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Financial Services Law Insights and Observations

FinCEN director discusses gaming industry AML compliance

Financial Crimes FinCEN Anti-Money Laundering Bank Secrecy Act Sports Betting Virtual Currency Fintech SARs

Financial Crimes

On August 13, Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco delivered remarks at the 12th Annual Las Vegas Anti-Money Laundering Conference stressing the need for compliance within the gaming industry, particularly as new technologies emerge such as mobile gaming and the use of convertible virtual currencies (CVC) increases. With the U.S. Supreme Court issuing a decision in May holding that states can legalize sports gambling (previously covered by InfoBytes here), Blanco stated that casinos need to consider ways to integrate their sports betting programs—including mobile sports betting apps—into their existing anti-money laundering programs. These measures must include establishing and implementing procedures for detecting and reporting suspicious activities, Blanco noted, reminding the audience of FinCEN’s FAQs designed to assist financial institutions when reporting cyber indicators and cyber-enabled financial crime.

Blanco also discussed FinCEN’s work with respect to cybersecurity and virtual payments, noting, among other things, that both online and physical casinos that accept CVC need to consider how they review transactions to determine the source of the currency and recognize indicators of suspicious activity. Blanco referred casinos to consolidated guidance issued by FinCEN in May (previously covered by InfoBytes here), and expressed a concern that “CVC-related SAR filings by casinos have not been as robust as expected since the May CVC guidance and advisory were published.” He further stressed the importance of information-sharing between casinos, and highlighted that sharing SARs can contribute to the identification of suspicious transactions as well as Bank Secrecy Act compliance responsibilities.

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