Nevada Proposes Felony Charges for Unauthorized Gambling Affiliates

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[h=1]Nevada Proposes Felony Charges for Unauthorized Gambling Affiliates[/h] <small>January 26th, 2015 by Sean Gibson</small>
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Nevada has proposed SB 40 which would add language into their laws that would make it a felony for affiliates to receive any compensation from unauthorized online operators. (Image: SnipView.com)

Nevada, which is one of three states to allow online gambling activities, has proposed an amendment to its gambling legislation that would make it a felony to profit as an affiliate to unauthorized online sites.
Anyone affiliated with a gambling site not holding a vetted Nevada license, if the amendment is added, could be prosecuted well above a simple slap on the wrist, which would most likely be enough of a threat to end affilliates’ relationships.
[h=2]Senate Bill 40 Filed in Nevada[/h] The state senate saw a pre-filed amendment back in December named “Senate Bill 40″ and was referred to the judiciary committee.
The hope behind the bill is that it would pass early in the 2015 session of the state legislature, which will pick back up on February 2.
The bill is purportedly only one page and would add on to Capter 465 of the Nevada Revised Statutes.
The language would include details about dealing with the transaction of wagers through “mediums of communication” which is vague enough to cover written, verbal, or online methods.
Currently it is illegal to accept or receive wagers in Nevada without a state gambling license.
This new amendment would extend that liability of illegal activity to any entity that would financially benefit from aiding anyone offering illegal wagers.
Specifically, affiliates who help refer business to online sites who do not take wagers themselves, are targeted by this proposed amendment.
[h=2]Details of SB 40 and Potential Punishments[/h] The amendment specifically would make it unlawful in Nevada to receive, whether directly or indirectly, any compensation, reward, percentage or share, or property played.
It would apply to anyone accepting or facilitating wagers placed with those entities that do not possess a Nevada state license.
The safe assumption is that the amendment will be passed with flying colors early in 2015 as the state tries to assess and solve some of the issues they have had rolling out online poker and gambling within their borders.
If it does pass, SB 40 could be found guilty of a Category B felony, which means time in a federal prison between one and six years and a fine up to $5,000.

The details of SB 40 coincided with a new proposed online poker bill in California that also had language that would make it a felony for players to play on any online gambling site not holding a state license.
It would stand to reason that state authorities are starting to align on policy and certainly aren’t content with anything short of serious penalties to assure compliance from players, affiliates, and operators.
[h=2]Intended Impact by Nevada Legislators[/h] It is clear that this amendment is intended to help curb sites operating in Nevada that do not have a state license and to make sure any affiliates operating in the state strictly turn their attention to sites with licenses.
If the well dries up, so to speak, for player pools on illegal sites operating in the state (since affiliates will not be driving traffic) it stands to reason that Nevada’s vetted sites will finally see some growth.
 

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December 24, 2014
Geoff Freeman
President and CEO, American Gaming Association
1299 Pennsylvania Avenue, NW, Suite 1175
Washington, D.C. 20004
Dear Mr. Freeman:
Thank you for your December 23, 2014, letter to FinCEN Director Jennifer Shasky Calvery with
your concerns about a news article referencing potential FinCEN guidance concerning sports
betting. While the article apparently was based on unauthorized sources without a clear
understanding of the facts, we have been planning on communicating to the casino industry
directly with respect to a particular concern in this regard.
It has come to the attention of the Financial Crimes Enforcement Network (“FinCEN”) and its
law enforcement and regulatory colleagues that increases in sports betting conducted on behalf
of third parties are facilitating criminal activity and posing a money laundering risk to the U.S
financial system. In connection with this, it has also come to our attention that casinos may be
under the impression that unless specifically directed to do so, a casino never has to ask a patron
whether he or she is betting on his or her own behalf or on behalf of another party. We are
communicating directly with your organization to correct any such misperception and to remind
your industry about the importance of applying a risk-based approach with respect to this issue
as well as the need to implement reasonably designed AML programs to address among other
risks, the risks associated with third-party betting.
Anti-Money Laundering (“AML”) Vulnerabilities and Risk Exposure
FinCEN understands that certain organizations and individuals have been circumventing various
laws related to sports betting.1 More specifically, criminals are making bets with legally
operating sports books, including by using intermediaries to place bets on behalf of unidentified third parties (third-party betting).
In these cases, the intermediaries rarely voluntarily disclose to
the casino that a transaction is being conducted on behalf of a third party, thereby disguising the
third party’s role in the transaction and obscuring the source of funds used to place the bet. This
poses distinct money laundering risks for casinos.
In addition to concealing the owner and the origin of funds, third-party betting poses distinct
money laundering risks for casinos because it allows criminal organizations, illegal sports books,
and others located in any state, where gambling may be illegal, to place bets within states where
sports betting is legal.
Law enforcement has been focusing on this activity for some time. For example, in October
2012, law enforcement closed down a significant bookmaking operation associated with a major
organized crime group that had connections to Las Vegas sports books.2 Additionally, FinCEN
has observed numerous instances in which casino sports books failed to identify in Currency
Transaction reports (CTRs) third-parties on whose behalf transactions had been conducted.
Money laundering and Bank Secrecy Act (BSA) compliance risks associated with unidentified
third party-betting may include:
 Increased money laundering exposure.
 Failure to identify and report suspicious activity.
 Failure to file accurate CTRs.
 Possible AML Compliance program deficiencies.
AML Compliance Program Requirements
Casinos subject to the BSA are required to develop and implement a compliance program
reasonably designed to manage the risk of illicit activity and ensure compliance with applicable
regulations. The BSA requires casinos to file reports, properly identify customers conducting
transactions, and maintain appropriate records of transactions. These reports and records are
highly useful in criminal, tax, or regulatory investigations or proceedings, or in the conduct of
Wire Act, often called the Federal Wire Act, prohibits the operation of certain types of betting businesses in the
United States. The U.S. Fifth Circuit Court of Appeals has ruled that the Wire Act prohibition on the transmission
of wagers applies only to sports betting. The Travel Act forbids the use of the U.S. mail, or interstate or foreign
travel, for the purpose of engaging in certain specified criminal acts. The Illegal Gambling Business Act was
enacted as part of the Organized Crime Control Act of 1970 and specifically aimed at syndicated gambling, that is,
large-scale, illegal gambling operations that were thought to be financing organized crime.

intelligence or counterintelligence activities, including analysis, to protect against international terrorism.3 Casinos’ compliance programs also must include risk-based procedures to prevent customers from circumventing BSA requirements.
The BSA requires casinos to file accurate and complete reports of each transaction in currency involving either cash in or cash out, of more than $10,000 (Currency Transaction Reports) (CTRs).4 Casinos also are required to aggregate transactions in currency (that is, treat the transactions as a single transaction) if the casino has knowledge that the transactions are conducted by or on behalf of any person and result in either cash in or cash out totaling more than $10,000 during any gaming day.5 With respect to completing a CTR, the BSA requires casinos to verify and record the name and address of the individual presenting a transaction, as well as record the identity, account number, and the social security or taxpayer identification number (if any) of any person or entity on whose behalf such transaction is conducted.6
When implementing a compliance program, a casino must consider and manage the risks associated with sports betting on behalf of third parties in order to file complete and accurate CTRs, as required by the BSA. One way that a casino can obtain information about the identity of the person on whose behalf the transaction is being conducted is to ask the person conducting the transaction whether he or she is acting for himself or herself or on behalf of another person.7 This approach may be particularly effective for casinos that may not otherwise be able to identify a third party on whose behalf a transaction is being conducted. Casinos may also implement other approaches that are best suited to their business activities and customer base, but that allow them to identify effectively those persons on whose behalf a CTR-reportable transaction is being conducted. Casinos should also consider the possibility that a person conducting a transaction may intentionally fail to disclose a third party on whose behalf the transaction is being conducted. In circumstances where a casino knows or suspects this to be the case, the casino would be required to file a SAR consistent with FinCEN’s regulations.8
Casinos should be aware that failure to identify a third party on whose behalf a transaction is conducted may constitute a violation of the casinos’ recordkeeping and reporting obligations under the BSA. In addition, this may prompt concern over the adequacy of the casino’s overall compliance program and result in potential deficiencies and rule violations. FinCEN is authorized to assess civil money penalties against a casino, card club, or any partner, director, officer, or employee of the casino for willful violations of BSA anti-money laundering program,

reporting, and recordkeeping requirements, and the U.S. Department of Justice prosecutes criminal violations of the BSA and related money-laundering statutes.9
FinCEN appreciates the efforts of your organization to help maintain industry focus on the importance of the BSA, and the effort that the American Gaming Association has put into the recent release of a best practices document. FinCEN invites the AGA to share this letter with its members in advance of FinCEN placing it on our website for future reference. Please don’t hesitate to reach out to us again with any of your concerns. Your association and members are welcome to contact FinCEN’s regulatory helpline at 800-949-2732 with any questions about this letter.
Sincerely,
/s/
Jamal El-Hindi
Associate Director
Policy Division
 

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American Gaming Association Welcomes FinCEN Guidance on Sports Books, Urges Further Scrutiny of Illegal Sports Betting

Risk of money laundering in the vast, illegal sports betting market is far greater than in the highly regulated, legal gaming industry



January 16, 2015



Contact Chris Moyer
(603) 479-1402





Washington, DCAmerican Gaming Association (AGA) President and Chief Executive Officer Geoff Freeman released the following statement after the Financial Crimes Enforcement Network (FinCEN) released new guidance for sports book operations:
“AGA members are committed to robust anti-money laundering measures in every aspect of their operations and invest significant resources to tailor risk-based compliance programs for every corner of the casino, including sports books. The industry welcomes continued guidance from FinCEN to protect against attempts to use casinos for money laundering and illicit financing and to ensure the integrity of the U.S. financial system.
“The risk of money laundering is far greater in the vast, unregulated, illegal sports betting market than in the highly regulated, legal gaming industry. While casinos routinely look for suspicious bets at sports books and have worked with law enforcement to identify illegal activity – in some cases leading to criminal convictions – no such oversight exists for the illegal sports betting market. The AGA is committed to aggressively addressing illegal gambling, including illegal sports betting, and looks forward to partnering with FinCEN, law enforcement and others in this effort.”
Last month, the AGA released a comprehensive set of Anti-Money Laundering (AML) Best Practices to guide casino efforts to protect the U.S. financial system and our national security from money laundering and other forms of illicit financing. The AGA’s Best Practices for Anti-Money Laundering Compliance are the result of more than a year of work to identify and enhance industry guidelines, which were developed in coordination with FinCEN, and are continually updated.
 

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Not sure how this affects me .


I'm gonna wait for the cliff notes.
 

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Not good for people who bet like i do.
 

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Is it illegal in other statesalready/??

Weren't some touts taken down bc of affiliate stuff back in the day?
 

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They are after runners in Las Vegas who when confronted say they are part of a betting corporation and have a percentage of the business. Basically it's all about Billy Walters.
 

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These laws are a joke......the US is going into the toilets with all their stupid gambling, drug & prostitution laws......most lawmakers are hypocrites & partake in one of the above vices I stated.
 

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you guys got any stories or examples?
could help or at least be very interesting, i think its all about grabbing money under the guise of anti terrorism.
 

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