With heightened federal scrutiny and emerging gaming formats pushing boundaries, casino compliance teams face a rapidly shifting landscape. In a recent TG&H webinar sponsored by Vector Solutions, industry veterans Jim Dowling and Brian Lopez of the Dowling Advisory Group and the BSA-AML Compliance Group unpacked two urgent themes: the federal government’s sharpened focus on source of funds enforcement and the growing risks posed by unregulated gaming models.
Moderated by Lauren Melcher, Sector Manager at Vector Solutions, the session pulled back the curtain on how regulators are reshaping expectations and why compliance leaders must respond now.
Enforcement in focus: Why source of funds is under the microscope
Recent enforcement actions against Wynn and Resorts World were more than just headlines — they revealed a strategic shift in how federal authorities are prosecuting gaming compliance lapses.
“These weren’t led by FinCEN,” explained Jim Dowling. “These were federal criminal cases, prosecuted out of the U.S. Attorney’s Offices in LA and San Diego, with involvement from IRS Criminal Investigations. And that’s a big deal.”
In one case, prosecutors uncovered illegal gambling money funneled into Las Vegas casinos, resulting in 15 convictions, including operators, illegal gamblers, and even accounting professionals.
But what made this enforcement unique? Nevada’s Gaming Control Board didn’t fine casinos for traditional AML failures, such as missing SARs. Instead, they penalized properties for violating their own internal policies and procedures.
“It’s no longer just about whether you filed a CTR or SAR,” said Dowling. “It’s about whether you followed your own rules, and that opens a new door for regulators.”
Compliance implication
Operators must ensure their internal AML policies are not only robust but rigorously followed. Regulators are watching — and acting — when there’s daylight between policy and practice.
Source of funds: Beyond the basics
Jim Dowling emphasized that the days of accepting large sums of cash without verification are over.
“The days of accepting large sums of cash without knowing where it came from are over. Operators must verify not just if someone is wealthy enough to gamble but where that cash is coming from.”
Brian Lopez added that regulators are now looking beneath the surface:
“It’s not about new rules; it’s about how closely law enforcement is now inspecting whether you’re actually following them. Surface-level due diligence isn’t cutting it.”
Top recommendations from the panelists:
- Update and test your risk assessment annually or more often.
- Use investigative tools and open-source intel.
- Document all steps in due diligence and investigations.
- Train frontline staff and hosts to detect red flags.
- Use questionnaires to assess the source of funds for high-value patrons.
- Engage in robust independent testing to identify weak spots.
The rise of unregulated gaming models: The AML wild west
Formats such as event contracts, sweepstakes, and skill-based games operate in legal gray areas, often designed to avoid regulation.
“They’re skirting regulation by offering things like free entries or pretending to be skill-based,” said Lopez. “But they behave like gambling, and the AML implications are huge.”
Key risks include:
- No licensing or oversight
- No KYC or AML obligations
- High anonymity and transaction opacity
- Use of cryptocurrency and third-party processors
What should operators do now?
Jim Dowling emphasized the importance of leadership in compliance:
“You can have a great program, but if leadership isn’t reinforcing it and if hosts are not on board, it’s just paper.”
Recommendations from the panelists include:
- Review enforcement cases to understand trends.
Carefully read both federal and state enforcement actions. Identify common failure points, such as ignored source of funds, red flags, or inconsistent policy enforcement. Use these examples as discussion points with leadership.
- Educate leadership and patron-facing staff.
Don’t assume your host teams or executives know the details of recent cases. Host briefings, send compliance newsletters, and use real examples to connect AML issues with business impacts.
- Reassess procedures for handling high-risk patrons.
Evaluate how high-risk patrons are flagged, investigated, and documented. Consider tools like risk scoring, mandatory questionnaires, or third-party data validation.
- Prepare for increased law enforcement involvement.
Anticipate subpoenas and requests for documentation. Standardize how you archive investigation records. Partner with legal and IT teams now to avoid panic later.
- Revisit your training and independent testing programs.
Ensure training goes beyond checklists. Test your team’s judgment in realistic scenarios. Make independent testing part of your program’s DNA, not just an annual requirement.
