CURRENCY REPORTING REGULATIONS 101
By Vinny DeCarlo
Vincent DeCarlo is a retired veteran casino man with over 20 years of upper management experience. His expertise covers the pit, security, surveillance and even served as a General Manager for two different casinos. Currently, Vinny travels the states as a freelance reporter and a personal consultant to many Indian casinos. According to Vinny DeCarlo, there are two types of casino employee people; those that know DeCarlo, and those that claim to know DeCarlo, so, never believe what you hear.
Note: Casinos must report to the Feds (under Title 31) large cash transactions between a customer and that casino. The purpose of this article is to explain the rules for reporting these cash transactions and how they impact players.
Title 31, as it pertains to Money Service Businesses (MSB’s) and now casinos nation wide, was amended in 1982 and has been subjected to additions and/ or altered almost every year since. The true nature behind this section of title 31 (that pertains to casinos and banks) is to ‘out’ money laundering, which (the government feels) when done correctly, identifies drug traffickers, organized crime, and terrorist operations. This is the same reason that the government halted the printing of any currency over the common $100 bill. On that same note, when a casino or money service business, such as a bank, receives a bill larger than $100, they must contact the secret service/ treasury department for instructions on how to comply with the legal destruction of said bill.
Due to the government’s war on drugs, the government seems to think that anyone with $10,000 or more is in to some kind of crooked activity. This fear alone required banks, and now casinos, to report any and everyone that has or completes any transaction over $10,000. The MSB’s are required to train any money handling employee in the field of money laundering and suspicious financial activities, to maintain a log of annual training, and have even an in-house money laundering, suspicious activity czar. Most casinos train each and every employee in the house for good measure.
Casinos caught circumventing, or even attempting to circumvent, the guidelines of title 31 (structuring by means of cashing out less than $10,000 at a time or having agents/ friends cash them out in less than $10,000 increments) can face financial fines of up to a record $2.5 million dollars. The individuals involved (be it the employee, player or both) in such criminal activity are not overlooked either and Title 31 crimes can lead to civil penalties/ fines of not more than $250,000 and 5 years imprisonment or both not to mention the casino employees current employment as well as any future job that requires money handling. A non-casino employee convicted of circumventing Title 31 money reporting laws can also be fined up to $250,000 and not more than 5 years imprisonment or both. So please, take this article seriously as the consequences can be a devastating, life changing event with life-long repercussions.
As of July 1, 2007, Nevada Regulation 6A, the state’s long-standing alternative to federal cash-reporting requirements, was no longer in effect. Reg 6A has been abolished and Nevada must now follow the dictates of the Federal Title 31 when reporting large cash transactions.
Casinos are considered MSBs (Money Service Businesses) and must comply with FinCEN (Financial Crimes Enforcement Network) rules and regulations. Title 31 has always been the rule for casinos in Arizona, California, Mississippi, New Jersey, etc., but up until last July 1, Nevada casinos were no longer exempt. The rules haven’t changed that much, but lets shine some light on the ones that did change with some added explanation.
Under Title 31, whenever cash transactions between a customer and the casino exceed the magic number, $10,000, in cash-in or cash-out in a 24-hour gaming day, a Currency Transaction Report (CTR) must be filled out by the casino and filed with the Internal Revenue Service within 15 days. Some will argue that, "No, it must be $10,000 and 1 cent" and they’re right but if a player has just cashed in, wagered or cashed out $10,000, the casino employees are instructed to attempt to gain identification. If this happens at a live table, all action must stop until that identification is produced. Should the player deny, he is subsequently barred from play and the casino suits (taking the denial personally) will call other casinos to warn them of this player’s brazen lack of capitulation.
This is true not only when the customer puts cash into the casino, but also when the customer takes cash out of the casino. Cash-in includes: currency-for-currency exchanges; tournament or other player buy-ins; cash buy-ins at the table games; cash wagers; and any other cash-in transactions. Cash-out includes: check cashing; cashing out of gaming chips or tokens; table game jackpot payouts; currency-for-currency exchanges; tournament or other cash payouts; and any other cash-out transactions. (Cash-in transactions must be aggregated separately from cash-out transactions.)
In addition to the amount of the transaction, the CTR must also include the following: the customer's name, permanent address, and Social Security number. And the casino must verify your identity via a driver's license, passport, or other form of picture ID accepted by any federal banking establishment.
Note that the threshold at which the casino is required to request a Social Security number is when the transaction exceeds $10,000 or more—in other words, when the total of all cash transactions, "single or aggregated," exceeds $10,000 in a 24-hour period, It’s the casino's responsibility to watch and follow the players and aggregate a players cash transactions, then approach the player if the amount exceeds $10,000 on that given business day (most casinos’ business days runs from 5 a.m. to 5 a.m.). If the casino patron is from a foreign country and shows a valid passport, no SS# is required, of course, as most other countries don’t gamble on Social Security and, therefore, have no Social Security card or number.
What about large cash transactions of less than $10,000—such as cashing in, say, $4,000 in chips?
In the past, Reg. 6A allowed the casino to keep a mere description of the person making a large cash transaction of less than $10,000 (such as "white male, gray hair, about 50, 5'11, blue shirt"). This helped the employees in the pit maintain a surveillance-like contact with such players, then approach them to ask for ID when they exceeded the $10,000 cash threshold; but, this is no longer the case.
Now, starting at $3,000, an MSB (Money Service Business) is required to record the transaction. According to Title 31, when filling in the form for a transaction between $3,000 and $10,000, the casino employee must: verify and record customer information, including ID; record transaction information, including the amount, date, and serial numbers if exchanging cash for traveler’s cheques; and retain the record for five years from the date of the transaction.
Note that the casino is not required to request SS # for cash transactions of less than $10,000. Also, it’s not required to submit the form to the feds. It must, however, fill out and retain the form for five years.
A couple of other changes that may interest you is that it used to be that each pit was a discrete "watched area," but now it's the entire casino. So it's up to the pit staff to chase people all over the floor to see how much cash they might pull out of their pockets, then keep a tally of it and pass it on at the end of their shift. Also, Suspicious Activity Reports (SARs) can now be filled out at $2,000, down from $3,000, and filed within 30 days.
People love to argue this reduced rate of $2,000, as opposed to the past $3,000 figure. When they do, I merely point them to the Federal FinCen regulatory helpline (1-800-949-2732) and have them ask for a copy of the "Reporting Suspicious Activity" pamphlet 31 CFR part 103. If you call, be warned that they will ask for your full name, address, reason for your inquiry and your connection (whom do you work for that makes you want to ask these questions). So, have at it and don’t call me an idiot until after you call the feds.
Finally, and this is important, all Title 31 forms have a space for name, address, Social Security number, and ID type (passport, driver's license, etc.). Nowhere does it say that casino employees are required to get a SS# for a transaction of less than $10,000, just a valid ID. I don't think any transaction less than $10,000 will be denied if a patron who knows the regulation refuses to give up his or her SS#, as long as a valid ID is presented. However, as mentioned earlier, this won't stop them from asking for your Social Security number, which most people give out when buying a battery at Radio Shack. But unless your cash transaction is more than $10,000, you are not required to do so.
Below are a few links to the Fed sitehttp://www.irs.gov/govt/tribes/article/0,,id=119995,00.html that contains parts of the regulation that I deem important. This will give those of you that are truly interested in the governments circle jerk of "Gray Areas" a chance to completely understand Title 31 (until they change it…again).
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