In the Casino

Casinos and Profiling

If one were to analyze the energy and money invested in customer profiling, Casinos would be ranked as number one. Look at all the weapons a casino has at its disposal: Players Club Cards, Casino Credit, attached hotel rooms, valet parking, cameras everywhere, and then add facial recognition.

The biggest tool of deception is the Players Club Card. Most casinos encourage regular use of these cards, by patrons, in order to accumulate points, which give the player "free stuff." However, every time you present this card, that event is recorded in their monstrous database. Even if you do not present your Players Club Card when dining, purchasing show tickets, golf, or something in a retail shop, if such a purchase is made using a credit card, that information is captured!

Think about it. Considering the profit a casino takes in leads one to believe they must have the most state-of-the-art database, coupled with a tracking system to capture customer information. It's to the casinos benefit to gather information on your interests. That way if they are sponsoring a rodeo, they can sort the records in their database in several ways to identify the most likely customers who might be enticed to attend the event and play in the casino.

The reason for gathering this information is to enable the casino to determine what it must do to get the customer to come back to its property, gamble, and lose more money. Taking that marketing strategy, when a player has accumulated points on a Players Card, he feels obligated not to "let it go to waste." As a result, you have a subsequent visit. Send a customer an offer for a free room and there is a good chance you've got a return visitor. Throw in a free meal or two? The odds just increased. After all, the general mindset of the typical casino patron is, "why not take advantage of a free offer?"

Casino Credit

In one sentence: Don't do it! Take a look at a typical application for a credit line at a casino. After providing the casino with all that information, it goes into a database. We all know how secure databases are! Imagine a disgruntled employee who manages to keep a printed copy of a casino's database of all its premium players. Names, addresses, bank account numbers! It's an identity thief's dream!

Central Credit has provided services for the casino industry since the late 1950s. Recently acquired by Global Cash Access, in 1998, it has increased the services offered as well as its ability to invade an individual's personal privacy.

Global Cash Access is owned by Summit Partners, M&C International and Bank of America. Given this knowledge, consider that if you have a business relationship with any of these three co-owners, your information is even more easily available to Global Cash Access.

Global Cash Access boasts of their identity verification system, IDNox, in their battle against identity theft. In my opinion, identity verification systems of this nature actually lead to more of a risk of identity theft. The reasons: First, such systems require the patron to enter much more personal information into a computer-based ATM or kiosk. Where do you think that information goes? Second, you have surveillance cameras, which are focused on these machines. Knowing the capability of these high-tech cameras, do you really want to enter more personal information, which can be reviewed on tape by some low-paid surveillance technician? Finally, such systems require the patron to carry certain pieces of information on his person. This is always a risk, especially in a crowded casino environment.

Global Cash Access unveiled their Arriva credit card, tailored specifically for the casino industry. Rather than waiting on line or seeing a casino credit officer, the customer can go directly to an ATM machine in the casino to achieve the same result. While the intent is to provide lower service and interest charges for patrons who desire cash advances on their credit lines, it does not provide the protection against identity theft. This product is specifically geared to increase productivity and revenue for the casino industry by making it easier for patrons to borrow money, while on the casino premises. The casino also benefits from the marketing power of such a product. Since the patron can also use the card in the casino's hotels, restaurants, showrooms, and retail shops, detailed information is provided to the casino on your spending habits. This information is used for marketing purposes, to give you more incentive to patronize a casino. Sure, you can transfer points from this card to your comp account held with a member casino, but with all these perks you are giving the casino more and more information about yourself. Is it worth it in the long run?

The services offered by Global Cash Access also allows a casino's marketing department to be alerted whenever a player is withdrawing cash from one of its machines. Imagine that - you take your cash, turn around, and there is Mr. Smiles waiting to help you lose your money!

Casino Credit Services provides casinos with a dossier of all your recorded casino activities that have been reported to their agency. In some casino-hotels, when you check in, your name is run through a database, and the casino is alerted to the amount of credit for which you can be pre-approved. Bet you didn't know how invasive a simple process of getting a hotel room can be!

The marketing ability derived from the information stored in the databases of Global Cash Access is powerful: names, addresses, phone numbers, dates of birth, social security numbers, drivers license numbers, and spending habits, to name a few.

Cash Transaction Report (CTR)

In addition to banks and other financial institutions, federal law requires casinos to file a report on all currency transactions in excess of US$10,000 (or equivalent in other currencies). The purpose is to fight the ongoing battle against money laundering that is used to finance terrorist activities and drug trafficking. Casinos have historically been targets for this practice.

A casino is required to file a Currency Transaction Report ("CTR") to the IRS, identifying any customer who conducts a cash transaction or series of cash transactions totaling more than $10,000 in a gaming day. The CTR will detail the customer's name, address, date of birth, and social security number. If the customer is a regular player at the casino, he most likely has a Player Card with an account number. If this is the case, the casino should already have this information in their system. If not, the casino employee will ask the customer for a form of government identification. If the customer refuses to provide the requested information, he will no longer be permitted to engage in further cash transactions. In most cases, the customer will be barred from playing any casino games as well.

Notice how it is phrased "totaling more than $10,000 in a gaming day"? If you go to a table game and buy $5,000 in chips, then later in the day go to a different table and buy another $6,000 in chips, your total buy-ins are $11,000. The casino is therefore required to identify you, and if they do not already have the necessary information on file, will ask you to show a government-issued identification.

Officially, they are required by federal law to identify the customer exceeding the $10,000 mark. Therefore the casino gaming staff tracks your cash buy-ins and will attempt to identify you early on. Some casinos have specific thresholds where they will not allow any further buy-ins for an unidentified player. It could be $5,000, $7,000, or any such amount. Here is the important distinction: It is federal law to report a cash transaction exceeding $10,000. If you attempt to cash in $10,001 in chips, the casino cannot legally give you the cash unless they have information (obtained from a government ID) on file. The same goes for buying in for chips with cash at a table. To protect itself, a casino will make efforts to identify you prior to hitting the $10,000 mark. However, this requirement is solely dictated by internal casino procedures and not by federal law. Keep in mind that if the casino asks for your ID and you refuse, they will keep very close tabs on your cumulative cash transactions during that day. They should do this because if they miss someone going over $10,000, they are subject to hefty fines.

It is not uncommon, if you are playing at a table where you bought in for $9,000 and then had a bad run, to ask to buy in for another $3,000. You will be asked for your ID. If you refuse, the casino is within its legal rights to refuse to allow that additional buy in.

A simple way to view this is:

An ID request resulting from cash exceeding $10,000 = Federal Law

An ID request resulting from cash less than $10,000 = Internal Casino Policy

We also need to address the term gaming day, which can differ among casinos. A gaming day (or designated 24-hour period) could be from 12:00 midnight until 11:59 p.m. in one casino, while it may be 7:00 a.m. until 6:59 a.m. in another. Most customers will not have knowledge of what constitutes the casino's gaming day.

When cashing out chips at the casino cage, the same rules apply. Keep in mind that it can be perfectly legitimate to cash out different amounts at different times and exceed $10,000. However, doing so will require the cashier to identify you, as he must follow the law and file a CTR. Do not under any circumstances perform multiple cash outs as a deliberate attempt to avoid a CTR. This is a crime called structuring, and you can be arrested. And, if you are in a casino with a spouse, relative or friend, you legally cannot break down your chips and have that person cash out for you. That could be considered a form of structuring.

In order to abide by the law, casinos have a legitimate reason to identify a customer conducting cash transactions over $10,000. To protect themselves from a slip-up, they implement specific procedures to identify a player once a certain threshold is reached. However, that threshold is an internal casino procedure, not the law.

If your usual gaming activities exceed $10,000 you will be subject to the above regulations. If you keep your cash activity under $10,000, you are not legally required to provide the casino with your personal information, but understand that your refusal to comply with the casino's request might prompt them to take other actions (see below).

Suspicious Activity Report (SAR)

Financial Institutions are required by federal regulations to file an SAR when they suspect that a violation of federal criminal law or regulation is being committed or attempted and involves the money being transacted. Guess what? Casinos are required to comply with this regulation as well. Given the vagueness of the requirements, anyone can be subject to such reporting. The actual dollar amount that warrants an SAR filing is also vague. I've heard that banks use a $5,000 benchmark, where casinos have been known to use $3,000. Remember how a cash transaction in excess of $10,000 requires a CTR filing? The $10,000 number can rate you both a CTR and an SAR if someone finds you suspicious!

You are in the blind when such filings are made. The Bank Secrecy Act forbids a person filing an SAR to inform the patron that it has been so filed. However, there are two factors where a patron is protected by this same Bank Secrecy Act:

1. The filing institution is prohibited from disclosing to other institutions that an SAR has been filed on a patron. In the casino business, patrons frequently move from casino to casino while playing. A player may even bring chips from the prior casino to cash in a second casino. It is not uncommon for a casino to call another casino to inquire about a suspicious patron. If this occurs, and a casino reveals to another casino that an SAR was filed for the patron, that casino is in violation of the Bank Secrecy Act. Quite serious!
2. The filing institution is not permitted to inform law enforcement authorities that an SAR was filed on a patron. Let's take a situation where you are detained by casino security. Local police enter the scene. If a casino employee informs the police that they filed an SAR on the player, the casino is in violation of the Bank Secrecy Act.

Financial institutions have a "better safe than sorry" mentality on this issue. They
fall under the protection of the Safe Harbor Provision, where they are granted immunity for any consequences of such transaction, provided they filed an SAR.

The regulations as outlined under the Bank Secrecy Act clearly define a currency transaction as the actual physical exchange of currency between two parties. When you go to a casino gaming table and place $5,000 cash down in exchange for chips, that is a physical exchange of currency. After that initial $5,000 buy-in, you are using casino chips to play. Let's say you win $12,000 and leave the table with a total of $17,000 in chips. That is not an additional physical exchange of currency. It only becomes such a defined exchange when you go to the cashier and exchange those chips for actual cash.

Financial Crimes Enforcement Network (FinCen) of the U.S. Department of Treasury spearheads the efforts of all the law enforcement agencies, among others to fight the issues of money laundering. Under the governments Code of Federal Regulations (CFR), Title 31 outlines those applicable to the U.S. Department of Treasury. Within these regulations, we are discussing three:

1. 31 CFR 103.21: Reports by casinos of suspicious transactions.
2. 31 CFR 103.22: Reports of transactions in currency.
3. 31.CFR 103.28: Identification required.

Honing in on the regulation for identification required, this is where casinos are attempting to gain the upper hand by misinforming their patrons. The regulation clearly outlines the requirement for identification (government ID and social security number) for the sole purpose of filing a Report of transactions in currency. Such a report is required to be filed for currency transactions, single or multiple, exceeding $10,000.00. In fairness to casinos, they encounter players who engage in multiple cash exchanges throughout a 24-hour period and it is difficult to keep track as to whether the patron has exceeded the $10,000.00 threshold. For that purpose, most maintain Multiple Transaction Logs, where they will either have the patron's Player Card number, or in absence of that, a physical description of the patron. At that point, it is not a legal requirement to obtain the patron's official identification. The attempts made by the casino to do so are an anticipatory effort dictated by internal procedures. The tricky part is that if you do not wish to comply with the request, the casino may not permit any further currency exchanges with you. Even though you may have not approached the $10,000.00 mark, the casino can implement this as their internal policy to protect itself.

A casino is required to file an SAR if the transaction is at least $5,000 (this may have been changed to $3,000) and the casino has knowledge of or suspects that the currency involved in the exchange is related to an illegal activity. This is a very dangerous area because of its vagueness, making much subject to opinion rather than verifiable facts.