FIN-2009-G004

Frequently Asked Questions Casino Record keeping, Reporting, and Compliance Program Requirements

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This document provides guidance interpreting the requirements of the Bank Secrecy Act ('BSA') regulations¹ as they apply to the casino and card club industries in the United States. We additionally published frequently asked questions for casinos and card clubs as FIN-2007-G005 on November 14, 2007. Casinos and card clubs may continue to rely on the guidance contained in FIN-2007-G005, which has not been incorporated into this publication.

Section A: 31 C.F.R. § 103.11 Casino and Card Club DefinitionsQuestion 1: Do Nevada slot route operators operate 'casinos' for purposes of rules implementing the BSA?

Answer 1: A Nevada slot route operator is a gaming licensee who, pursuant to a participation agreement, owns and maintains slot machines at three or more business establishments. The business establishments are owned and operated by other persons.² While it is common for Nevada slot route operators to lease space from a property owner (usually referred to as a 'space lease agreement'), and to pay a monthly rental payment to such a landlord, the Nevada slot route operator may have its own 'nonrestricted' license to conduct gaming on the premises.³ A Nevada slot route operator with a 'nonrestricted ' license to conduct gaming at a business establishment would be operating a 'casino' at the business establishment for purposes of FinCEN's BSA rules,⁴ if gross annual gaming revenue of its operations at the business establishment exceeds $1 million.⁵ Question 2: Are gaming or gambling establishments with gross annual gaming revenue of $1,000,000 or less subject to any BSA requirements?

Answer 2: Yes. The requirement to file a FinCEN/IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, for currency⁶ received in a trade or business applies to businesses that are not casinos or financial institutions under FinCEN's rules. The term 'cash' for Form 8300 reporting purposes includes coin and currency of the United States or any other country, and may include cashier's checks, bank drafts, traveler's checks, or money orders received over $10,000 in one transaction (or two or more related transactions) during a 12-month period.⁷ For purposes of illustration, the following gaming and gambling establishments or nongaming related businesses normally would be subject to Form 8300 requirements:⁸ (i) casinos or card clubs with gross annual gaming revenue of $1,000,000 or less; (ii) tribal bingo halls, off-track betting parlors, greyhound tracks, horse race tracks, or (iii) a casino hotel, gift shop, cater/banquet service, conference/seminar facilities,¹⁰ etc. The BSA prohibits any person from structuring transactions to evade reporting or recordkeeping requirements under the BSA.¹¹ Section B: 31 C.F.R. § 103.22 Currency Transaction Reporting RequirementsQuestion 3: What is the definition of a gaming day and what effect does it have on aggregating a customer's reportable currency transactions?

Answer 3: A gaming day is defined as the normal business day of a casino or card club. If a casino or card club offers 24-hour gaming, the term 'gaming day' means that 24-hour period by which a casino or card club keeps its books and records for business, accounting, and tax purposes.¹² A casino or card club must have only one gaming day, which is common to all its gambling operating divisions or departments. Maintaining one gaming day facilitates the aggregation of transactions for purposes of currency transaction reporting.Question 4: Is a card club required to file FinCEN Form 103, Currency Transaction Report by Casinos ('CTRC'), for customer currency buy-ins at poker games?

Answer 4: Yes. When a customer at a poker table buys-in¹³ for more than $10,000 in chips with currency, in a single transaction or a series of related transactions in the same gaming day, a card club must assure compliance with CTRC requirements for such transactions. The same would apply to other non-house banked card games (e.g., games commonly referred to as 'California Games'¹⁴ in certain card clubs or card rooms). If the card club has knowledge of the transactions, it must report the transactions on a CTRC.¹⁵

A card club must implement a program reasonably designed to assure compliance with the BSA.¹⁶ For the reporting of transactions in currency, regardless of whether a card club has a multiple transaction log, it must have a system of internal controls, procedures for using all available information to determine and verify, when required, the name, address, Social Security or Taxpayer Identification Number, and other identifying information for a person, as well as train personnel.¹⁷

In addition, BSA rules impose record retention requirements on card clubs.¹⁸ These requirements are independent of the requirement to implement a program for ensuring compliance with the BSA. FinCEN understands that many card clubs have internal controls that include a multiple transaction log to record currency transactions above a given threshold (usually $2,500 - $3,000). A card club that prepares or uses records of currency transactions, including currency transaction logs or multiple currency transaction logs, must retain the records.¹⁹ Also, the record retention requirement applies to transactions conducted in card or poker rooms located within the facilities of casinos. Also, please note that to comply with regulations implementing the BSA, card clubs may need to prepare and retain records not otherwise produced in the ordinary course of business.²⁰ Similarly, a casino that prepares or uses multiple transaction logs or other records for monitoring the gaming activity of a customer (e.g., in a poker room) must retain the records.²¹Question 5: Must a casino or card club have an internal control for customer chip redemptions at a cage?

Answer 5: Yes. Casinos and card clubs are required to develop and implement written programs that are reasonably designed to assure compliance with all applicable BSA requirements. This includes establishing internal controls²² to monitor compliance with currency transaction reporting requirements with regard to known customers. Neither 31 C.F.R. § 103.22(b)(2) nor (c)(3) states specifically that a casino or a card club must create a record of transactions that are less than $10,000, a casino or card club would need an effective internal control for customers (known or unknown).²³ Therefore, to be able to identify large chip redemptions at a reasonable threshold under $10,000 that were paid with currency that may have been structured to avoid reporting requirements or otherwise to obscure large cash out transactions, a casino or card club must have an internal control for customer chip redemptions at a cage. A casino or card club must aggregate customer currency transactions that occur on the floor or the cage, when it has obtained knowledge of such transactions either from examining records or actual knowledge (including of large chip redemptions for currency).²⁴ For similar reasons, a casino would need a method for identifying large redemptions at a reasonable threshold under $10,000 of a betting ticket, token, or 'TIT

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