ECA clarification - Study for European Parliament Inquiry Committee on Panama Papers
27 March 2017
“A launderer can clean cash by converting it into chips at a casino, and then exchanging it back into cash to deposit at a bank and have a cheque from the casino showing a legitimate transaction.”
This scenario is entirely unfeasible in licensed land-based casinos in Europe. As the study rightly says, a confirmation of winnings from the casino – in the described scenario a cheque – is crucial for a money laundering scenario to be successful. However, properly licensed land-based casinos in Europe do not issue any confirmations of winnings, let alone cheques, to patrons. The only rarely-used exception to this rule would be if a patron wins a slot machine jackpot or a substantial amount of money during a longer casino visit. This confirmation would then normally be in the form of a money transfer to the player’s bank account, which would be done for security reasons, as such high amounts are usually not paid out in cash. The money transfer would be subject to strict conditions and reporting rules.
Furthermore, if a patron were to request such a confirmation of winnings in a licensed casino in Europe, this would immediately raise the alarm for casino staff. The case would then automatically be reviewed, and the person who had requested such a confirmation would be checked and if necessary a suspicious transaction report filed with the authorities. This would result in substantial exposure for the criminal involved.
Furthermore, the scenario suggests that the launderer converts cash into chips and then almost immediately back into cash whereby the full initial amount of cash was laundered without even having to gamble. This scenario, where large amounts of cash are exchanged and no gambling takes place would be extremely suspicious and considered a risk factor in the anti-money laundering processes of licensed land-based casinos and would be followed up by an investigation and if required the filing of a suspicious transaction report.
“In the third phase of laundering, the launderer can buy a casino. Casinos are a highly cash intensive business. The launderer can own a casino and claim that the large amounts of cash held are profits from the casino.”
Concerning the described risk of infiltration of ownership of casino operations by criminals wanting to launder money, the national licensing systems in Europe guarantee that the ownership (and any change in ownership) is according to national laws and regulations. These arrangements are laid down in the national laws and regulations in every EU Member State. These measures include strong and serious fit-and-proper checks by the national regulatory authorities, as well as checks concerning the origin of the funds involved and vetting of operators, key staff and high-ranking employees at licensed casino operations. All these measures have been implemented by EU member states to successfully eliminate the scenario described in the statement.
In summarising the above, the ECA would like to state that to its knowledge there is no proven evidence of properly licensed casinos in the EU successfully being exploited for money laundering.
About the ECA
The ECA represents land-based casino operations that are licensed under the laws and regulations of the countries in which they operate. The ECA represents the interests of around 900 casino operations from 26 European countries, including Switzerland, Serbia, Montenegro and San Marino and directly employs around 70,000 people.
For more information please contact:
Hermann Pamminger, ECA Press Coordinator (info@) europeancasinoassociation.org