Federal Regulations Relating to Casinos

Federal Law requires "an ongoing employee training program" as part of a "financial institution's" anti-money laundering efforts. Failure to create and maintain such a program can have severe consequences, including civil, criminal, and regulatory action against the violator. The following excerpt from the Code of Federal Regulations outlines some of the requirements for casino operators and emphasizes the seriousness with which the government views money laundering and terrorist financing. Other provisions set similar requirements for automobile dealers, real estate professionals, money service businesses, and others who may deal in large amounts of cash. Failure to comply with these provisions can have severe consequences. The provisions of 31 U.S.C. 5318(h), also added to the BSA in 1992 by section 1517 of the Annunzio-Wylie Anti-Money Laundering Act, authorize the Secretary of the Treasury ''[i]n order to guard against money laundering through financial institutions * * * [to] require financial institutions to carry out anti-money laundering programs.'' 31 U.S.C. 5318(h)(1). Those programs may include ''the development of internal policies, procedures, and controls''; ''the designation of a compliance officer''; ''an ongoing employee training program''; and ''an independent audit function to test programs.'' 31 U.S.C. 5318(h)(A-D). In 1994, Treasury adopted a regulation requiring casinos to implement anti money laundering programs in accordance with 31 U.S.C. 5318(h).4 Section 352 of the USA Patriot Act amended section 5318(h) to mandate compliance programs for all financial institutions defined in 31 U.S.C. 5312(a)(2). Section 352 of the USA Patriot Act became effective April 24, 2002. On April 29, 2002, Treasury issued an interim final rule providing that certain financial institutions, including casinos, would be deemed to be in compliance with 31 U.S.C. 5318(h) if they establish and maintain anti-money laundering programs as required by existing FinCEN regulations, or their respective federal regulator or self-regulatory organization.