California Attorney General Rob Bonta on Friday filed a complaint with the state’s Gambling Control Commission against The Bicycle Hotel and Casino after the federal government fined the Bell Garden cardroom $500,000 for violating a law to stop money laundering.
Earlier that same day, the US Attorney for California’s Central District said The Bicycle failed to file proper Currency Transaction Reports (CTR) and Suspicious Activity Reports for Casinos (SARC) for a Chinese national high roller who visited the casino about 100 times during a nearly eight-month stretch in 2016.
The high roller employed an assistant who handled more than $100 million in cash transactions during that period. According to the US Attorney’s release, the cardroom’s staff notified management in July 2016 that workers failed to file CTRs in the gambler’s name. Casino staff also did not file any SARCs during that span, which ran from Jan. 7, 2016 to July 27, 2016.
After being made aware, The Bicycle refiled the CTRs. It then started filing SARCs “based on the suspicious nature of his source of funds,” and the casino established an Anti-Money Laundering Committee to increase awareness of federal anti-money laundering laws and regulations.
Because The Bicycle accepted responsibility for its actions and took steps to improve its anti-money laundering efforts, federal authorities agreed not to prosecute in lieu of the fine. The cardroom also must submit to an independent audit and continued cooperation with authorities.
Complaint: Bicycle Didn’t Learn from Other Cardroom Incidents
With the federal investigation resolved, Bonta said in a statement he would seek to hold The Bicycle’s owners responsible for breaking state laws.
“Our gaming laws are about protecting the public and ensuring money from illicit activity isn’t funneled through card rooms and casinos,” he said.
While federal authorities noted that Bicycle’s management cooperated with the investigation, the complaint before the CGCC noted that state and federal officials levied similar charges against five other cardrooms during the previous five years.
The incidents led to emergency shutdowns and at least $1.8 million in fines.
“Respondents apparently did not adjust or react, or elected to turn a blind eye, to events involving California’s card rooms relating to BSA compliance and anti-money laundering programs,” the complaint stated. “Those events included emergency orders shutting down card rooms, federal indictments, and a FinCEN assessment.”
The complaint seeks additional monetary penalties against the casino, and a spokesperson for the attorney general told Casino.org that additional disciplinary actions could include suspensions or license revocations.
When asked if there were any criminal proceedings, the spokesperson said the office does not comment on potential or ongoing investigations.
A message left Friday for The Bicycle representatives was not returned.
California Cardrooms Want Sports Betting
News of The Bicycle’s fine could not come at a worse time for cardrooms, which are trying to get a measure on next year’s ballot to allow sports betting and offer more types of card games.
The cardrooms’ measure would allow all other forms of legal gaming – state-licensed racetracks and tribal casinos – to offer sports betting, and the state’s professional sports teams would get the opportunity as well.
Bonta’s office released the summary for the measure last month, and proponents have until mid-April to submit petitions to county elections officials. The measure needs more than 997,000 signatures from registered voters to make it on the November 2022 ballot.
Tribal casinos already have secured a measure on next year’s ballot that would allow retail sports betting at their venues and state racetracks. In addition, seven sports betting operators are funding a proposed measure that would legalize mobile wagering statewide.
The cardrooms measure, if it gets on the ballot, says that the sports betting measure that earns the most yes votes – if more than one passes – would be the one that’s enacted.
While the groups will work to promote their own individual measure, they will also work to defeat rival measures. As part of that, the cardrooms and their supporters have created Taxpayers Against Special Interest Monopolies, and records from the California Secretary of State show The Bicycle has contributed to the committee.
While tribal casinos oppose both the cardroom and sportsbook measures, and regarding the cardrooms, tribal leaders have been quick to point out their history of run-ins with state and federal authorities.
“They are considered bad actors,” Pechanga Band of Luiseño Indians Chairman Mark Macarro said about the cardrooms at last month’s Global Gaming Expo in Las Vegas.
The post The Bicycle Fined $500K by Feds, Faces California Charges on Anti-Money Laundering Violations appeared first on Casino.org.