Regulatory Requirements for Casinos
Casinos are cash-intensive businesses, but they also handle a broad range of other financial transactions. They can conduct wire transfers, accept deposits, extend credit, issue checks and other noncash financial instruments, and exchange foreign currency. To ensure the integrity of all these transactions, casinos have to comply with layers upon layers of regulatory requirements from several agencies, including state gaming authorities, federal banking regulators, the U.S. Department of the Treasury, and the Internal Revenue Service, not to mention each casino's internal auditing and regulating bodies.
The Bank Secrecy Act
The federal Bank Secrecy Act (BSA) came into being in 1970 and initially was aimed at discouraging illegal transactions at banks, credit unions, and savings and loans. In 1985, the law was expanded to include casinos with gross annual gaming revenues of more than $1 million. Among other things, BSA requires casinos to file Currency Transaction Reports on cash transactions involving more than $10,000, whether the player is paying it in or the casino is paying it out.
Transactions include the purchase of chips or tokens, front money or safekeeping deposits made by a player, the purchase of a casino check, payments on various forms of credit, exchanges of foreign currency, and, of course, wagers. Casinos also are required to file these reports when they pay out more than $10,000 on such things as cashing out chips, advances of credit, wire transfers, check cashing, and reimbursements for a player's travel, lodging, or entertainment expenses. Casinos have to file these reports within fifteen days, and they must keep copies of these records on file for five years.
Casinos also must report multiple transactions for one player in a single gaming day that meet the $10,000 threshold. For example, if you bought $5,000 worth of chips, lost $4,000 at the blackjack table, exchanged your remaining $1,000 in chips for slots tokens, and won a $7,000 jackpot, the casino would have to file a Currency Transaction Report on your activity for the day.
At Nevada casinos, the threshold for reporting is still $10,000, but multiple transactions are added together only if they are all deposits or purchases by the player or money paid to the player. In the example in the Bank Secrecy Act section, the multiple transactions would not have to be reported because the player neither paid in more than $10,000 nor cashed out more than $10,000.
Suspicious Activity Reports
The requirement for casinos to report suspicious financial activities is nothing new. But since the September 11, 2001, terrorist attacks, personnel at all financial institutions, including casinos, have been on higher alert for such activities. Suspicious Activity Reports (SARs) go to the U.S. Treasury Department's Financial Crimes Enforcement Network, and they are not public record; that is, casino personnel can file an SAR on anyone without that person's knowledge. Because of the heightened awareness of potential terrorist activity, you could inadvertently (and quite innocently) raise questions about your own activities at the casino if you don't know what their staff members are trained to watch for.
Most important, make sure you have a valid form of identification. You'll need it to open a player's club account. If you are dealing with large amounts of money or win a jackpot, you'll also need it for the various forms you'll have to fill out at the cage cashier's desk. A valid driver's license is the most commonly accepted form of identification, but most casinos also accept state-issued ID cards, military ID cards, and valid passports. These days, even an expired driver's license can trigger questions about your real purpose at the casino.
Casino personnel also will be on the lookout for people who try to structure their transactions to avoid the $10,000 reporting threshold. For example, asking what constitutes a “gaming day” at the casino, then making sure you don't go over the reporting threshold by the end of the gaming day is sure to raise suspicions. Similarly, if you and your best friend each buy $3,000 worth of chips separately, play a few hands of blackjack, decide you're not in the mood to gamble, and pool your chips when it comes time to cash out, that might raise a flag for the cage cashier. If you're betting large amounts of money but playing both sides of the bet — i.e., betting odd and even at roulette, or come and don't come at craps — expect casino personnel to keep a sharp eye on you.
Never, never, never ask a casino employee not to file a currency transaction report or to break down your transactions to avoid the reporting threshold. Such requests are unethical and could lead to problems with casino security and even the U.S. Treasury Department.