Casinos in the United States which generate more than $1,000,000 in annual gaming revenues are required to report certain currency transactions to assist the Financial Crimes Enforcement Network (FinCEN) of the Internal Revenue Service (IRS) in uncovering money laundering activities and other financial crimes (including terrorist financing).
Casinos in the United States which generate more than $1,000,000 in annual gaming revenues are required to report certain currency transactions to assist the Financial Crimes Enforcement Network of the Internal Revenue Service in uncovering money laundering activities and other financial crimes. Although Title 31, also known as the Bank Secrecy Act, was originally focused on financial institutions, criminal use of banking services located within casinos created a need for additional regulations. Let’s take a close how at the law and order system that governs the online casino industry in both countries. Casino Laws in the US. Gambling laws are somewhat complicated in the US. There are federal laws, state laws, as well as local laws, all of which are considered when online casinos are launched in the country. Online casinos in the US New Jersey online casino. New Jersey currently stands tall as the leader in the online gambling USA space. New Jersey passed its online gambling law in 2013. This allowed Atlantic City casinos to apply for internet gaming permits and host a variety of online poker and online casino sites under those licenses.
Although Title 31, also known as the Bank Secrecy Act, was originally focused on financial institutions, criminal use of banking services located within casinos created a need for additional regulations that were specific to casinos. Because large sums of currency are transacted through slot machines, gaming tables, automatic change machines, retail operations and the cage (banks), and with high frequency, the regulations were targeted at transactions in excess of $10,000. Casino regulation has been a topic of debate, prompting the United States Senate to have a hearing before the United States Congress in which Title 31 topics were discussed through testimony by industry experts such as Grant Eve, CPA and partner at Joseph Eve, Certified Public Accountants and Ernest Stevens Jr., Chairman of the National Indian Gaming Association.[1]
- 2Suspicious activity
Transaction reporting[edit]
Currency transactions that occur within a single Gaming Day (the normal 24-hour period that any casino uses for accounting and business reporting), whether the currency is paid into the casino, paid out, or exchanged (in the case of foreign currency exchanges), in excess of $10,000 requires the completion of a Currency Transaction Report (CTR, FinCEN Form 112) and must contain enough information to accurately identify the individual(s) transacting the currency.
For example, if a man walks into a casino and stops at the blackjack tables and buys into the game for $12,000 (using cash), a CTR must be completed by the casino and filed with the IRS. In this example, currency is paid into the casino in the form of cash and happened within the unique 24-hour Gaming Day of the casino.
Here is an example of a cash out transaction: the established Gaming Day of a certain casino begins at 1:00am and ends at 12:59am. At 6:30am, a woman takes $6,400 in slot machine tickets to the main cage of the casino and requests payment in all $20 bills. Later that day, at around 7:10pm, the same woman approaches another cash cage on the opposite side of the casino and exchanges $4,000 in blackjack chips for cash. Because $10,400 was paid out in cash to a single individual in a single Gaming Day, a CTR must be filed by the casino to report the Cash Out transaction, because it is above the $10,000 threshold.
Because multiple transactions are aggregated for the purpose of Title 31 reporting, casinos create tracking programs to identify large transactions and automatically aggregate them in real time to ensure that they are compliant with the regulations.
Suspicious activity[edit]
Many criminals, such as those interested in tax evasion and money laundering, have researched the Title 31 requirements and have created a number of strategies to avoid detection of their activities by circumventing the reporting requirements. When these activities are discovered, casino staff are required to file a Suspicious Activity Report (SAR, FinCEN Form 114) to report the suspicious activities. Because there are many types of suspicious activities, it is required that casino personnel receive Title 31 training to avoid penalty and remain compliant.
Two of the most popular strategies for circumventing CTR reporting are structuring and minimal gaming.
Structuring[edit]
Because the $10,000 per gaming day CTR threshold is part of the Bank Secrecy Act, a criminal may seek to evade being recorded on a CTR by breaking a transaction over $10,000 into multiple smaller transactions, which is known as structuring. Single and multiple currency transactions in excess of $10,000 (in a single Gaming Day) are reported to the IRS. To track multiple transactions, many casinos record transactions as low as $3,000 (and lower) to ensure that they remain compliant with the CTR requirements. Again, criminals (including those interested in tax evasion) may break up their transactions into several, smaller transactions to avoid detection.
For example, conducting three transactions of $4,000 is more than $10,000, which is the threshold of reporting a CTR. If the casinos did not track multiple transactions, the individual might be able to circumvent the reporting of their transactions. However, because most casinos track transactions of $4,000 (and lower), structuring this $12,000 transaction into three, smaller transactions would not prevent a CTR from being filed. And, while it may be possible to break up $12,000 into 20 individual transactions of $600 each, casino personnel also maintains awareness of this tactic and would likely detect the numerous trips to the cage to perform similar transactions.
Minimal gaming[edit]
Another type of suspicious activity is related to money laundering, where a casino patron may put large amounts of money in play, but gambles very little before cashing out.
For example, a bank robber steals $50,000 from a large bank. Most banks mark cash with exploding dye or sequential numbering of the large bills. To avoid being apprehended, the bank robber needs to exchange the stolen money for money that cannot be traced back to the robbery. In this situation, a bank robber may put $1,000 in $20 bills into a slot machine and spin twice before cashing out. Whether the slot machine pays the bank robber in coins or a slot ticket is irrelevant because the traceable money is in the machine and the bank robber will effectively receive 'clean' or 'laundered' money.
Both of these situations are suspicious, as defined by Title 31 regulations, and require a completed SAR by the casino, within a specified period of time.
Involvement of Agents[edit]
Two or more individuals handling the same currency bankroll are commonly referred to as 'agents' by the casino. An example of this would be individuals purchasing chips and dividing them amongst themselves. Agents cashing out chips or making currency transactions on behalf of one another are also popular examples of agent activity. Since agents handle the same bankroll, they essentially become entities and their transactions must be recorded together. All parties involved in agent activity must submit proper identification and complete the required IRS forms when their COMBINED transactions reach over $10,000 in a gaming day. While agent activity can sometimes occur with legitimate transactions (e.g. a husband cashing out his wife's slot vouchers so she can continue to play), agent activity is highly suspicious because it allows individuals to structure their transactions below the $10,000 to avoid being documented to the IRS.
Involvement of casino staff[edit]
It is illegal for an employee of the casino to assist a casino patron in circumventing the reporting requirements of Title 31. Such circumvention can include notifying patrons that they are nearing reporting thresholds, disclosing the time that the Gaming Day ends, and neglecting to report suspicious activity. A casino employee that has been found to have circumvented Title 31 can be assessed civil and criminal fines, in addition to incarceration.
References[edit]
- ^United States Senate Committee on Indian Affairs (November 17, 2011). 'The Future of Internet Gaming: What's at stake for tribes?'. One Hundred Twelfth Congress First Session.
Find detailed information on US casinos in every state - both land-based and online. Our experts have compiled information regarding states who legalized online casinos and details about all legal USA online casinos. We have provided knowledge on gambling specifics for each state and what types of casinos are legal in each particular state. On American Casino Guide, you will find detailed lists of every US casino resort, riverboat casino and Indian casino in the country. Just choose a state from the below list of US casinos-by-state in order to bring up detailed information on what types of casinos are available in the respective state, a list of all casinos within the state borders, and slot machine payback statistics for all US casinos.
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Online gambling guide
The states who have now moved forward with legal online gambling are as follows:
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- Nevada
- Delaware
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Legal Online Sportsbooks:
- Rhode Island
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USA online casinos
The online casino USA market is definitely starting to grow. The domino effect is taking place, now that states are seeing the financial benefits of legal online casinos. The laws surrounding USA online casinos are specific to the state where they are licensed. Ultimately it is up to the state to decide whether or not to legalize online casinos. We have seen the biggest impact of legalizing online casinos in the state of New Jersey thus far.
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Legal online casino gambling was recently just passed through legislation in Pennsylvania, meaning online casinos are on their way in the Keystone State. The projected list of online casinos in Pennsylvania are as follows:
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The only other state in America with legal online casino gambling is in fact, Delaware, and just like the state’s size, the list is quite small. The legal online casinos in Delaware are as follows:
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- Dover Downs
- Harrington Online
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American Casino Guide - land-based establishments
There are many different kinds of casinos throughout the United States. Depending on your location in the country, there could be a mix of the following casinos:
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Indian Casinos
Indian casinos, also known as Tribal casinos, are usually located on federally recognized Indian reservations. They range in size from small truck stops and convenience stores to some of the largest casinos in the country. At a small truck stop casino, you would generally find a handful of machines and these would be located in places such as Oklahoma or Wisconsin. Connecticut is home to one of the world’s largest casinos - Foxwoods Casino.
Different states have different legal agreements regarding Indian casinos. Depending on the agreement made, these Indian casinos can offer either Class II gaming or Class III gaming.
Class III (Class 3) gaming is what most people would describe as “normal” casino gaming. This is kind of casino gambling you would find at the majority of casinos in the country, such as Las Vegas. Class III gaming involves the player playing against “the house” like in blackjack, craps, roulette, or any other table game, as well as slot machines.
Class II (Class 2) gaming, on the other hand, is slightly different. These are games where players compete against other players such as in poker and bingo. Over the years, casinos have found ways around this to offer other casino games similar to Class III games, however, adhering still to Class II rules. A great example of this would be Class II slot machines that closely resemble a normal, Class III machine but you will notice a small bingo card in the corner of the screen. So, in essence, you are actually playing a quicker version of virtual bingo against other players in the casino. The reels spin and you can see winning combinations. The reels, however, are “for entertainment purposes only” and your chances of winning are based entirely on the bingo card in the corner.
Another example of Class II games would be player-banked table games where a player would compete against other players rather than against the casino. These look identical to traditional table games. The difference lays in the fact that players have to pay an ante of around $0.50-$1 per hand. In most cases there is someone who supplies the money to be the “bank” and the only money the casino receives is the ante made by each player.
Pari-Mutuel Casinos
Some states such as Arkansas or Delaware only allow casinos in pari-mutuel facilities. Pari-mutuel refers to locations with legalized wagering on horse or dog races; or in Florida, jai-alai games. Since a vast majority of pari-mutuel facilities in the United States are racetracks, these types of casinos are often also known as “racinos,” a combination of the words racetrack and casino.
Besides having legal on-property betting on horse racing, dog racing or jai-alai, these casinos are almost identical to most other land-based casinos. However, depending on the laws of the states where they are located, some may not offer live table games, or may only have slot machines.
A somewhat new development at pari-mutuel facilities in states where traditional casino gambling is illegal is something called “historical racing machines.” These are considered Class II machines similar to the bingo-based machines at many Indian casinos but instead of being based on a bingo card, the results of these games are based on racing results from previous horse races.
Usa Approved Online Casinos
Land-Based Casinos
Land-based casinos refer to the typical casinos that people often think of when they think of a casino. An example of this would a popular casino in Las Vegas or Atlantic City. Casino gambling was legalized in Nevada in 1931 and it was the only state to offer that type of gambling until 1977 when New Jersey legalized casinos for its seaside resort town of Atlantic City. It is these land-based, stand-alone, casinos that were the original forms of casinos until riverboat and Indian casinos came along in the 1990s.
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Riverboat Casino Locations
Riverboat casinos are exactly what they sound like - casinos located inside riverboats. These are found in many states throughout the South and the Midwest such as Illinois, Indiana, Iowa, Missouri, and Mississippi. However, they have evolved over the years as the laws and regulations have been quite relaxed. Originally, they were required to leave the dock and cruise for several hours periodically throughout the day. In the beginning, some states even required the casinos to enact loss limits during these cruises.
Eventually, the loss limits were lifted, as were the requirements for them to cruise periodically, and they began operations constantly docked on the river. Some states later allowed the casinos to be built on floating barges in man-made lagoons fed from the rivers. That is where most of the states are now, however some states such as Mississippi have now allowed their “riverboat” casinos to operate on land. As much as that does not make sense, the rules still require these facilities to be built within a certain distance from the water.