Bank Secrecy Act (BSA)
The BSA is the nation's first and most comprehensive Federal anti-money laundering and counter-terrorism financing (AML/CTF) statute. In brief, the BSA authorizes the Secretary of the Treasury to issue regulations requiring banks and other financial institutions to take a number of precautions against financial crime, including the establishment of AML programs and the filing of reports that have been determined to have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings, and certain intelligence and counter-terrorism matters. The Secretary of the Treasury has delegated to the Director of FinCEN the authority to implement, administer, and enforce compliance with the BSA and associated regulations. FinCEN exercises regulatory functions primarily under the Currency and Financial Transactions Reporting Act of 1970, as amended by Title III of the USA PATRIOT Act of 2001 and other legislation, which legislative framework is commonly referred to as the "Bank Secrecy Act" (BSA). FinCEN maintains a comprehensive website including statutes and regulations, forms, BSA E-Filing, and specific information for various financial institutions including casinos. Additional information is available on the FinCEN website for the casino topics summarized below.
Casino Definition as Financial Institution
Casinos and card clubs licensed to do business as casinos or card clubs and which have gross annual gaming revenues (GAGR) in excess of $1,000,000 are financial institutions subject to the requirements of the Bank Secrecy Act, known as Title 31.
Casinos and card clubs on Indian lands with GAGR in excess of $1,000,000 are defined as financial institutions under 31 CFR 1010.100(t)(5) and 31 CFR 1010.100(t)(6).
Casinos and card clubs which have revenues of $1,000,000 or less are instead subject to the requirements of IRC Section 6050I (Title 26). Also see 31 CFR 1010.330.
Pursuant to a special agreement with the Treasury, casinos in Nevada with GAGR in excess of $10,000,000 are subject to Nevada State Regulation 6A.
Nevada casinos with GAGR of $10,000,000 or less are subject to the requirements of IRC Section 6050I (Title 26). Also see 31 CFR 1010.330.
Each casino must develop and implement a written anti-money laundering (AML) program. 31 CFR 1010.210 requires that each casino that is subject to the Bank Secrecy Act must have an effective anti-money laundering program. Each casino must produce its own program, based on an analysis of the risks presented by the casino’s products and services. An effective AML program is designed to prevent the casino from being used to facilitate money laundering and terrorist financing, and must be based on an assessment of the possible risks of those things happening. Each casino should have its own, risk-based, compliance program and compliance officer if they have different potential risks because of different circumstances, such as different types of games and patrons. Other factors such as the distance between casinos and the use of separate record keeping systems may increase the need to have a separate compliance officer for each location. An assessment of risk should be made for each product or service offered by the casino. The casino’s size, location, dollar volume, types of games, type/nature of customers, and internal controls are some of the factors to consider when analyzing the possible risk of money laundering occurring at the casino. Several things must be included in the program:
- Internal controls (policies and procedures designed to assure compliance with the Bank Secrecy Act (BSA));
- Training of the casino employees;
- Independent testing for compliance ;
- A compliance officer, who is responsible for day-to-day compliance with the BSA and the casino’s AML program;
- Procedures for using all available information to determine, when required, the name, address and Social Security Number (SSN), and to verify the identity of, a person;
- Procedures for using all available information to determine any transactions or patterns of transactions required to be reported as suspicious; and
- Procedures for using computers to aid in assuring compliance, if the casino has computerized systems
Reporting requirements – Mandatory use of FinCEN BSA E-Filing System
Currency Transaction Report (CTR), must be filed by casinos to report each transaction in currency involving cash-in and cash-out of more than $10,000 in a gaming day (31 CFR 1021.311).
A. Transactions in currency involving cash-in include, but are not limited to (31 CFR 1021.311(a)):
- Purchase of chips, tokens, and plaques
- Front money deposits
- Safekeeping deposits
- Payments on any form of credit, including markers and counter checks
- Bets of currency
- Currency received by a casino for transmittal of funds through wire transfer for customer
- Purchases of a casino’s check
- Exchanges of currency for currency, including foreign currency
B. Transactions in currency involving cash-out include, but are not limited to (31 CFR 1021.311(b)):
- Redemption of chips, tokens and plaques
- Front money withdrawals
- Safekeeping withdrawals
- Advances on any form of credit, including markers and counter checks
- Payments on bets, excluding slot and video lottery terminal jackpots
- Payments by a casino to a customer based on receipts of funds through wire transfer for credit to a customer
- Cashing of checks or other negotiable instruments
- Exchanges of currency for currency, including foreign currency
- Reimbursements for customers’ travel and entertainment expenses by the casino
C. Multiple currency transactions shall be treated as a single transaction if the casino has knowledge that they are by, or on behalf of, any person and result in either cash in or cash-out totaling more than $10,000 during any gaming day (31 CFR 1021.313).
D. Cash-in and cash-out are to be aggregated separately.
E. A CTR must be electronically filed within 15 calendar days following the day the reportable transaction occurs (31 CFR 1010.306(a)(1)).
The casino must retain copies of all filed Currency Transaction Report (CTR’s) for five years from the date of the report. For additional records to be made and retained by casinos, refer to 31 CFR 1010.306(a)(2).
Pursuant to special agreement with the Department of Treasury, Nevada casinos are subject to Nevada Gaming Commission Regulation 6A.
Suspicious Activity Report (SAR), must be filed for any suspicious transaction that may be relevant to the possible violation of any law or regulation and involves or aggregates at least $5,000 in funds or other assets.
Disclosure of FinCEN CTR and SAR
The law provides CTR and SAR are exempt from disclosure by Treasury, even under the Freedom of Information Act. There is not a prohibition against disclosure by the filer of the CTR to the subject of the report if the filer desires to disclose. There is a prohibition on disclosure by casinos of SAR, Suspicious Activity Report, refer to 31 CFR 1010.320(e)(1).