CRIME AND PUNISHMENT


procedures, suspicious transactions reporting and further regulating, supervising and monitoring anti-money laundering operations. This comprehensive report aids foreign


regulators when judging gaming license suitability and a jurisdiction‘s oversight capability to confront illegal activities. Financial institutions also use the FATF research to determine client loan and account integrity. Since taking the job on July 1, 2013, AGA CEO/President Geoff Freeman has advocated tighter gaming controls that include regulated sports betting. When then FinCEN Director Jennifer Shasky-Calvery challenged casinos to improve their compliance practices at G2E 2013, AGA soon released its first Best Practices for AML Compliance in 2014. It is updated annually. Freeman states that over four years, “The


AGA has built a partnership with the federal government that serves as a model for other industries.” The AGA membership has responded


favorably, especially among those international companies like MGM Resorts International and Las Vegas Sands. According to Gushin, “Gamblers coming from Macau to Las Vegas posed potential problems. The casino representatives, no longer the junket reps, now file their CTR-Cs. This process also protects players’ identities.“


jurisdictions protect themselves? Sophisticated intelligence complements law


How can companies and


enforcement action. The Arkin Group’s diverse professionals, who worked within the U.S. government, policy world and private sector, provide on-going intelligence reporting, physical security gap assessments and cyber security vulnerability analyses. Their extensive expert network among government agencies guides them with solutions in a fast-moving cyber crisis situation. Devine says, “Gaming’s greatest threats


move as fast as gaming’s evolution and new technologies. It’s no longer limited to stolen money. Virtual reality is now a new landscape and cyber issues blend with physical security issues. One grave concern is that data intrusion and the use of gaming platforms can fairly easily spread viruses, steal user data and disable wider networks. This causes a paralyzing chain reaction within the physical world.“ What can casinos do? Devine acknowledges that although casinos recognize their losses and intrusions, they often lack sufficient resources to respond.


34 SEPTEMBER 2017 He states, “Casinos must allocate money to


hire cyber skill experts because they will either pay upfront or suffer consequences later. Gaming companies cannot ignore these issues and each must assess its own risk management equation. The Arkin Group’s independent evaluations help with recommendations against vulnerabilities.” For example, Devine describes “FIN10,” an


active hacking group from 2013-2016. A 2016 report reveals it used loopholes in publicly available software to hack North American casino and mining companies. FIN10 entered company systems, stole and encrypted their data and extorted ransom to prevent publication of sensitive information. Their price...from 100-500 bitcoins, or a $124,000 to $620,000 cash value. The daily expenses to use defensive software can cost millions. Devine questions the gaming industry‘s ability to absorb these costs to keep pace or ahead of the threats. Background checks may be as high level or


detailed as a client wants and Devine advises varied checks for different employees. However, he also warns this data expires when completed and needs to be run periodically. “Organizations should incorporate an on- going background check process that ensures no red flags arise once the investigation concludes,” says Devine. Raftery agrees. He recommends at least a 10-


year look back at an employee’s work history, criminal history and social media presence. Regulating operation and accountability is another tough security measure. Gushin frequently travels internationally to consult with foreign clients. His compliance recommendations urge jurisdictions to initiate and enforce audit trail, surveillance tapes and licensing controls. He says, “Casino team members should be


regularly evaluated because backroom paper accounting is unregulated. Sophisticated jurisdictions using thorough software programming often catch people whose personal greed and arrogance has them frequently taking risks. Regulators without a solid tax system cannot analyze and audit.” Another crucial modern problem is fighting workplace violence. Raftery says their training inside the business benefits employees who learn safety techniques applicable to their everyday lives. They feel safer at home and work, which increases productivity. Raftery says, “Cost-conscious casinos may


allocate resources for financial crimes over external/internal staff violence. Falcon‘s workplace violence training techniques are inexpensive compared to the price of potential lawsuits. However, many casinos and other


businesses do not recognize they need this training, doubting a workplace violence incident will occur at their facility. I believe it is not ‘if’ but ‘when‘ and insurance carriers have begun selling workplace violence policies.“ The Foreign Corrupt Practices Act of 1977


(FCPA) also affects international casino portfolios. It bars companies and their executives from using personal payment or rewards to influence foreign officials and secure business. Some foreign locations require using a local


business liaison and/or partner to do business. Raftery says, “These agents are on the payroll, represent the company and must maintain integrity. In 2015, the average corporate FCPA fine was approximately $156 million. Since 2016, the Department of Justice added 100 FBI agents to the FCPA squads to pursue both individuals and corporations.“


Unregulated casinos Despite continuous efforts to update strict


rules, unregulated online casinos are difficult to monitor. Nevada, New Jersey and Delaware have proactively designed comprehensive, highly- regulated programs and more states may follow. To foster accountability, New Jersey Internet gaming operators must link to a licensed land- based Atlantic City casino and share the profits. Geographically, anyone betting must be physically within New Jersey’s borders at the time.


Consumers, especially problem gamblers,


may unknowingly aid illegal online activity. Self- exclusion from commercial casinos or regulated Internet gaming may not deter their wagers them on illegal, unregulated sites or exposing important personal and financial information to criminals.


“Illegal online gaming threatens players who


never know who’s on the other side of the screen. Is the technology far enough along since people can launder money via multiple legal online accounts? Casinos should now know their customers.


There has been talk of gathering important information by mandating player cards for all gamblers, but I see it going nowhere. Some argue its urgency for effective surveillance; others warn against possible gambler ‘profiling.‘ However, high rollers must explain their incomes, like how can someone earning $100,000 gamble $200,000 a year? That throws up a red flag for the government.“


The challenge against the bad guys is forever,


but experienced, skilled people continually fight the good fight to stop them in their tracks.

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