poker/card game and retains any winnings and absorbs any losses. Also, a propositional player's function is to start and gamble at a poker/card game, to keep a sufficient number of players in a game, or to keep the action going in a game. Some card rooms have entered into contractual agreements with so-called 'third party provider[s] of propositional player services' to exclusively bank poker/card games as independent contractors, which introduces issues with assuring day-to-day BSA compliance with maintaining currency and cash equivalent records. An individual employed by such a service is called a 'third party propositional player' who gambles with funds provided by such a service.

³⁸See 31 C.F.R. § 103.38(b).

³⁹See 72 F.R. 35008 (June 26, 2007).

⁴⁰See 31 C.F.R. § 103.64(a)(2)(i).

⁴¹Typically, these records contain the original method of identification (including type, number and expiration date, of the customer's identification credential originally examined) and the date of such examination as well as a photocopy or other reproduction (e.g., a computerized representation) of the identification credential. Some casinos maintain hard copy internal records and others digitized records containing identification information on a known customer.

⁴²See 31 C.F.R. §§ 103.64(a) and 103.120(d).

⁴³Types of casino accounts that would be subject to suspicious activity reporting include deposit (i.e., safekeeping, front money or wagering), credit, check cashing, player rating or tracking, and slot club accounts.

⁴⁴See 31 C.F.R. § 103.64(a)(2)(vi).

⁴⁵See 31 C.F.R. § 103.64(a)(2)(v)(B).

⁴⁶See 31 C.F.R. § 103.64(a)(2)(iii).

⁴⁷See 31 C.F.R. § 103.64(a)(2)(v)(B).

⁴⁸See 31 C.F.R. §§ 103.22(b)(2)(ii)(A) and (c)(3), and 103.64(b)(4).

⁴⁹Almost all casinos maintain multiple transaction logs ('MTLs') pursuant to state, tribal or local laws, or as unique business records. Casinos or card clubs record on these logs only currency transactions above a given threshold, usually $2,500 - $3,000. Also, some casinos have enhanced the existing MTL compliance procedure to require a surveillance photograph of each 'unknown' customer to assist in identifying customers for purposes of aggregating transactions for currency transaction reporting as well as potential suspicious transaction reporting.

⁵⁰See 31 C.F.R. § 103.64(a)(2)(i).

⁵¹Casinos and card clubs maintain cages where cashiers conduct financial transactions using a drawer that operates on an imprest basis or inventory. An imprest basis is a method of accounting for funds inventories whereby any replenishment or removal of funds is accounted for by an exchange of an exact amount of other funds in the inventory. The imprest drawer opens with a stated amount of currency and/or chips. Any subsequent additions or removal of funds in the drawer are accounted for by either a document or an exchange of an equal amount of funds of another form. Since chips and currency are fungible items no imprest records of these transactions are prepared or maintained.

⁵²For example, a known customer with a casino deposit (i.e., safekeeping, front money or wagering), credit, check cashing, player rating/player tracking, or slot club account.

⁵³See 31 C.F.R. §§ 103.21 and 103.64(a)(2)(v)(B).

⁵⁴A betting ticket is a written record of a wager for a race or sporting event. It is printed with a unique ticket number and is used to record the event for which the wager was placed. It includes the name of the gambling establishment, race or sport event (e.g., race track, race number, horse identification), the amount of the wager, line or spread, and date and time. The gambling establishment provides a copy of the betting ticket to a customer and maintains a record of it.

⁵⁵A token is a gaming instrument or coin issued by a casino at certain stated denominations as a substitute for currency and used to play certain slot machines or video lottery terminals. Tokens are most often used for denominations of $1.00 or greater. Tokens represent a monetary value only within the casino and are intended for the purposes of gambling.

⁵⁶Slot machines or video lottery terminals that print tickets are commonly known as 'ticket in/ticket out' or 'TITO' machines. A TITO ticket is a gaming instrument issued by a slot machine or video lottery terminal to a customer as a record of the wagering transaction and/or substitute for currency. Tickets are voucher slips printed with the name and the address of the gaming establishment, the stated monetary value of the ticket, date and time, machine number (i.e., asset or location), an 18-digit validation number, and a unique bar code. Tickets are a casino bearer 'IOU' instrument. A customer can use a ticket at a machine or terminal that accepts tickets, or cash a ticket at a cage, slot booth, a redemption kiosk, or a pari-mutuel window at the gaming establishment.

⁵⁷31 C.F.R. § 103.38(b) states that 'records required by this subpart to be retained by financial institutions may be those made in the ordinary course of business by a financial institution. If no record is made in the ordinary course of business of any transaction with respect to which records are required to be retained by this subpart, then such a record shall be prepared in writing by the financial institution.'

⁵⁸See 31 C.F.R. § 103.38(d).

⁵⁹See FinCEN's Suspicious Activity Reporting Guidance for Casinos, December 2003, page 4.

⁶⁰ Many casinos have an internal SARC review committee.

⁶¹See 31 C.F.R. § 103.32.

⁶²See 31 C.F.R. § 103.33(f) and (g).

⁶³See 31 C.F.R. § 103.38.

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⁶⁴For example, for casinos that maintain computerized records, such as daily player rating records, markers issued records, and cage voucher records for each customer deposit, deposit withdrawal and marker redemption, they may store such information on-line in computer memory or in off-line storage media, such as magnetic tape, magnetic disk, magnetic diskette, CD-ROM disk, etc.

⁶⁵See 31 C.F.R. § 103.38(d).

⁶⁶See 31 C.F.R. §§ 103.36(b)(8) and 103.36(c), and F.R. 1165 - 1167 (January 12, 1989).

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⁶⁷See 31 C.F.R. §§ 103.64 and 103.120(d).

⁶⁸See 31 C.F.R. § 103.21.

⁶⁹Such training program documentation would include any course outlines, the dates that training was provided, names of personnel who received training, any test that was administered, and the test results to allow internal and/or external examiners to evaluate the effectiveness of each training session.

⁷⁰See 31 C.F.R. § 103.64(a)(1).

⁷¹This would include gaming computer systems or other computer systems that interface with systems that track, control, or monitor customer gaming activity (e.g., a casino management system, a casino marketing system, a customer master file system, a credit management system).

⁷²See e.g., 31 C.F.R. §§ 103.21, 103.22(b)(2) and (c)(3), 103.33(f) and (g), and 103.36.

⁷³Many companies have developed casino management system software capable of identifying and aggregating customer transactions that are associated with casino accounts such as deposit (i.e., safekeeping, front money, or wagering), credit, check cashing, player rating or tracking, or slot club.