Rad­hi­ca Sookraj

A large amount of liq­uid cash float­ing in the econ­o­my is lur­ing busi­ness­men from East­ern Eu­rope to set up pri­vate mem­bers' clubs in T&T.Many be­lieve poor en­force­ment of reg­u­la­to­ry con­trols with­in the gam­ing in­dus­try has caused the East­ern Eu­ro­pean casi­no chain to spread its op­er­a­tions.

Stip­u­la­tions out­lined by the Fi­nan­cial In­tel­li­gence Unit (FIU) are aimed at reg­u­lat­ing the gam­ing in­dus­try. T&T has over 72 pri­vate mem­bers' clubs in­clud­ing those from East­ern Eu­rope, all of which are reg­u­lat­ed by the FIU, but there are no reg­is­tered casi­nos as this is not per­mit­ted by law.

How­ev­er, ex­pert in the field of ex­tra­di­tion and mon­ey laun­der­ing laws, at­tor­ney David West said the Gam­bling and Bet­ting Act 22 (1963) is out­dat­ed and the Pro­ceeds of Crime Act (2009) has nev­er been used to charge any­one ac­cused of sus­pi­cious fi­nan­cial trans­ac­tions in pri­vate mem­bers' clubs.

One of the East­ern Eu­ro­pean clubs, Trinidad Club Princess, has been open on In­de­pen­dence Square, Port-of-Spain, since 2006. Club Princess was named in a law­suit against at­tor­ney Christlyn Moore be­fore she be­came Jus­tice Min­is­ter.

The court case in­volved a dis­pute over the share­hold­ing of Forty Four Ltd and Club Princess Ltd. At the time, Moore was act­ing as cor­po­rate sec­re­tary for two com­pa­nies, Dal­las Corp and Al­nan­do Cor­po­ra­tion. In the case, Moore and two Turk­ish busi­ness­men Su­di Ozkan and Zafer Hakan Un­al were ac­cused of op­pres­sive and un­law­ful con­duct to­wards Amer­i­can busi­ness­man Thomas Bak­er.

At­tor­ney: Re­vamp the law

There was no list­ing of Forty Four Ltd or Al­nan­do Cor­po­ra­tion in T&T's reg­is­tered list of pri­vate clubs, but West said there are about five East Eu­ro­pean casi­nos in Trinidad."I sus­pect they did their mar­ket re­search and found out that T&T has a lot of liq­uid cash, and casi­nos are a good busi­ness. Right now, we need a prop­er act and prop­er leg­is­la­tion to reg­u­late these in­dus­tries," West said.He feels the time has come for a com­plete re­vamp­ing of the law.

"Un­der the Gam­bling and Bet­ting Act, you can­not po­lice the in­dus­try with to­day's mod­ern tech­nol­o­gy. It is out­dat­ed and must be re­vamped," West said.He said the five casi­nos from East­ern Eu­rope have been func­tion­ing on their own and have no part­ner­ships with oth­er pri­vate mem­bers clubs.West not­ed that un­der the Pro­ceeds of Crime Act, the FIU has the pow­er to ex­er­cise su­per­vi­so­ry au­thor­i­ty on the casi­nos. He al­so said that the casi­no op­er­a­tors are man­dat­ed by law to re­port any sus­pi­cious ac­tiv­i­ties.

"This act al­lows the FIU to over­look the run­ning of any casi­no. I know that they have com­pli­ance pro­grammes and out­reach ses­sions. The Fi­nan­cial Ac­tion Task force al­so has the pow­er to deal with casi­nos."Rec­om­men­da­tion 22 states that the FIU will be the su­per­vi­so­ry au­thor­i­ty for the casi­no," West said.He al­so added that the Pro­ceeds of Crime Act stip­u­lates due dili­gence and record-keep­ing re­quire­ments at casi­nos. Any trans­ac­tion ex­ceed­ing $95,000 has to be re­port­ed to the FIU.

West said casi­nos pro­vide em­ploy­ment for thou­sands of peo­ple."There is noth­ing wrong with a casi­no, once it is prop­er­ly reg­u­lat­ed and reg­u­la­tions are en­forced," West said.

'Reg­u­la­tions must­be ex­pand­ed'

Sub­has Ramkhelawan, the founder and man­ag­ing di­rec­tor of stock­broking firm Bourse Se­cu­ri­ties Ltd, al­so said reg­u­la­tions must be ex­pand­ed to meet the so­phis­ti­cat­ed op­er­a­tions of the gam­ing in­dus­try."We have spent time ap­ply­ing fees and charges and li­cence fees for ta­bles and dif­fer­ent games, but the reg­u­la­tion about who can par­tic­i­pate and how well they par­tic­i­pate needs a sec­ond look," Ramkhelawan said.

He added that the Fi­nan­cial In­tel­li­gence Unit deals with counter-ter­ror­ism fi­nanc­ing."The FIU leg­is­la­tion is suf­fi­cient to pro­vide prop­er over­sight for mon­ey laun­der­ing and counter-ter­ror­ism. How­ev­er, we dont want casi­no op­er­a­tions to in­fect or­di­nary cit­i­zens. We want en­force­ment, pre­ven­ta­tive ac­tion and prop­er reg­u­la­to­ry con­trols," Ramkhelawan said.He said en­force­ment was al­so im­por­tant.Casi­no op­er­a­tors de­clined to com­ment on the his­to­ry and back­ground of their op­er­a­tions.

'All mem­bers clubs'reg­is­tered with FIU'

Club Princess's casi­no man­ag­er Haroun Urbey said his busi­ness start­ed in 2006. It runs 224 slots and nine ta­ble games at In­de­pen­dence Square. He de­clined to an­swer any more ques­tions, say­ing, "We don't need to an­swer these ques­tions. You can speak to our lawyers."Abas Khalid, the man­ag­er of Is­land Club casi­no, al­so re­fused to di­vulge de­tails of his busi­ness op­er­a­tions.

"I don't have to an­swer you. I am not in­ter­est­ed in this," Khalid said.Con­tact­ed by phone, chair­man of the As­so­ci­a­tion of Mem­bers Clubs Charles Sookhan said T&T does not have casi­nos as there are no pro­vi­sions in the law for casi­nos to op­er­ate. He said, how­ev­er, that pri­vate mem­bers' clubs func­tion like casi­nos and un­der the Gam­bling and Bet­ting act, pro­vi­sions are made for the es­tab­lish­ment of pri­vate mem­bers clubs.He added that reg­u­la­to­ry con­trols are in place, as all mem­bers' clubs are reg­is­tered with the FIU.

"The FIU has out­lined the con­di­tions and reg­u­la­tions that the in­dus­try should ad­here to. We have dis­cussed com­pli­ance and best-prac­tice is­sues as well as full dis­clo­sure," Sookhan said. "We had to sub­mit our com­pli­ance pro­grammes and they have vet­ted it. It is quite a lengthy process, and sim­i­lar to banks and oth­er fi­nan­cial in­sti­tu­tions, we have to re­port source of funds and sus­pi­cious ac­tiv­i­ties."

Asked about in­ter­nal con­trols to mon­i­tor re­spon­si­ble gam­bling be­hav­iours, Sookhan said this was of­ten dif­fi­cult."You can't quan­ti­fy peo­ple's be­hav­iours. A cus­tomer could be play­ing to win a big haul. It's hard to say if they are play­ing a large amount to win back their mon­ey or if they are not play­ing to win," Sookhan ex­plained.

He said there are over 75 pri­vate mem­bers' clubs but no casi­nos in T&T, and all their staff were well trained in spot­ting sus­pi­cious fi­nan­cial trans­ac­tions. He al­so said no one un­der 18 is al­lowed in casi­nos. Sookhan re­vealed that more than 7,000 peo­ple are em­ployed di­rect­ly in casi­nos and an­oth­er 5,000 in­di­rect­ly.

He de­nied that most of the pri­vate mem­bers' clubs in T&T are owned by for­eign­ers. To ac­quire a li­cence, Sookhan said, you must ap­ply to the court and then pay a $1,500 li­cens­ing fee. He al­so said these clubs pay tax­es to the Gov­ern­ment and con­tribute to T&T's rev­enue earn­ings.

Casi­nos in­de­vel­op­ing coun­tries

A 2009 re­port com­piled by the Asia/Pa­cif­ic Group on Mon­ey Laun­der­ing and the Fi­nan­cial Ac­tion Task Force said T&T had 72 reg­is­tered pri­vate mem­bers' clubs.The re­port said the clubs op­er­ate like casi­nos, but are not su­per­vised by the Gov­ern­ment.In Bermu­da, the Cay­man Is­lands, Guatemala and Guyana, casi­nos are il­le­gal.

Be­cause casi­nos are at­trac­tive venues for crim­i­nals, rec­om­men­da­tions were made to en­sure that casi­nos are not used as a cov­er for crime. Gov­ern­ments were ad­vised to im­pose more strin­gent su­per­vi­sion and record keep­ing on casi­no op­er­a­tions in or­der to track and se­cure gov­ern­ment rev­enues.The re­port al­so said casi­no staff and man­agers must pay par­tic­u­lar at­ten­tion to cus­tomers' fi­nan­cial trans­ac­tions and gam­bling be­hav­iours.

With­in Eu­rope, mem­bers of the Eu­ro­pean Union (EU) have tak­en re­spon­si­bil­i­ty to im­ple­ment an­ti-mon­ey laun­der­ing and counter fi­nan­cial ter­ror­ism mea­sures on casi­nos us­ing stip­u­lat­ed EU di­rec­tives.

In 2006, for­mer prime min­is­ter Patrick Man­ning said he want­ed to reg­u­late the gam­ing in­dus­try, say­ing glob­al re­search find­ings have proven that the gam­ing in­dus­try de­stroys the fi­nan­cial se­cu­ri­ty of fam­i­lies, af­fects the sta­bil­i­ty of mar­riages, en­cour­ages de­viant be­hav­iour among chil­dren, un­der­mines work ethics, caus­es in­creas­es in crime, in­clud­ing mon­ey laun­der­ing, and gives rise to prob­lem gam­blers.

Casi­nos have con­tin­ued to flour­ish around the world and es­pe­cial­ly in de­vel­op­ing coun­tries be­cause of a lack of an­ti-mon­ey laun­der­ing and counter-fi­nan­cial-ter­ror­ism cov­er­age for casi­no sec­tors. The re­port said a num­ber of ju­ris­dic­tions clear­ly lack aware­ness of mon­ey-laun­der­ing and ter­ror­ist-fi­nanc­ing risks in the casi­no and gam­ing sec­tors.

A sig­nif­i­cant num­ber of ju­ris­dic­tions have lim­it­ed reg­u­la­to­ry con­trols, in­clud­ing "fit and prop­er tests for casi­no own­ers, man­agers and staff, in­ter­nal con­trols. Among the in­ter­nal con­trols are the abil­i­ty of staff mem­bers to iden­ti­fy and re­port sus­pi­cious fi­nan­cial trans­ac­tions.

In many ju­ris­dic­tions the casi­no reg­u­la­tor proac­tive­ly as­sists the flow of AML/CTF in­for­ma­tion to the FIU by con­duct­ing in­spec­tion pro­grammes or au­dits which seek to iden­ti­fy sus­pi­cious ac­tiv­i­ty which the casi­no op­er­a­tor or reg­u­la­tor then re­ports to the FIU and/or law en­force­ment.

www.fatf-gafi.org/me­dia/fatf/ doc­u­ments/re­ports/Vul­ner­a­bil­i­ties%20of%20Casi­nos%20and%20Gam­ing%20Sec­tor.pdf