December 18, 2017

In this article, Jenner & Block Partners Reid J. Schar and Wade A. Thomson and Associate E.K. McWilliams examine the quickly emerging anti-money laundering (AML) risks involved with skill-based, competitive games.  After Nevada passed Senate Bill 9, which permits gambling that combines skill and chance, casinos have been revisiting their AML policies and procedures to mitigate this new risk of player collusion.

“Casinos should consider AML ‘red flags’ for collusion specific to skill-based games that would trigger the need to conduct enhanced due diligence, or even file a suspicious activity report, on a player,” the authors advise.

Signs of money laundering activity, the authors explain, include suspicious win/loss rates or a pattern of losses to the same group of players, new players making high-dollar bets on skill-based games, highly skilled players losing to new or low-rated players and unskilled known players beating skilled known players.

“Casinos should not underestimate the sophistication of fraudsters who have been using online video games to launder money for years and who will likely scheme to find ways to tamper with skill-based digital games on casino floors.”