The BSA/AML Gaming Conference September 15–17 at Planet Hollywood Resort & Casino in Las Vegas might seem like another of the seemingly endless gatherings in the gaming space.
But Kinectfy CEO and Founder Joseph Martin thinks it is one of the most important dates on the gaming industry calendar.
“I think there’s no more important time for AML professional regulators and law enforcement and industry leaders to share what they’re seeing and collectively consider the threats confronting our industry,” Martin says. “I think we’re at this pivotal moment in the industry’s history.”
Martin says the industry is facing another existential menace comparable to when organized crime was associated with industry. But instead of threat being from within the United States, it is foreign actors – particularly the Chinese – who are trying to infiltrate the gaming industry through money laundering.
“The industry and its regulators, particularly in Nevada, waged an enormously successful campaign to remove traditional organized crime from regulated gaming,” Martin says. “And the regulatory structure that emerged from that period of time, it helped establish the legitimacy and the integrity that allowed this industry to grow into what it is today.
“And for decades that model has served us extremely well, but the threat landscape, it’s changed again. And across the world we’re seeing significant AML enforcement actions involving gaming. At the same time, regulators, law enforcement, and the industry are confronting a new organized crime reality, an organized crime reality that’s global, that’s networked, and that’s extraordinarily sophisticated.”
Chinese money laundering works like this: Because Chinese citizens face significant restrictions on how much money they can move outside of the country, they are coming to foreign countries engaging transnational criminal organizations, particularly drug trafficking organizations and cartels that have accumulated large sums of money that needs to be moved.
“Professional money laundering networks, or the brokers, they’re transferring funds from the illicit folks that need to move it to the folks that need access to these funds,” Martin says.
“It doesn’t need to be a physical dollar is being shipped across national borders anymore,” Martin adds. “And the thing that’s powerful about this, and the reason why you’re seeing this in these enforcement actions all over the world, it’s this global network, this global pattern, and it is because it’s incredibly cheap for them to get access and to move these funds incredibly quickly, cheaply, and globally.”
FinCEN, the U.S. Treasury’s financial‑intelligence and anti‑money‑laundering agency, estimates there have been more than 137,000 BSA (Bank Secrecy Act) reports representing $312 billion between 2020 and 2024.
“You see many countries expanding the scope of AML regulations to multiple businesses, multiple different verticals,” Martin says. “So, this isn’t gaming is bad, and this is not a message that the gaming in industry is any more exposed than any other industry.
“This message is that the gaming industry has a role to play to protect the integrity of the U.S. financial system, and that where the threat used to be organized crime, the threat used to be localized. We were extraordinarily good on a state-by-state basis through gaming commissions and control boards fighting and eradicating that localized threat.
“Now it’s global and it’s networked and sophisticated, and the question is, ‘what is the response?’ ”
Martin says the reaction to AML should be patterned on how the gaming industry approached organized crime. He noted that commercial and tribal operators are aware of AML threats and are actively looking for ways to combat them.
“Our regulatory framework across the industry was really designed around who owns and operates the casino, casino licensing,” Martin says, “and all of that came into play, and that’s the regulatory framework. Now it’s who is using the casino services, and who are they connected to, which is fundamentally a different problem And I think the biggest challenge we have with this shift in this threat landscape around the world, if I could summarize it in one word, would be visibility.
“Because if criminal networks are connected and they’re global and they’re sophisticated and networked, is our industry? Is our data networked? Are we able to have visibility of patterns and trends? Because one casino just sees one customer, and another casino just sees another transaction, and a bank sees another piece, and a state regulator sees maybe some visibility within its own jurisdiction, and a federal agency receives regulatory reports, so everyone can be doing their job and still only see a relatively small piece of the larger picture.”
