Monthly Casino Compliance

“While most people would like to think of money laundering as a specific activity toward a specific purpose or outcome, in actuality, the term, money laundering encompasses a broad range of activity and purpose.”

What is money laundering? Is it conducting transactions with the intent of obscuring the source of those funds? Yes. What about conducting transactions to change one form of currency into another? Also, yes. How about conducting transactions that obscure a transfer of funds from one person or place to another? Yes again. One might even say merely the spending of illicit funds is money laundering.

Okay, wait a minute…aren’t those different things? and for different purposes? The answer is yes.

While most people would like to think of money laundering as a specific activity toward a specific purpose or outcome, in actuality, the term, “money laundering” encompasses a broad range of activity and purpose. That’s what confuses many associates, makes it difficult to understand, and therefore difficult to recognize and report. To help put it into perspective, one must first think about money laundering in the simplest of terms, then it becomes easier to expand upon and apply those terms to activity seen on the gaming floor.

An article published in the ACAMS Today September-November 2021 issue titled “Casinos and the Why of Money Laundering,” by Paul Camacho, introduced the money laundering goal methodology (MLGM) as an intuitive means to understand casino money laundering. The MLGM postulates that criminals engage in money laundering with the intent to accomplish at least one of the transactional goals described in the table below.

Goal	Intent of Transaction
Conceal	To hide the beneficial owner’s identity from a transaction or information report with the government
Convert	To convert funds to a form that is less traceable and/or more convenient to use
Transfer	To transfer funds from one person or place to another
Clean	To create an alibi that funds originated from gaming winnings or obfuscate the money trail
Spend	To enjoy illicit funds, often without regard to accomplishing any other money laundering goal
Store	To store funds outside the traditional banking system

By using the MLGM to explain why money launderers engage in specific transactions, the concept of money laundering becomes more understandable and relatable, especially to the layperson who is not steeped in anti-money laundering (AML) training and experience.

It is important to note that criminals may attempt to achieve not just one, but a combination of goals. For example, one might want to change the physical form of their money (Convert) while also wanting to avoid their transactions being logged or reported (Conceal). This may also involve structuring, which is a mechanism of money laundering. Another example might involve a person spending a significant amount of money (Spend) in order to generate wins that would explain a larger amount in their possession (Clean). It is not uncommon for criminals to accept up to a 30% loss in the process of laundering illicit funds.

The MLGM table is a useful tool in simplifying and helping understand the broader range of activity defined as money laundering, as well as why. By applying the goals and intents described to unusual transactions or behaviors on the gaming floor, it becomes much easier to recognize money laundering and report it to the AML/CFT/OFAC Compliance Team.

Applying the Why and How of Money Laundering to Casinos, Paul Camacho, December 15, 2021, LinkedIn, https://www.linkedin.com/pulse/applying-why-how-money-laundering-casinos-paul-camacho

*This article was previously released: January 2024