Inside Asian Gaming

August 2016 inside asian gaming 27 “The new instructions are in line with government policies of promoting a healthy and sustainable development of the gaming industry by preventing the risks of its association with criminal activities.” revoke the previous instructions on the matter, which were in force since November 2006. The new instructions are in line with government policies of promoting a healthy and sustainable development of the gaming industry by preventing the risks of its association with criminal activities. These have generally been perceived as being more prevalent in connection with the play of politically exposed persons and of unidentifiable beneficiary players in junket rooms, both of which are key points in the instructions. By addressing these issues head-on, the instructions have become the most tangible translation of the Central Government’s anti-corruption campaign into local level regulations. This, in itself, is of the utmost importance. The directives impose generally more stringent obligations than their predecessors but also promote the introduction of a risk-based approach to internal controls by the entities to which they apply: casino operators, management companies, gaming promoters and the concessionaires of sports betting, animal racing wagering and lotteries. These are detailed in 34 articles, spread throughout 46 pages – a far cry from the 14 articles of the recently revoked 2006 instructions. Now, let us take a closer look. On the contrary to their predecessors, Instructions 1/2016 require that internal controls – an operator’s policies, procedures and processes designed to mitigate risks and to achieve compliance with the applicable AML and CTF regulations – be approved in advance by the DICJ and subject to regular internal testing. The prescribed minimum scope of internal controls has now been extended from the classic concepts of identifying and reporting suspicious or high value cash transactions, to cover the identification of the ultimate beneficiaries of play and the continuous monitoring of both domestic and foreign politically exposed persons (PEPs). The concept of Customer Due Diligence (CDD) has been introduced and it must be performed in respect of all patrons with whom any entity subject to the instructions has or intends to have an ongoing business relationship with, regardless of the value of underlying transactions or of any signs of suspicious activities. The instructions also require all the entities to which they apply (yes, junkets included) to employ a suitable and experienced compliance officer, who must master at least one of Macau’s two official languages andhavea solidknowledgeof theSAR’s legal system. Furthermore, they may be subject to ad hoc technical examinations Rules of the game