The very fact that the government of Goa was forced tointroduce the Goa Anti Laundering and Financing of Terrorism Guidelines 2013,to prevent casinos form being used as parking lots for the disposal andconversion of terrorism tainted black money, is significant. But thesignificance melts down in to a bit of a farce if you see the haphazard andcallous manner in which these guidelines have been drawn to ostensibly preventmoney laundering.
Firstly the government has concluded that the casinos of Goaare used by criminal elements for money laundering. This could either mean thatthey are ploughing in funds earned from terrorism into the card and roulettetables of our floating and on-shore casinos , or taking back the winnings andconverting them into white. Frankly even a thorough reading of the guidelinesjust issued, gives the undeniable impression that the government hastransferred the onus of playing private detective, police and informer to thecasinos. More shockingly the guidelines appear to be drafted in a completehurry, with babus in the home department, liberally using their internet accessfacilities to go to websites of foreign casinos or regulatory authorities anddownloading seemingly detailed ways of functioning of casinos. But anyone withmore than a passing knowledge of casino operations in Goa would realise thatmost of them are not applicable here. This is what makes the exercisemeaningless.
The government expects the casinos to function like banksand have a KYC (Know Your Customer) database. The intention is perfect but thepracticality has not been looked into. A KYC process is based on a clearfundamental “ the presence of accounts that can be traced. The casino industryin Goa does not have accounts of its players (not officially, though there is awide network of unofficial book keeping and fund transfer). The industry isbaffled about how the database of every customer can be made when a) They arefloating customers who often don’t return b) Casino gamblers are hardly thespecies who would put their personal cards on the table along with theirplaying cards.
The guidelines call for the appointment of a PrincipalOfficer whose job will be to be the go to guy for all agencies, especially theFinancial Intelligence Unit. On paper, this move can’t be faulted. But hereagain there is a huge chasm between intent and practicality of execution. The PrincipalOfficer will be able to report suspicious transactions from time to time, ifthe casino is really transparent “which itself is a major issue sincetransparency and business are not compatible bed fellows. But he will to beable to keep a scientific know how of customers simply because there is no onepoint mechanism like a smart card reader with all the details of t customers.
There has been no application of mind in drafting theseguidelines, and that is explicit. Here’s a quick run through of absurditiesthat don’t fit in a Goa situation. 6 g: Casinos shall not allow the opening ofaccounts whose identity has not been verified…”. This begs the question. How is this relevantwhen casinos in Goa do not open accounts of its customers? It’s done in thewest. Then Clause 10 K (i) asks casinos to have policies to detect largepayouts by cash or issuance of cheque. The guidelines make several referencesto cheque payouts of casinos when there is no system of cheque issuance in anycasino in Goa.
These guidelines are a wasted exercise. While it identifiesthe problem of black money through dubious means from entering the system, itactually puts the onus on casinos to detect it. Casino managements do have thetraining and resources to be policemen because these guidelines ask them tomove from self-regulation to investigation.
The Goan has reason to be vindicated because its cover story‘Goa’s Casinos: All black” highlighted this. But the easy solution is not inthese guidelines. It also does not getthe sense of the industry that thrives on camouflage. The relationship betweencustomer and casino is one of deep understanding which does not often allowfinancial laws to come in the way. These guidelines are issued with the hopethat this relationship which pays for the casino business and the salaries ofthose in it will be broken at the altar of transparency. It’s a false hope.
At the same time established casino operators are open toreform starting with the appointment with a Gaming Commission, which includesindustry representation that in turn will build in mechanisms of control. Atthe same time, tracking the inflow of black money into casinos will have to bedone by established and trained government agencies. As for these guidelines,they are a great internet downloading exercise.
