Know your customer (KYC) is the process used by a business, for our purposes a bank regulator, to verify the identity of its clients. The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Banks, in turn, must make efforts to identify its clients in order to ensure the flow of funds through accounts are for lawful purposes and can be traced to a legitimate source.
Casinos, one of many banking clients, are no exception. The difficulty lies in the fact that casinos, themselves, act as a quasi-bank – allowing its clients (casino patrons) to deposit and withdraw funds. Some suggest an issue arises when those large scale deposits into casino accounts are made anonymously or through a secret corporation acting on behalf of a casino patron, and the funds represent criminal proceeds.
Should there be limits to the extent in which banks should “know their customer’s customer,” or can they turn a blind eye so long as its client, the casino, continues to represent itself as a reputable business partner in hopes they are doing their job to ensure regulatory compliance?
DISCLAIMER: The views expressed herein are solely in a private capacity and do not, in any way, represent the views of any entity of the U.S. Government, Read our full Disclaimer for more information.
Counterpoint™ is a shared on-line journal covering current news and opinion analysis; specifically, developments relating to law¹ , philosophy, politics, and other social sciences.
Listen to the Counterpoint™ Podcast
¹ Materials are for informational purposes only and may not reflect the most current legal developments. Contact a lawyer licensed in your jurisdiction for advice on a specific legal issue. Read our full Disclaimer for more information.