What is the value of your gaming licence? What would be the cost of losing it?
Answer . . . Your casino gaming license is invaluable. Your casino license allows you to operate your gaming facility and earn revenues. So, would you put this valuable asset in just any hands? A stranger’s hands? Probably not. But, that is essentially what casino managers do when they delegate responsibility for the company compliance program.
Gambling is legal under U.S. federal law, with significant restrictions relating to interstate and online gambling. Each state also has the freedom to regulate or prohibit gambling. In addition, a casino with gross annual gaming revenue over $1 million is considered a ‘financial institution’ under the Bank Secrecy Act which means they must comply with Anti Money Laundering (AML) regulations. The result is a long list of compliance requirements for your casino.
The compliance burden falls on your casino and is checked by auditors. Non-compliance could result in criminal or regulatory action and/or fines. In fact, compliance officers increasingly face personal consequences for company violations. In addition to both civil and criminal penalties, companies that have a history of violations and non-compliance may be unable to obtain new licenses or franchises.
“To fight money laundering effectively, an organization must have trained individuals at every level and provide those individuals with the proper resources and systems needed to carry out their compliance duties. Perhaps most importantly, compliance staff need support from the leaders of their organizations.”
Jamal El-Hindi, Acting Director of the Financial Crimes Enforcement Network (2016)
https://www.treasury.gov/connect/blog/Pages/Culture-of-Compliance-and-Casinos.aspx
This is why you, as the Casino Manager, should prioritize compliance among your casino’s objectives. It is a strategic imperative to ensure that your casino has a good program in place. A well-designed compliance program minimizes risk and can save your casino (and you personally) from disciplinary action, including revocation of your gaming license.
Creating your compliance program
A compliance program is simply a system of internal controls and policies combined with employee training to maintain ongoing compliance. Your program does not have to be complex nor burdensome. Creating a transparent organization is achievable. You can build your culture of compliance with 5 essential steps.
The five steps:
Identify regulations that apply to your casino.
Establish policies, procedures and budget for needed resources
Train staff.
Record interactions and progress.
Audit your program.
Example: Slot machine compliance
Slot machines are highly regulated and require documentation of all actions related to the machine from purchase to retirement. As a licensee your casino is responsible to ensure games are secure, tested, and configured properly. Your casino typically is required to maintain a log of maintenance related to the machine and any time the machine is opened. You must also record when the machine is being used for play, is moved, or is dormant. All of this information must be available to external auditors upon request.
Example: compliance program process:
- Identify – Slot machines are subject to the National Indian Gaming Commission MICS Compliance
(https://www.nigc.gov/compliance/internal-audit-mics-compliance) - Establish – policies and procedures
- Train – Having a good compliance program on paper isn’t enough. Your program is only as good as the application in your casino. In fact, actual practice and culture override written policies. So, it is important that the employees that will handle the day-to-day compliance of your program fully understand and are able to implement your policies.
- Record – Develop a method for tracking interactions with slot machines such as MEAL logs and inventory tracking lists.
- Audit – Regular independent internal auditing can provide checks and balances for your compliance program. Audits will also highlight where tools or training need adjustment. Best practices include testing by an independent third party for objective insight on the strength of your compliance program.
TECHNOLOGY’S ROLE IN COMPLIANCE
Banks have been early adopters of technology for compliance with AML and other regulations. Casinos have yet to fully take advantage of this time-saving compliance tool. Software can aggregate large amounts of information and organize it for analysis, audit and reporting.
Solution Technology: Volante Slottrak
Volante SlotTrak records the entire lifecycle of the slot machine in one multi-user format. The iOS system improves accuracy and reduces costly manual input. Audit reports are available on-demand. The Volante SlotTrak software allows compliance information to be shared across departments and organizations. Your organization can grant the Gaming Commission view access to your data rather than cumbersome audit appointments that consume up to 6 weeks of your staff time. An audit that typically would have taken 3-5 people up to three weeks can be reduced to just a few days.
End note:
The strategic success of the gaming operations is the responsibility of the gaming manager. While day-to-day operations can be delegated, it is up to you to set the direction for success.