A casino is a high-class establishment where people can gamble and play games of chance. Its patrons often wear suits and dresses, and it is expected to be a social gathering. Many people enjoy taking weekend bus trips to the nearest casino with their friends.
While musical shows, lighted fountains and hotels help draw in customers, casinos wouldn’t exist without the billions of dollars they make from gambling. Every game has a built-in statistical advantage for the house, and that’s how casinos make money.
The taxes associated with casinos vary by country. In general, state and local governments impose taxes on casino gambling revenues. Those revenues are then earmarked for various purposes. Public education is often a favored use of these funds. However, it is important to note that casino tax revenue does not create new money for society. Instead, it transfers income from casino owners to state and local governments and then to program recipients.
Casino gambling revenues are taxable by state laws that set minimum and maximum rates. These taxes are calculated on a casino’s adjusted gross proceeds (AGR), which includes all gaming revenues minus winnings paid to wagerers. Some states have a flat rate, while others have progressive tax rates that increase as the AGR increases.
Besides casinos, many casino towns also have hotels and shops that are taxable by local sales tax. Tourists spend money outside the walls of casinos, buying local food and drinks, souvenirs, and other leisure activities. These spending habits increase the amount of casino taxes that state and local governments collect.
Casinos must adhere to a set of strict regulations, and a single mistake can result in heavy fines. These regulations focus on preventing money laundering and terrorist financing (ML/TF) and the use of casinos as cover for illegal activities. They include KYC as part of the CDD program and a host of other procedures, like record keeping and suspicious activity reporting.
Licensed casinos must also take steps to prevent organized money lending between patrons on the premises. They must also be prepared to report such behavior to the Gambling Commission. They must also onboard players in accordance with Responsible Gambling requirements and verify their identity.
Regulatory agencies require that casinos file Currency Transaction Reports when a patron provides to or takes away more than $10,000 in cash during the casino’s defined 24-hour gaming day. FinCEN maintains a website with statutes and regulations, forms, and BSA E-Filing information. These requirements are largely based on the Bank Secrecy Act and related anti-money laundering laws.