AML Laws and Regulations for Casinos and the Gaming Sector in India

As a reporting entity, a casino must do the following. This article keeps each at the level required by law; a compliance requirements guide explains how to do each. Correspondent banking and wire-transfer duties are not included here because they do not apply to a casino.

• Register with FIU-IND. Enrol with the Financial Intelligence Unit of India on the FINnet 2.0 / FINGate 2.0 portal, so the casino can file its reports.
• Appoint officers. Appoint a Designated Director and a management-level Principal Officer under Rule 7 of the PMLR. The same person cannot hold both roles, and both are to be reported to FIU-IND.
• Conduct the internal risk assessment. Assess money laundering, terror financing and proliferation financing risk across patrons, games, delivery channels and geographies, giving weight to the cash-intensive nature of the floor, and keep it current.
• Document AML policy, controls and procedures. Adopt an approved policy that turns the risk assessment into the casino’s floor and cage operating procedures, drawing on any state casino guidelines such as the Goa guidelines.
• Customer identification and CDD. Identify and verify the patron and the beneficial owner (a controlling interest of more than 10 per cent for a company or partnership, and more than 15 per cent for an unincorporated association or body of individuals), with enhanced due diligence for politically exposed persons and high-risk patrons, under Section 11A of the PMLA, Rule 9 of the PMLR and the applicable state guidelines, at the buy-in, cash-out and other prescribed points.
• Ongoing monitoring and periodic updates. Monitor patron activity on an ongoing basis, watching for chip buying without play, minimal play cash-outs and structuring, and refresh KYC at least once every 2, 8 and 10 years for high, medium and low-risk patrons respectively. Review each patron’s risk categorisation at least once every six months and decide whether enhanced due diligence is required.
• Sanctions screening. Screen patrons and beneficial owners against the designated lists under Section 51A of the UAPA and Section 12A of the WMD Act and freeze and report any match. Verify the relevant UNSC and domestic designated lists on a daily basis. This duty applies to every casino.
• Regulatory reporting. File cash transaction reports for cash of more than Rupees 10 lakh and for connected cash transactions crossing that figure in a month, reports on cash transactions involving counterfeit currency, forged valuable security or forged documents, and suspicious transaction reports of any value, including attempted transactions, under Rule 3 and Rule 8 of the PMLR. Cash and counterfeit reports are filed monthly, by the 15th day of the succeeding month; a suspicious transaction report is filed promptly once the Principal Officer is satisfied that the transaction is suspicious, through FINnet 2.0.
• Record management, CKYCR and FINnet 2.0. Keep transaction records for five years from the date of the transaction and keep identity records and business correspondence for five years after the business relationship ends, under Section 12 of the PMLA. Upload patron KYC records to the Central KYC Records Registry under Rule 9A, and file all prescribed reports through FINnet 2.0.
• Training and awareness. Train floor, cage and surveillance staff by role to apply the controls and recognise the red flags of casino laundering.
• Independent testing and audit. Test the programme through internal audit, compliance assurance or independent review, and close every finding.