On 10 January 2020 changes to the Government's Money Laundering Regulations came into force. They update the UK's AML regime to incorporate international standards set by the Financial Action Task Force (FATF) and to transpose the EU’s 5th Money Laundering Directive. This page highlights some specific new areas that firms need to comply with.

Money Laundering A Problem In US Casinos — AGA Aims To Solve It Although the United States is one of the countries that have strict regulations in place when it comes to eradicating any possibility of money-laundering activities using casinos, it’s still very much present, as it is anywhere else in the world. § 1021.210 Anti-money laundering program requirements for casinos. (a) Requirements for casinos. A casino shall be deemed to satisfy the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains a compliance program described in paragraph (b) of this section.

(Bloomberg) -- The Singapore casino of billionaire Sheldon Adelson’s Las Vegas Sands Corp. is being probed by the U.S. Department of Justice over whether anti-money laundering regulations were breached in the way it handled the accounts of top gamblers.

The Justice Department in January issued a grand jury subpoena to a former compliance chief of Marina Bay Sands Pte, seeking an interview or documents on “money laundering facilitation” and any abuse of internal financial controls, according to a copy of the subpoena seen by Bloomberg News.

Prosecutors asked the former compliance head, as a person with knowledge of the casino’s operations, to produce records related to any such violations including through gambling junkets and third-party lending using casino credit, the document shows. The U.S. inquiry, which people familiar with the matter said is likely in its early stages, is also seeking to establish if there was any retaliation against whistleblowers, according to the subpoena.

Sands fell as much as 5.3% on Bloomberg’s report before closing up 1.1% in New York. Other operators, including MGM Resorts International and Wynn Resorts Ltd. erased declines and closed higher on a day that the Las Vegas Strip saw its casinos open for the first time since March due to the coronavirus.

Marina Bay Sands is one of the most profitable casinos in the world, accounting for more than a fifth of revenue and about a third of operating income at the U.S. parent. Las Vegas Sands’ Asian operations, which also include Macau, contributed about 85% of the company’s $13.7 billion in revenue last year, and have helped make Adelson one of the richest men in the U.S.

A spokeswoman for the U.S. Attorney’s Office in Las Vegas said she couldn’t confirm or deny ongoing investigations. The subpoena also requested information on another former casino employee, who people familiar said carried out fund transfers to high rollers.

In a written response, the Singapore casino said any suggestion of inappropriate activity is taken seriously, and it has investigated every assertion of wrongdoing brought to its attention. Marina Bay Sands and its parent company haven’t received any requests from the Department of Justice, according to people familiar with the matter.

Other Probes

Las Vegas Sands has drawn other Justice Department scrutiny in recent years. In 2013, the company paid $47.4 million to end a federal investigation into its acknowledged failure to report suspicious deposits by a high-stakes gambler in Las Vegas. In 2017, it paid $6.96 million to resolve a probe into alleged violations of U.S. law in connection with bribes paid to government officials in China and Macau. Sands admitted it knowingly and willingly failed to ensure the legitimacy of about $5.8 million in payments to a business consultant.

Marina Bay Sands also faces a probe in Singapore by the Casino Regulatory Authority into its money transfer policies. A spokesperson for the agency declined to comment further as the investigation is ongoing, adding it hasn’t received a request from the Department of Justice in connection with Marina Bay Sands.

In its emailed response to Bloomberg, the regulator also said it’s “committed to ensuring that the casinos in Singapore, including Marina Bay Sands, remain free from criminal influence or exploitation, and takes a serious view of any allegations of unauthorized money transfers.”

Claims about these transfers surfaced in a lawsuit filed last year by Wang Xi, who sued Marina Bay Sands seeking to recover S$9.1 million ($6.5 million) that he said was sent to other casino patrons in 2015 without his approval. The Singapore Police Force is also investigating Wang’s complaint, Bloomberg News reported last month. The casino has declined to comment on the suit.

The Singapore regulator asked Marina Bay Sands to review its third-party transfer process, one of the people said. Such transfers, when authorized, are legal and used by groups of gamblers to share winnings and losses at different foreign casinos.

Junket Operators

These transfers are sometimes made through so-called junket operators, which provide transportation, hotels and credit to high rollers. In Macau, these operators allow Chinese gamblers to get around strict capital controls by pledging assets on the mainland in exchange for credit at casinos. The junkets are more strictly controlled in Singapore.

Marina Bay’s internal probe found instances of its group employees violating accepted transfer procedures by filling in payment details on pre-signed or photo-copied authorization forms, according to a person familiar with the matter. It also uncovered cases in which original documents were destroyed, the person said.

Thorough Review

Such practices appear to have stopped since April 2018, when the casino -- which has had at least six chief compliance officers in the last decade -- amended its procedures, according to the person familiar.

“When allegations related to the mishandling of ‘letters of authorization’ were made, the company thoroughly reviewed the matter,” a Marina Bay Sands spokesman said in the statement. “The review concluded that no patron funds were transferred in a manner that was contrary to a patron’s intent.”

The company has shared this information with the authorities in Singapore and will cooperate with any governmental requests it may receive, according to the statement.

Casino Money Laundering Regulations Act

Singapore requires casinos to implement internal controls and check the authorization of fund transfers, as well as comply with requirements to prevent money laundering and terrorism financing, the regulator said in its written response to Bloomberg.

A global anti-money laundering watchdog last year urged Singapore to tighten its controls. The Financial Action Task Force reported in November that the city state has inadequate customer due diligence requirements for entities such as casinos and real estate agents. It noted “moderate shortcomings are still affecting” the two sectors, without citing any companies. The casino regulator didn’t reply to a request for comment on the watchdog report.

Crazy Rich

Marina Bay Sands is one of two firms granted licenses to operate casinos on the island. Last year, the Singapore government agreed to extend the licenses held by Genting Singapore Ltd. and Las Vegas Sands to 2030, in exchange for pledges to invest a combined S$9 billion in tourism projects.

With a profit margin ranging from 53% to 56% in the three years ending in 2019, Marina Bay Sands is among the most profitable integrated gaming resorts in the world, according to Bloomberg Intelligence analyst Brian Egger.

Since opening in 2010, the casino has became an iconic tourist attraction, and was featured in the “Crazy Rich Asians” film. In addition to the 160,000 square-foot casino, the complex has three 55-story hotel towers topped with a boat-shaped sky deck and pool, as well as a shopping mall and convention center.

Like many casinos around the world, Marina Bay Sands is closed due to the pandemic, slashing revenue for firms like Las Vegas Sands. Macau gaming revenue across all casinos plunged 93% in May from the year earlier, as operators await the opening of borders to spark a recovery after an unprecedented shutdown.

(Adds the Financial Action Task Force report in 19th paragraph)

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(a)Requirements for casinos. A casino shall be deemed to satisfy the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains a compliance program described in paragraph (b) of this section.

(b)Compliance programs.

(1) Each casino shall develop and implement a written program reasonably designed to assure and monitor compliance with the requirements set forth in 31 U.S.C. chapter 53, subchapter II and the regulations contained in this chapter.

(2) At a minimum, each compliance program shall provide for:

(i) A system of internal controls to assure ongoing compliance;

(ii) Internal and/or external independent testing for compliance. The scope and frequency of the testing shall be commensurate with the money laundering and terrorist financing risks posed by the products and services provided by the casino;

(iii) Training of casino personnel, including training in the identification of unusual or suspicious transactions, to the extent that the reporting of such transactions is required by this chapter, by other applicable law or regulation, or by the casino's own administrative and compliance policies;

(iv) An individual or individuals to assure day-to-day compliance;

(v) Procedures for using all available information to determine:

Casino Money Laundering Regulations 2019

(A) When required by this chapter, the name, address, social security number, and other information, and verification of the same, of a person;

(B) The occurrence of any transactions or patterns of transactions required to be reported pursuant to § 1021.320;

(C) Whether any record as described in subpart D of part 1010 of this chapter or subpart D of this part 1021 must be made and retained; and

(vi) For casinos that have automated data processing systems, the use of automated programs to aid in assuring compliance.