I mean, if it’s because of legal reasons, wouldn’t they request KYC paperwork before depositing the first bet instead of after? You know, since handling dirty money is still a crime even if the money is locked in the casino
Only if the deposit is over the threshold for KYC laws. (If the threshold is $X, and you get $X in chips, you will need KYC stuff collected from you).
Otherwise no:
Patron A goes to the table and receives $50 in chips. No information is exchanged. No chips are cashed out at the cashier because Patron A lost it all at blackjack. No KYC.
Patron B goes to the table and receives $50 in chips. He does well at the tables and makes several good bets that means he’s ahead $X dollars. Since he won this in several bets, there is no taxable event, but trying to cash out $X in chips is a currency exchange and means the casino now needs to gather KYC information on him.
Most people (99%) gamble like patron A. Patron B is inconvenienced because of Patron C:
Patron C stuffs $X dollars into a slot machine and cashes out without gambling. Patron C now has $X in slot tickets, which he attempts to exchange at the cashier window. His goal is to claim his $X came from gambling winnings and not wherever it actually came from. The cashier has to collect KYC info on him, and the goal is to make a paper trail so the casino can comply with state/federal law.
Patron C has a lot of other creative things he can try to do to get around these laws (see structuring)
Since most people are going to fall in category A, the casino wants to make the barrier for gambling very very low. They will only ask what is absolutely necessary at the moment. This is why those websites don’t ask for scans of your license or blood-type or whatever when you sign up, because they don’t need to if they’re just taking your $50. I haven’t used a gambling website but if they’re US based they have to follow US law.
I was gonna ask about “Patron C,” as it’s a well known secret among the unlicensed weed growers in California that casinos are a reasonably easy and cheap method of cleaning illegally obtained money, such as selling tons of weed that wasn’t licensed to grow. It’s such a well known “secret” that even us licensed growers know about it.
I mean, if it’s because of legal reasons, wouldn’t they request KYC paperwork before depositing the first bet instead of after? You know, since handling dirty money is still a crime even if the money is locked in the casino
Only if the deposit is over the threshold for KYC laws. (If the threshold is $X, and you get $X in chips, you will need KYC stuff collected from you).
Otherwise no:
Patron A goes to the table and receives $50 in chips. No information is exchanged. No chips are cashed out at the cashier because Patron A lost it all at blackjack. No KYC.
Patron B goes to the table and receives $50 in chips. He does well at the tables and makes several good bets that means he’s ahead $X dollars. Since he won this in several bets, there is no taxable event, but trying to cash out $X in chips is a currency exchange and means the casino now needs to gather KYC information on him.
Most people (99%) gamble like patron A. Patron B is inconvenienced because of Patron C:
Patron C stuffs $X dollars into a slot machine and cashes out without gambling. Patron C now has $X in slot tickets, which he attempts to exchange at the cashier window. His goal is to claim his $X came from gambling winnings and not wherever it actually came from. The cashier has to collect KYC info on him, and the goal is to make a paper trail so the casino can comply with state/federal law.
Patron C has a lot of other creative things he can try to do to get around these laws (see structuring)
Since most people are going to fall in category A, the casino wants to make the barrier for gambling very very low. They will only ask what is absolutely necessary at the moment. This is why those websites don’t ask for scans of your license or blood-type or whatever when you sign up, because they don’t need to if they’re just taking your $50. I haven’t used a gambling website but if they’re US based they have to follow US law.
I was gonna ask about “Patron C,” as it’s a well known secret among the unlicensed weed growers in California that casinos are a reasonably easy and cheap method of cleaning illegally obtained money, such as selling tons of weed that wasn’t licensed to grow. It’s such a well known “secret” that even us licensed growers know about it.