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Vulnerabilities of Casinos and Gaming Sector

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Vulnerabilities of Casinos and Gaming Sector The Asia/Pacific Group on Money Laundering Financial Action Task Force Groupe d’action financière FATF Report Vulnerabilities of Casinos and Gaming Sector March 2009 2 - © 2009 FATF/OECD and APG THE FINANCIAL ACTION TASK FORCE (FATF) The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing. Recommendations issued by the FATF define criminal justice and regulatory measures that should be implemented to counter this problem. These Recommendations also include international co-operation and preventive measures to be taken by financial institutions and others such as casinos, real estate dealers, lawyers and accountants. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. For more information about the FATF, please visit the website: WWW.FATF-GAFI.ORG ASIA PACIFIC GROUP ON MONEY LAUNDERING The Asia/Pacific Group on Money Laundering (APG) is an autonomous and collaborative international organisation founded in 1997 in Bangkok, Thailand consisting of 39 member jurisdictions and a number of international and regional observers. The member jurisdictions and observers of the APG are committed to the effective implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism, in particular the Forty Recommendations and Nine Special Recommendations on Terrorist Financing of the Financial Action Task Force (FATF). For more information about the APG, please visit the website: WWW.APGML.ORG © 2009 FATF/OECD and APG. All rights reserved No reproduction or translation of this publication may be made without prior written permission. Applications for such permission, for all or part of this publication, should be made to the FATF Secretariat, 2 rue André Pascal 75775 Paris Cedex 16, France (fax +33 1 44 30 61 37 or e-mail: [email protected]). Vulnerabilities of Casinos and Gaming Sector – March 2009 TABLE OF CONTENTS EXECUTIVE SUMMARY .............................................................................................................. 7 INTRODUCTION ............................................................................................................................ 9 Scope of Research ............................................................................................................................ 9 Project scope / methodology .......................................................................................................... 11 ............................................................................................................................................. CHAPTER 1: THE CASINO SECTOR ......................................................................................... 13 Introduction .................................................................................................................................... 13 Regional Overviews ....................................................................................................................... 14 Conclusion...................................................................................................................................... 21 ............................................................................................................................................. CASINO SECTOR RISK ASSESSMENTS FOR MONEY LAUNDERING & TERRORIST FINANCING .................................................................................................................................. 22 The need for casino sector-specific risk assessments ..................................................................... 22 Guidance on Typologies Risk Assessments ................................................................................... 22 Sources of information ................................................................................................................... 23 Risks for jurisdictions without a casino sector ............................................................................... 23 Models for casino sector risk assessments ..................................................................................... 23 ............................................................................................................................................. CHAPTER 2: MONEY LAUNDERING METHODOLOGIES AND INDICATORS ................. 25 Broad risks in casinos ..................................................................................................................... 25 Criminal interest in casinos – players and infiltration of casinos ................................................... 26 Money laundering methods and techniques in Casinos ................................................................. 27 Casino value instruments ............................................................................................................... 28 Indicators of ML using casino value instruments .......................................................................... 31 Structuring ...................................................................................................................................... 33 Refining .......................................................................................................................................... 33 Indicators of ML using structuring/refining methods .................................................................... 34 Casino accounts & facilities ........................................................................................................... 36 Indicators of ML using casino accounts: ........................................................................................ 38 4 - © 2009 FATF/OECD and APG Vulnerabilities of Casinos and Gaming Sector – March 2009 Winnings ........................................................................................................................................ 39 Indicators of ML using winnings: .................................................................................................. 40 Currency exchange ......................................................................................................................... 41 Indicators of ML using currency exchange: ................................................................................... 41 Employee complicity ..................................................................................................................... 42 Indicators of employee complicity: ................................................................................................ 42 Credit cards / debit cards ................................................................................................................ 43 Indicators of ML using credit/debit cards: ..................................................................................... 44 False documents ............................................................................................................................. 45 Indicators of ML using false documents and counterfeit currency: ............................................... 45 ............................................................................................................................................. CHAPTER 3 – SECTOR VULNERABILITIES AND EMERGING ISSUES ............................. 47 Introduction .................................................................................................................................... 47 Casino-based Tourism – “Junkets” ................................................................................................ 47 Vulnerabilities ................................................................................................................................ 48 Terrorist Financing ......................................................................................................................... 57 ............................................................................................................................................. CHAPTER 4 - POLICY IMPLICATIONS .................................................................................... 58 Online gaming / online casinos ...................................................................................................... 58 Lack of AML/CFT coverage for casino sectors ............................................................................. 58 Lack of regulatory tools ................................................................................................................. 58 Implementation of CDD measures ................................................................................................. 59 Application of AML/CFT controls to casino foreign branches, offices or subsidiaries ................. 59 Application of AML/CFT controls to casino foreign holding accounts ......................................... 59 Control of junket operators and their agents .................................................................................. 59 Regulatory controls over VIP rooms and related facilities ............................................................ 60 Regulatory coverage of „foreigners only‟ casino models ..............................................................
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