U.S. Treasury seeks to guard against illegal sports wagers

[December 23, 2014]  By Brett Wolf
 
 (Reuters) - The U.S. Treasury Department's anti-money laundering unit may soon ask casinos to be on the lookout for illegal sports wagers flowing into the U.S. financial system, according to two sources familiar with the matter.

The goal is to stifle illegal sports bets that cause billions of dollars in funds, much of it with unknown origins, to move through the U.S. banking system, according to the sources, who spoke on condition of anonymity because they are not authorized to discuss the matter publicly.

Guidance from Treasury's Financial Crimes Enforcement Network (FinCEN) is expected to highlight for casinos "red flags" signaling possible illicit sports betting activity so it can be reported to authorities. One example might be unusually large wagers, a sign that bets are being pooled, said one of the sources.

The Internal Revenue Service's criminal investigation division has been focused on the money laundering risks associated with illegal sports betting, both domestic and offshore.

Authorities are concerned that some of the money involved in these transactions could be linked to corruption and other nefarious activity, the sources said.

In June, IRS special agents speaking at a Las Vegas conference discussed a recent probe linked to Costa Rica and warned of a crackdown on U.S. casinos that allow illegal sports book operations around the world, including online outfits, to balance their bets by placing casino wagers.

The agents told the audience the volume of illicit gambling funds pumped through casinos by criminal bookmakers has grown to tens of billions of dollars per year and exceeds even the sums laundered by narcotics traffickers.

The U.S. Treasury Department and Justice Department have increased pressure on casinos to comply with anti-money laundering laws and regulations.

The enforcement push began in August 2013 when Las Vegas Sands Corp agreed to pay $47 million to settle with the Justice Department over anti-money laundering failures. Two months later, Caesars Entertainment Corp disclosed that FinCEN was investigating a subsidiary, Desert Palace Inc, over such lapses.

There are signs the pressure will only increase. The IRS, responsible for auditing casinos' anti-money laundering compliance programs, has begun training additional examiners, one of the sources said.

Spokesmen for FinCEN and the IRS criminal investigation unit declined comment.

(Reporting by Brett Wolf)

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