CONFRONTING TODAY S REALITIES IN THE GAMING INDUSTRY

Transcription

1 CONFRONTING TODAY S REALITIES IN THE GAMING INDUSTRY PRESENTER: BRIAN GEORGE, CHAIRMAN, JAMAICA GAMING ASSOCIATION (JGA) BETTING GAMING & LOTTERIES COMMISSION (BGLC) SUMMIT - SEPTEMBER 22, 2016

2 THE DEVELOPMENT OF THE INDUSTRY: FROM THE DAYS OF BUGSY SIEGEL Bugsy Siegel - A driving force behind the development of the Las Vegas Strip AND one of the most infamous and feared gangsters of his day. He built an untouchable empire, utterly devoid of a compliance and regulatory framework. Now, the Nevada Gaming Commission is perhaps the strictest that exists

3 .TO JA TODAY - INDUSTRY OVERVIEW An industry governed by strict compliance guidelines and measures having adopted the Gaming Commission s Fit and Proper Procedures. However, too many gaps still remain Some $57B in sales generated from 26 gaming lounges; declared gross profit of $3.423B Approximately 6,000 gaming machines Total Government Revenue approximately $65M *Source BGLC Annual Report

4 A CHANGING INDUSTRY: CFTAF APPLICATION AND IMPLICATIONS CFATF - regional intergovernmental body established in 1992, responsible for ensuring that standards relating to anti-money laundering and countering the financing of terrorism ( AML/CFT ) are implemented and maintained across the Caribbean and Central American region; didn t initially apply to gaming but to banking; gaming industry didn t play close attention to the realities Establishment/Enforcement of Minimum Standards in April 2016: that all appropriate steps regarding knowledge of developments in money laundering; staff training; adoption of anti-money laundering and terrorist financing policies; application of appropriate customer due diligence; report those who engage in suspicious activities to the Financial Investigation Division (FID). Business compliance based off meeting minimum standards, the BGLC Anti-Money Laundering Guidance Notes and the provisions of the Proceeds of Crime (Money Laundering Prevention) Regulations, 2007.

5 CORRESPONDENT BANKING AND DEBANKING Effective April 2016, gamers have had to properly identify themselves names, proper ID, references - before they can gamble, same measures used when joining a bank. Main issue we now face: Correspondent banking and the threat of de-banking Correspondent banks domiciled in the United States and the UK applying restrictions to regional markets (particularly in the Caribbean and Central America) due to high risk and resultant high penalties Current situation : Banks have already started to curtail involvement in our industry because our risk profile is seemingly too great; if we have no banking access, we have no industry

6 ROLE OF THE JAMAICA GAMING ASSOCIATION (JGA) Formed by the seven largest gaming lounge operations in Jamaica to work with the Betting Gaming & Lotteries Commission (BGLC) towards practical implementation and oversight of new policies geared towards the enhancement of the integrity of the industry, particularly in the areas of Anti Money Laundering (AML) and the requirements under the Proceeds of Crime Act (POCA) ; To provide a platform for all operators in the Gaming Industry to have a coordinated voice on matters affecting the industry; To work with relevant bodies such as RISE Life Management Services to ensure the widest implementation of Responsible Gaming Principles and Practices, and identifying and promoting policies which can stimulate the long-term growth, innovation and reinvestment in the industry by its members.

7 MULTI-STAKEHOLDER APPROACH ALL HANDS ON DECK! Avoiding de-banking requires a multi-stakeholder approach. COMPLIANCE IS NOT ONLY AN ISSUE FOR THE JGA AND GAMING ENTITIES; STRICT ENFORCEMENT BY REGULATORS IS CRITICAL While gaming entities are responsible for ensuring that their businesses are not used by criminals to launder the proceeds of their crimes, the BGLC has the ultimate responsibility to enforce regulations and act to weed out non-compliant players with alacrity. This is critical for the industry s survival. There is no value in issuing a licence to an entity who is unbankable in its own jurisdiction. Government needs stronger push (back) on international platforms, including the Financial Action Task Force (FATF), to highlight the danger to regional economies posed by de-banking

8 WAY FORWARD Zero tolerance approach to non-compliance Greater Collaboration and Learning from Each Other More training and dialogue between stakeholders to take further steps to bridge gaps in compliance Continued training of those within the sector and information dissemination for sectoral development Compliance and Enforcement! Moving from KYC to KYCC Strong Government Lobby for an environment conducive to industry growth Local and Int l Banks evaluating on an ongoing basis. In the region, Jamaica can help itself by establishing high standards of compliance; only protection against being unbanked