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The prevention of money laundering and combating the financing of terrorism

Customer risk

2.21 Determining the potential money laundering and terrorist financing risks posed by a customer, or category of customers, is critical to the development and implementation of an overall risk-based framework. Based on its own criteria, a casino should seek to determine whether a particular customer poses a higher risk and the potential impact of any mitigating factors on that assessment. Application of risk variables may mitigate or exacerbate the risk assessment. Categories of customers whose activities may indicate a higher risk include:

  • customers who are PEPs, family members of PEPs or known close associates of PEPs
  • high spenders – the level of spending which will be considered to be high for an individual customer will vary among casino operators, and among casinos managed by the same operator
  • disproportionate spenders – casino operators should obtain information about customers’ financial resources so that they can determine whether customers’ spending is proportionate to their income or wealth
  • casual customers – this includes tourists, participants in junkets and local customers who are infrequent visitors
  • regular customers with changing or unusual spending patterns
  • improper use of third parties – criminals may use third parties or agents to avoid CDD undertaken at the threshold or to buy chips, or they may be used to gamble so as to break up large amounts of cash
  • junkets – junkets can pose several higher risks, including criminal control of the junket operator or participants, the movement of funds across borders which obscures the source and ownership of the money gambled by participants and their identities, and structuring, refining and currency exchange risks
  • multiple player accounts – some customers will open multiple player accounts under different names to hide their spending levels or to avoid breaching the CDD threshold
  • unknown or anonymous customers – these customers may purchase large amounts of chips with cash at casino tables, and then redeem the chips for large denomination notes after minimal or no play.

Next chapter: Transaction risk (including means of payment)