AGA Publishes Updated AML Compliance Guidelines for Gaming

On July 28, the American Gaming Association (AGA) released the third edition of its Anti-Money Laundering (AML) Compliance Best Practices, a publication meant to mitigate money laundering activities perpetuated in the gambling industry. This is the third time the association has published AML compliance guidelines after agreeing to take the lead in drafting American gaming industry regulations. AGA took the mantle back in 2014 when it published the first draft, which was later updated in 2019.

The latest update of the AML guidelines seems to have been motivated by recent reports that found severe cases of criminal economic activities linked to several casinos, especially those operating online gambling platforms.

Another possible driver is the fact that over half of the nation’s states have already legalized online and sports betting, with a considerable number arriving at this decision post-pandemic. Moreover, following the exponential growth witnessed in states that have passed legislation in favor of online and sports gambling, other jurisdictions are considering joining the movement. So, from how the AGA sees it, it is vital to bring the regulations up to par with the rapidly expanding US gaming sector.

According to AGA reports, the AML Best Practices paper was updated after a thorough review by a team of respectable compliance experts across the US.

Money Laundering Getting Worse with Tech

The online gaming industry has been under a lot of heat recently following reports of illegal activities carried out by casinos in some regions, one being British Columbia. After testimonies from over 200 witnesses, a white paper was published in June revealing that billions of dollars were laundered in British Columbia casinos.

The report, which was submitted by the Cullen Commission, outlined some of the ways that perpetrators used to take advantage of the system, including making suspicious transactions at certain times of the day. In addition, significant government agencies were implicated in the matter, with the British Columbia Lottery Corp. receiving considerable scrutiny for allegedly receiving incentives to overlook violations of the AML regulations.

What Has Changed?

Besides the two factors mentioned above, much has changed in the three years since AGA announced the previous guidelines. For one, the Anti-Money Laundering Act of 2020 was passed, became law in 2021, and major amendments were made to the Bank Secrecy Act (BSA) as a result. On another note, about a quarter of the states have approved digital payments for use at gambling establishments. This has opened more than a few cans of worms for AGA as it strives to keep the gambling industry as clean and respectable as possible, hence the document.

The newly released Best Practices guidelines try to address some of the issues that have arisen in the past three years by including a revision of terms and more elaborate red flag indicators. The paper stated that while AGA does not expect to attain perfection in combatting the ever-changing money laundering crimes, it was still committed to effectively delivering on its mandate to curb cases of ‘money laundering and illicit financing threats.’

The guidelines also called upon casino operators to evaluate their respective AML/BSA compliance mechanisms to keep up with new patterns in the illegal sector. Alex Costello, the AGA vice president for government relations, commented on the purpose of the guidelines and why they are necessary for the current digital age. He said:

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“As the methods and sophistication of financial crimes evolve, the gaming industry continues to spearhead efforts to combat money laundering. An invaluable resource for our industry, this guide demonstrates gaming’s commitment to protect the US financial system from money laundering and other forms of illicit finance.”

Waging War Against Human Trafficking in the Gaming Scene

More measures have been taken to ensure that the new guidelines effectively serve their purposes. For instance, the Preventing and Combating Human Trafficking in the Gaming Industry paper casts a spotlight on issues relating to gambling operations and human trafficking. The AGA Ant-Human Trafficking Task Force put the report together to outline how traffickers can misuse gambling operators to ‘clean’ up illegal funds from their illicit operations.

Since gambling operations are an easy target for criminal syndicates seeking to process criminal proceeds, it only follows that AGA would want to get as far ahead of the game as possible to prevent further activities. Regularly revising the Best Practices guidelines and following through with implementation is therefore held in high regard.

Other jurisdictions have also been in negotiations to revise their gambling rules to keep them relevant in the current industry. For example, territories like Macau have introduced cross-border gambling restrictions to regulate the flow of money in the Special Administrative Region’s (SAR) primary revenue source. States in Australia have also proposed more stringent measures to prevent money laundering following recent scandals relating to some big operators.