Money Laundering: Rapid Growth of Casinos Makes Them Vulnerable

• NCJ Number: 161117
• Author(s): D W Dutton; L R Watson; K H Ebert; B J Lipman; G R Hamilton
• Date Published: 1996
• Length: 52 pages
• Corporate Author: US Government Accountability Office
• Sale Source: Azimuth Inc.
• Publication Type: Survey
• Language: English
• Country: United States of America
• Note: Report to the Permanent Subcommittee on Investigations, Senate Committee on Governmental Affairs

Annotation

The General Accounting Office (GAO) reviewed the extent of legalized gaming in the United States, especially that occurring in casinos, and currency transaction reporting requirements for casinos.

Abstract

Interviews were conducted with officials from several government agencies, including the Internal Revenue Service (IRS). The Money Laundering Suppression Act of 1994 and recent amendments to the Bank Secrecy Act (BSA) were reviewed. Visits were made to selected casinos in Las Vegas, Nevada, and Atlantic City, New Jersey; to riverboat casinos in Louisiana and Mississippi; and to a large tribal casino in Ledyard, Connecticut. The GAO review found that legalized gaming is expanding rapidly across the United States, that 48 States currently permit some form of legalized gaming, and that casino gaming is among the fastest growing forms of gaming. The amount of cash wagered annually in casinos grew from $117 billion in 1984 to $407 billion in 1994. The BSA and its implementing regulations have been a major weapon against money laundering by casinos since they require most financial institutions, including certain casinos, to report specific currency transactions over $10,000 to the IRS. Nevada casinos are exempt from some BSA reporting requirements under an agreement with the Treasury Department because the State has currency transaction reporting and recordkeeping requirements that are generally similar to those of the BSA. Under the Indian Gaming Regulatory Act of 1988, tribal casinos are not subject to the BSA but must report currency transactions pursuant to a more limited Internal Revenue Code provision regarding cash received in a trade or a business. Federal enforcement efforts to ensure casinos comply with currency transaction reporting requirements vary according to casino and jurisdiction. Appendixes contain supplemental information on tribal gaming, casinos visited by the GAO, types of legalized gambling, revenues by gaming activity and casino, currency transaction reports, and the Financial Crimes Enforcement Network. 2 tables and 12 figures