IMGL Magazine April 2023


not specifically address remote examination of a document for in- person cashless gaming. Several states permit casinos to remotely examine a document for in-person gaming, and FinCEN has not objected to any such practice in those states. For instance, the Colorado Department of Revenue notified casinos in 2019 of the Colorado governor’s policy statement permitting the use of digital personal identification technology and the potential implications of this policy statement for gaming (including in-person gaming). 7 This policy statement provides that “merchants may start accepting Colorado Digital ID for proof of identity and age within Colorado on October 30, 2019” and “[t]he Colorado Digital ID . . . is valid for acceptance anywhere age or identity verification is required.” FinCEN has not stated that a casino’s examination of a Colorado Digital ID for identity verification purposes does not constitute the “examination of a document” under applicable FinCEN regulations. Additionally, FinCEN regulations require casinos to maintain a record of each customer’s name, permanent address, and social security number, and permit digital storage of such information. 8 Given that FinCEN permits digital storage of the information a casino collects, it follows that the collection and examination of such information may also occur digitally and is consistent with FinCEN regulations and its Guidance. FinCEN recognized non-documentary means of identity verification (such as knowledge-based systems, databases and checking references with financial institutions) can provide more comprehensive verification than traditional documentary methods (like government issued IDs), are less likely to be altered or forged, and may provide a better “overall [customer] risk assessment”. 9 As a McKinsey report from seven years ago noted: As the rules become ever more complex and the consequences of non-compliance ever more severe, banks will likely have no choice but to eliminate human interventions as much as possible in risk’s dealings with customers and to hardwire the right behaviors into their products, services, and processes.10 Funding After a customer establishes a cashless wagering account with an operator, the customer can fund that account in a variety of ways,

including: 1. ACH/eCheck. An eCheck deposit drafts an electronic check from a player’s bank account and sends it through Automated Clearing House for processing. 2. Debit Card. A debit card used by a player will have a Bank Identification Number (BIN) number, which is the first 4-6 numbers on a payment card that identifies the Network (Visa, Mastercard, etc.) and the card issuer (or financial institution at which the bank account exists). 3. Credit Card. A credit card also uses a BIN number that identifies the Network and the card issuer. 4. Prepaid Card. A prepaid card used by a player will also have a BIN number indicating that it is a prepaid card and identifying the Network and card issuer. In this regard there is no difference between a Prepaid Card and a Debit Card. In fact, all debit is simply a form or subset of prepaid access since it denotes that the money in that bank account is the money which can be spent or used, and no more. FinCEN formally defines two types of prepaid cards, reloadable (Open Loop Prepaid Access) and non-reloadable (Closed Loop Prepaid Access): (a) Reloadable Prepaid Cards. A reloadable prepaid card is a multi- use card. It allows a player to establish an account (after going through the bank’s required Customer Identification Program or “CIP” process) with the bank/financial institution and load the bank account with funds more than once. This type of account may also permit ATM transactions. Aside from back-end banking minutiae, a reloadable prepaid card functions in the exact same way as a debit card. (b) Non-reloadable Prepaid Cards. A non-reloadable prepaid card is a single or multi use card with a low dollar threshold (generally under $200 and often much lower), no ATM transactions, and most importantly no ability to add funds again. These cards, while issued by a bank, do not require CIP. The term “gift card” is sometimes used to mean a non-reloadable prepaid card, although that term does not have a specific banking definition. 5. Digital Wallet. A digital wallet is an application that allows a player to store a payment method, including a bank account, debit card, credit card or prepaid card. A digital wallet can also include

7 See Colorado Industry-Wide Gaming Bulletin 57 8 See 31 C.F.R. § 1021.410(a), (c)(1). 9 See FIN 2021-R001. 10 The Future of Bank Risk Management, McKinsey & Company (December 2015), p. 9.



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