Anti-money laundering (AML) best practices at major casinos on the Las Vegas Strip have come under significant scrutiny since the 2018 PASPA ruling. This year, three major casinos reached settlements with the Nevada Gaming Commission over AML deficiencies. In anticipation of the upcoming Global Gaming Expo (G2E) in Las Vegas, the American Gaming Association (AGA) has released an extensive guide detailing best practices for establishing a solid AML framework across the gambling industry, extending beyond Las Vegas.
The AGA, which represents the $329 billion US casino industry, sponsors the G2E, recognized as one of the largest gambling conferences globally. The 64-page guide aims to assist commercial sportsbooks in addressing the increasing risks associated with money laundering, particularly as the use of virtual currencies grows. A significant portion of the guide focuses on strategies to combat crypto laundering.
To maintain the industry's integrity and prevent illegal financial activities, casinos are urged to create effective risk-based programs that comply with the Bank Secrecy Act requirements.
The AGA highlighted that sports betting presents heightened AML risks due to its binary outcomes, which can facilitate money laundering. Similar to games like baccarat and roulette, sports betting allows customers to wager on both sides, providing a means for laundering funds. For instance, a bettor wagering $100 on a home team and another $100 on the opposing team would only incur the vigorish, while receiving a clean payout from the casino.
Moreover, risks can also surface if a patron places a bet on behalf of an unidentified third party, a practice referred to as wagering through a “beard.” The spotlight on AML practices has intensified over the last two years, particularly following the convictions of several illegal bookmakers in Southern California. In August, Matt Bowyer was sentenced to around one year in federal prison for running a significant illegal sports betting operation. Bowyer collected approximately $325 million from Ippei Mizuhara, a former interpreter for baseball star Shohei Ohtani, and laundered millions through Resorts World Las Vegas. This year, both MGM Resorts and Wynn Las Vegas also settled with Nevada regulators regarding AML charges.
In March, Resorts World agreed to a $10.5 million settlement, marking the second-largest in state history. The Nevada Gaming Commission also imposed fines of $5.5 million and $8.5 million on Wynn and MGM Resorts, respectively.
Two other bookmakers involved in the case, Wayne Nix and Damien LeForbes, are awaiting sentencing. LeForbes, a professional poker player, allegedly laundered millions through a casino believed to be Resorts World. A federal plea agreement details a conversation between LeForbes and a betting client who expressed concerns that law enforcement could monitor their transactions. LeForbes advised the client to divide the payment across multiple addresses: “I’d send $100K at a time to different addresses. You can create a different address in a wallet every time. Just don’t send [it] to an exchange.” During a search on December 22, 2023, authorities seized two Trezor wallets from LeForbes’ home.
When implementing AML best practices for crypto transactions, the AGA recommends that virtual currencies be converted to US dollars before being used at sportsbooks. Once converted to dollars, these transactions will undergo the same Suspicious Activity Report reviews as other cash activities at a casino. At next week's G2E conference, several panels will focus on AML practices across the industry, featuring compliance officials from MGM, Wynn, and Resorts World.
