Security Through Compliance

The Compliance Game

The protection afforded by compliance software is needed now more than ever

By Dave Bontempo

Pay friendly entities now, or unfriendly ones later.

Casino operators increasingly grasp this message regarding the pivotal gaming compliance sector. The era of colossal growth, numerous government regulations and the Covid-induced staff shortages has them chasing their own paperwork.

Operators see the need to catch it. Via due diligence and by hiring outside vendors, casinos suffer fewer high-profile incidents like The Big One. That was a $75 million fine levied against the Tinian Dynasty Resort and Casino in the Northern Mariana Islands for Bank Secrecy Act violations by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) in 2015.

Yet even the “lesser” violations (Atlantic City’s Trump Taj Mahal was fined $10 million for violations of the Bank Secrecy Act in 2015) can hurt an operator’s bottom line and reputation.

Casinos understand the importance of customer identification and verification, currency transaction reports, record-keeping, and the realization that Title 31 is serious business.

Fortunately for them, industry specialists can address the dilemma.

The VIP Shield

Company officials contacted by GGBstress how the casino gaming industry is one of the most regulated industries in the country. Operators must ensure state regulations are met along with those outlined on the federal level.

Of these, Title 31 of the Bank Secrecy Act includes a few considerations operators must meet pertaining to anti-money laundering (AML) regulations.

At a minimum, Title 31 requires every casino’s AML program to provide for all of the following:

• Internal controls (policies and procedures designed to assure compliance with Title 31 and the Bank Secrecy Act)

• Continuous training of casino employees, including identifying unusual and/or suspicious transactions

• Independent testing for compliance, the scope and frequency of which correlated with the specific casino’s money laundering and terrorist financing risks

• A compliance officer responsible for day-to-day compliance with Title 31 and the casino’s AML program

• Procedures for using all available information to determine, when required, the name, address, and Social Security Number (SSN) of a person, as well as to verify their identity

• Procedures for using computers to aid in assuring compliance if the casino has computerized systems

• Procedures for using all available information to determine any transactions or patterns of transactions required to be reported as suspicious

Global Payments Gaming Solutions’ VIP Shield is designed to help operators adhere to these standards. VIP Shield provides casinos with a new level of compliance assistance by automating anti-money laundering and IRS reporting processes, including multiple transaction log (MTL), negotiable instrument log (NIL), monetary instrument log (MIL), chip log transactions and suspicious activity reporting (SAR).

The configurable, web-based solution provides custom reporting to isolate risk potential while automating 90 percent of MTL transactions, empowering operators to focus on their patrons.

Company sales pitches encourage operators to stop manual compliance processes that jeopardize their business.

Accessible directly through Global Payments’ VIP LightSpeed platform, VIP Shield automatically flags transactions for necessary compliance actions and posts chip log entries as needed. The solution also executes SAR and incident reporting as needed.

VIP Shield is easy to use, and requires a minimal learning curve for cage staff. It is automated. A casino can focus on its guests and 90 percent of MTL transactions are pulled automatically.

The product is configurable, and can reduce the learning curve with custom verbiage, colors and alerts. It has a reports component, helpful to sharpen awareness and isolate risk potential, according to company officials.

Versatile Solutions

CasinoSoft software solutions help create a work-from-anywhere opportunity in an otherwise traditionally heavy paperwork-based role, partner Matt Montano indicates.

The compliance software and service sector provides a robust need for CasinoSoft products.

“Business has surpassed pre-pandemic levels. Normally that would be great news, and it is great news,” Montano asserts. “But the gaming industry and so many other industries found that people were not coming back as expected. Whether it was looking for a career change, or wanting to continue working remotely, people were not racing back to their old jobs.

“Casinos found themselves struggling to bring back employees and meet business demands at a time when customers are flocking back. Budgetary restraints and/or the scarcity of people coming back to their jobs or applying for open positions have contributed to just about every casino being short-staffed, even with a record customer count and related revenues.”

CasinoSoft tries to maximize employee productivity with its presence in this space. The company provides tools to help automate and simplify the compliance process.

Because paperwork is digitized with the company’s Automated Document Management module (ADM), it can be accessed right from a laptop once scanned. Auditors and compliance managers would be able to work remotely and process all required paperwork and reports.

With each document being bar-coded, ADM will automatically sort and file the paperwork in the designated folder and account. This will save casinos invaluable time and money, Montano asserts.

The product has been in development for over a year.

“Observing how many casinos were processing hundreds of documents by hand on a daily basis spawned the idea of creating a solution to streamline and reduce the time spent on this process,” Montano says.

“By reducing the amount of time it takes to prep, sort and file the paperwork, it also reduced the time it takes to audit the paperwork since everything is bar-coded and automatically sorted and filed in the appropriate location and accounts. Our ADM module works hand in hand with our Title 31 and Taxforms modules, and continues to make the overall compliance tracking and reporting process better and better.”

The product is shockingly simple to use, according to Montano. It takes all the documents generated by the company’s Title 31 and Taxforms module and allows them to be scanned in bulk on a Fujitsu high-speed network scanner.

“Each document has bar codes assigned so the system can analyze the bar codes and know exactly where to send and save the document in the right location,” Montano says. “No pre-sorting is required. We assign the few buttons on the scanner a designated location to send documents or slips to.

“One staff member can simply grab all accumulated paperwork for the shift or end of day and drop in the scanner, select the right button and hit send. W-9s, W-2Gs, 1099s, and any other tax documents or slips can all be scanned and filed in about five seconds.”

Montano touts the product’s game-changing dynamic.

“From an IT perspective, all the scanners are driverless and networkdriven, and do not have to be connected to a PC for control,” he asserts. “After the initial setup, the small scanner can be placed just about anywhere and fully controlled and configured at the server level. This saves IT countless annual hours troubleshooting and debugging driver config issues at the workstation level.”

Montano adds that the system also is a great space-saver for behind the cage or casino closets.

“Some customers such as Superbook Sports and Treasure Island are already using our Automated Document Management module and pleasantly surprised on how easy it is to use,” Montano asserts.

“They are saving much time now and no longer need to manually process paperwork.”

The Casino Edge

Compliance and technology services have become increasingly significant for Wipfli, which advises companies in this sector. As a firm of more than 3,000 associates and 70 dedicated directly to the tribal gaming industry, it helps clients with an array of services. This includes everything from a simple audit and American Rescue Plan Act strategy to implementing a new CRM system such as Salesforce, or a new cloud-based accounting system.

“The U.S. gaming industry is one of the most heavily regulated industries in the country with regulations from states, local gaming authorities and at the federal level,” says Grant Eve, company partner. “To keep at the forefront of compliance, casinos need to continue to invest in education and the compliance departments. A lot of the time, casinos’ internal practices go beyond legal requirements, and that will be beneficial as regulations begin to change.”

Eve indicates that Wipfli has learned to operate remotely and quickly, whether it comes to audit, Title 31/AML compliance, training, or implementing new systems.

“Our technology team has been busy with the shift to digital, as customers have rapidly wanted to shift systems to the cloud and implement customized ERP systems at a rapid pace which the industry has never seen before,” he says.

In the compliance realm, Eve says that Wipfli’s CasinoEdge powered by Intacct is the industry’s leading accounting financial management software. The product has been associated with an exponential increase in demand with a high sense of urgency, allowing employees to work remotely in a safe and secure environment.

CasinoEdge has seen an exponential increase in demand since the Covid19 pandemic began.

CasinoEdge Intacct has been recognized as an innovative game-changer in the casino landscape, Eve says. He encourages clients to use the Wipfli team to:

• Leverage real-time, department-level dashboards that deliver daily flash reports. CasinoEdge Intacct auto-compiles data from front-of-the-house solutions, including tables, slots and food and beverage, with mapping and posting of daily bank activity.

• Streamline revenue audit via enhanced process automation. • Automate processes such as electronic procurement. CasinoEdge Intacct streamlines procurement processes by up to 90 percent, enabling full digital document management and the ability to make electronic purchases and approvals from any mobile device.

• Eliminate IT maintenance. CasinoEdge Intacct is built in the cloud with automatic updates. No hardware upgrades.

• Enjoy seamless, multi-entity management. CasinoEdge Intacct delivers easy, cost-effective reporting against data sets and across any combination of properties. Start go-live projects in as little as 90 days.

• Eliminate email. With CasinoEdge Intacct, the audit trail and communications are housed in the accounting system.

• Help minimize fraud and create audit-ready financials using role-based controls.

The compliance need gains additional importance with the proliferation of legalized sports betting. Changes occur practically at the speed of sound. “We are seeing sports betting continue to be the fastest growing sector in gaming with the American Gaming Association reporting sports betting revenue of $1.85B in the first six months of 2021,” Eve says.

“When there is exponential growth in any industry, compliance usually lags behind as it tries to decipher where the risks are and how the operations work. With sports betting, the regulators need to have a good understanding of how the sportsbook is structured to understand where risks lie.”

The typical operating models of sportsbooks include outsourcing 100 percent of the function to an outside provider, the casino operating its own sportsbook, or a hybrid approach which seems to be the most common, he says. With each model, the regulators should understand the infrastructure and operations to ensure they are approaching compliance properly and in an educated manner to ensure they are expending their resources to create the most value.

Training for Success

Compliance effectiveness starts at the top, a spokesman for Vector Solutions says in a report compiled for GGB.

The commitment to compliance starts with prioritizing it among the property’s objectives, policies and procedures, the spokesman says. This should be implemented through employee training, AML program monitoring and enforcement.

AML training programs are not a “one size fits all,” the report says. Building a strong and robust training program should consider the size of the property, the roles and responsibilities of each employee and the method of communication for the required training, the company indicates. The assigned training courses should be completed on a recurring basis to ensure employees understand compliance fundamentals and changes to the gaming laws and regulations.

Self-reporting demonstrates to FinCEN that the property is committed to building a culture of compliance as reporting of completed training is required for all employees, the source continues. Manual reporting can take a multi-person team to keep track and depends on the coordination and cooperation between various departments within the property.

Vector Solutions has an online solution. The company designed training to range from required compliance content to professional roadmaps for frontline and executive team members.

“Our course catalog includes a Title 31 Suite for employee training,” the official indicates. “Our Title 31 Suite training courses are regularly updated to comply with federal training requirements.

“Vector Solutions for Casinos has been in the industry for over 10 years, as a leading Saas provider for online Title 31 and anti-money laundering training, helping clients meet federal mandates for reporting certain currency transactions to uncover money laundering and other financial crimes,” the spokesman adds.

The company has built a comprehensive gaming-specific course catalog containing nearly 150 online training courses from Customer Loyalty to Safety, Leadership Training and more, all hosted in the powerful Learning Management system, Vector LMS (formerly CELEXA, a Casino Essentials brand).

Vector Solutions serves more than 350 casinos nationwide. Vector LMS for Casinos is used by Boyd Gaming, Jack Entertainment, Bally’s Corporation, Four Winds Casinos, Wind Creek Hospitality, Desert Diamond Casinos, Muscogee Creek Nation Casinos, Delaware North Casinos and Foxwoods Resort Casino, the official says.

Throughout the industry, vendors have found a sweet spot. Their programs help casinos maintain records for government agencies. As a side benefit, the casinos organize these records for themselves.