[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Proposed Rules]
[Pages 67260-67265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32396]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network Proposed Amendments to the 
Bank Secrecy Act Regulations Regarding Reporting and Recordkeeping by 
Card Clubs

31 CFR Part 103

RIN 1506-AA18
AGENCY: Financial Crimes Enforcement Network, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Financial Crimes Enforcement Network (``FinCEN'') is 
proposing to amend the regulations implementing the statute generally 
referred to as the Bank Secrecy Act to include certain gaming 
establishments, commonly called ``card clubs,'' ``card rooms,'' 
``gaming clubs,'' or ``gaming rooms'' within the definition of 
financial institution subject to those regulations.

DATES: Written comments must be received on or before March 20, 1997.

ADDRESSES: Written comments should be submitted to: Office of 
Regulatory Policy and Enforcement, Financial Crimes Enforcement 
Network, Department of the Treasury, 2070 Chain Bridge Road, Vienna, 
Virginia 22182, Attention: NPRM--Card Clubs.

Submission of comments: Comments on all aspects of the proposed 
regulation are welcome and will be considered if submitted in writing 
prior to March 20,

[[Page 67261]]

1997. An original and four copies of any comments must be submitted. 
All comments will be available for public inspection and copying, and 
no material in any such comments, including the name of any person 
submitting comments, will be recognized as confidential. Accordingly, 
material not intended to be disclosed to the public should not be 
submitted.

Inspection of comments: Comments may be inspected at the Department of 
the Treasury between 10:00 a.m. and 4:00 p.m., in the Financial Crimes 
Enforcement Network (``FinCEN'') reading room, on the third floor of 
the Treasury Annex, 1500 Pennsylvania Avenue, N.W., Washington, D.C. 
20220. Persons wishing to inspect the comments submitted should request 
an appointment by telephoning (202) 622-0400.

FOR FURTHER INFORMATION CONTACT: Leonard C. Senia, Senior Financial 
Enforcement Officer, Office of Regulatory Policy and Enforcement, 
Financial Crimes Enforcement Network (703) 905-3931, or Joseph M. 
Myers, Attorney-Advisor, Office of Legal Counsel, Financial Crimes 
Enforcement Network, (703) 905-3557.

SUPPLEMENTARY INFORMATION:

Introduction

    This document proposes (i) to add a definition of ``card club,'' in 
a new paragraph (8) of 31 CFR 103.11(n), as a component of the 
definition of ``financial institution'' for purposes of the Bank 
Secrecy Act rules, (ii) to provide, by means of a new paragraph 
(7)(iii) in section 103.11(n), for treatment of card clubs generally in 
the same manner as casinos under the Bank Secrecy Act, (iii) to 
renumber paragraphs (8) and (9) of section 103.11(n) as paragraphs (9) 
and (10), respectively, and (iv) to add a new paragraph (11), 
applicable only to card clubs, to 31 CFR 103.36(b), to require 
retention by card clubs of records of a customer's currency 
transactions, and records of all activity at card club cages or similar 
facilities, maintained in the ordinary course of a club's business. The 
proposed changes reflect the authority contained in section 409 of the 
Money Laundering Suppression Act of 1994 (the ``Money Laundering 
Suppression Act''), Title IV of the Riegle Community Development and 
Regulatory Improvement Act of 1994, Pub. L. 103-325.

Background

    The statute popularly known as the ``Bank Secrecy Act,'' Titles I 
and II of Pub. L. 91-508, as amended, codified at 12 U.S.C. 1829b, 12 
U.S.C. 1951-1959, and 31 U.S.C. 5311-5330, authorizes the Secretary of 
the Treasury, inter alia, to issue regulations requiring financial 
institutions to keep records and file reports that are determined to 
have a high degree of usefulness in criminal, tax, and regulatory 
matters, and to implement counter-money laundering programs and 
compliance procedures. Regulations implementing Title II of the Bank 
Secrecy Act (codified at 31 U.S.C. 5311-5330), appear at 31 CFR Part 
103. The authority of the Secretary to administer the Bank Secrecy Act 
has been delegated to the Director of FinCEN.
    The range of financial institutions to which the Bank Secrecy Act 
applies is not limited to banks and other depository institutions. It 
also includes securities brokers and dealers, money transmitters, and 
the other non-bank businesses that offer customers one or more 
financial services.
    State licensed gambling casinos were generally made subject to the 
Bank Secrecy Act as of May 7, 1985, by regulation issued early that 
year. See 50 FR 5065 (February 6, 1985).1 Gambling casinos 
authorized to do business under the Indian Gaming Regulatory Act became 
subject to the Bank Secrecy Act on August 1, 1996. See 61 FR 7054-7056 
(February 23, 1996).2
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    \1\ Casinos with gross annual gaming revenue of $1 million or 
less were, and continue to be, excluded from coverage.
    \2\ Treasury has issued four sets of rules in all relating to 
the application of the Bank Secrecy Act to casino gaming 
establishments. See, in addition to the two rules cited in the text, 
54 FR 1165-1167 (January 12, 1989), and 59 FR 61660-61662 (December 
1, 1994) (modifying and putting into final effect the rule 
originally published at 58 FR 13538-13550 (March 12, 1993)).
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    In recognition of the importance of application of the Bank Secrecy 
Act to the gaming industry, section 409 of the Money Laundering 
Suppression Act codified the application of the Bank Secrecy Act to 
gaming activities by adding casinos and other gaming establishments to 
the list of financial institutions specified in the Bank Secrecy Act 
itself.3 The statutory specification reads:

    \3\ The 1985 action initially making casinos subject to the Bank 
Secrecy Act had been based on Treasury's statutory authority to 
designate as financial institutions (i) businesses that engage in 
activities ``similar to'' the activities of the businesses listed in 
the Bank Secrecy Act, as well as (ii) other businesses ``whose cash 
transactions have a high degree of usefulness in criminal, tax, or 
regulatory matters.'' See 31 U.S.C. 5312(a)(2)(Y) and (Z) (as 
renumbered by the Money Laundering Suppression Act).
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    (2) financial institution means--
* * * * *
    (X) a casino, gambling casino, or gaming establishment with an 
annual gaming revenue of more than $1,000,000 which--
    (i) is licensed as a casino, gambling casino, or gaming 
establishment under the laws of any State or any political 
subdivision of any State; or
    (ii) is an Indian gaming operation conducted under or pursuant 
to the Indian Gaming Regulatory Act other than an operation which is 
limited to class I gaming (as defined in section 4(6) of such Act) * 
* *

31 U.S.C. 5312(a)(2)(X). Treasury has previously indicated that it is 
in the process of rethinking the application of the Bank Secrecy Act to 
gaming establishments. See 59 FR 61660-61662 (December 1, 1994) and 61 
FR 7054, 7055 (February 23, 1996). This notice of proposed rulemaking 
is a step in that process.

Explanation of Provisions

A. Overview

    The proposed regulations would expand the range of gaming 
establishments to which the Bank Secrecy Act applies to include card 
clubs. Generally card clubs would be subject to the same rules as 
casinos (a matter on which comment is specifically requested below), 
unless a specific provision of the rules in 31 CFR Part 103 applicable 
to casinos explicitly required a different treatment for card clubs.

B. Definition of Card Club

    The definition of card club itself is proposed to be added as a 
component of the definition of ``financial institution'' in a new 
paragraph 31 CFR 103.11(n)(8).4 Under the proposed amendment, the 
term would include, inter alia, any establishment of the type commonly 
referred to as a ``card club,'' ``card room,'' ``gaming club'' or 
``gaming room,'' that is duly licensed or authorized to do business 
either under state law, under the laws of a particular political 
subdivision within a state, or under the Indian Gaming Regulatory Act 
or other federal, state, or tribal law or arrangement affecting Indian 
lands. Card clubs licensed by U.S. territories or possessions would 
also fall within the definition.
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    \4\ As indicated, no language in the financial institution 
definition is being deleted; present paragraphs 103.11(n)(8) and 
(n)(9) would simply become paragraphs (n)(9) and (n)(10), 
respectively.
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    The general need for and appropriateness of treatment of casinos as 
financial institutions for purposes of the Bank Secrecy Act have been 
accepted, as indicated above, since the mid-1980s. Treasury has made 
clear the need to prevent casinos, which both deal in cash and cash-
equivalent chips

[[Page 67262]]

and can offer a variety of other financial services to customers, from 
being used to avoid the effect of the Bank Secrecy Act.5
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    \5\ The preamble to the final rule bringing casinos within the 
Bank Secrecy Act stated that
    [i]n recent years Treasury has found that an increasing number 
of persons are using gambling casinos for money laundering and tax 
evasion purposes. In a number of instances, narcotics traffickers 
have used gambling casinos as substitutes for other financial 
institutions in order to avoid the reporting and recordkeeping 
requirements of the Bank Secrecy Act.
    Inclusion of casinos in the definition of financial 
institution[s] in 31 CFR Part 103 was among the specific 
recommendations in the October 1984 report of the President's 
Commission on Organized Crime, ``The Cash Connection: Organized 
Crime, Financial Institutions, and Money Laundering.'' The problem 
was also the subject of hearings in 1984 before the House Judiciary 
Subcommittee on Crime entitled ``The Use of Casinos to Launder the 
Proceeds of Drug Trafficking and Organized Crime.''
    In order to prevent the use of casinos in this fashion, Treasury 
is amending the regulations in 31 CFR Part 103 to require gambling 
casinos to file the same types of reports [and maintain the same 
types of records] that it requires from financial institutions 
currently covered by the Bank Secrecy Act.
    50 FR 5065, 5066, (February 6, 1985); see also 49 FR 32861, 
32862 (August 17, 1984) (corresponding language in notice of 
proposed rulemaking).
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    Although application of the Bank Secrecy Act to gaming 
establishments has heretofore been limited to casinos, that limitation 
is not a statutory one. As noted, the statutory definition of financial 
institution includes any establishment licensed as a ``gaming 
establishment,'' whether the licensing authority is a state, a 
municipality or other state subdivision, or one of the licensing 
authorities recognized by the Indian Gaming Regulatory Act. See 31 
U.S.C. 5311(a)(2)(X)(quoted above).
    Card clubs are a fast-growing segment of the gaming industry, 
primarily in California. Although card club operations differ, the 
establishments generally offer facilities for gaming by customers who 
bet against one another, rather than against the establishment. Most 
large card clubs run the games, but the clubs earn their revenue by 
receiving a fee from customers (for example a per table charge) rather 
than from, as in a classic casino, running games and effectively 
``banking'' the games offered so that customers bet against the house.
    While the scope of casinos and card club operations may have 
differed in the past, they no longer necessarily do so. California and 
some other states in which card clubs operate do not permit casino 
gaming (or only permit such gaming in limited forms). But, for example, 
customers at California card clubs wagered about $8.9 billion in 1995. 
Against that background, there are two primary reasons that card clubs, 
like other gaming establishments, require coverage under the Bank 
Secrecy Act.
    First, many card clubs, like casinos, now offer their customers a 
wide range of financial services. As it indicated when it proposed 
extension of the Bank Secrecy Act to tribal casinos, the Treasury has 
generally sought to apply the Bank Secrecy Act to gaming establishments 
that provide their customers with a financial product--gaming--and as a 
corollary offer a broad array of financial services, such as customer 
deposit or credit accounts, facilities for transmitting and receiving 
funds transfers directly from other institutions, and check cashing and 
currency exchange services, that are similar to those offered by 
depository institutions and other financial firms. The fact that the 
gaming at card clubs does not directly involve the wagering of house 
monies in no way alters the fact that vast sums of currency and other 
funds pass through such establishments, or the fact that card clubs are 
coming to offer their customers corollary financial services to 
facilitate the movement of funds.
    Second, card clubs are at least as vulnerable as other gaming 
establishments to use by money launderers and those seeking to commit 
tax evasion or other financial crimes, both because of their size and 
because those institutions lack many of the controls found at casinos. 
Given their growth, their prevalence in the nation's most populous 
state, and their potential for expansion, there is no basis for 
distinguishing card clubs from casinos for purposes of the Bank Secrecy 
Act.6
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    \6\ Federal and state law enforcement authorities have expressed 
concern for several years about card clubs as venues for criminal 
activity. See, e.g., Asian Organized Crime, Part I, S. Rep. 102-346, 
101st Cong., 1st Sess. (1991); Asian Organized Crime: the New 
International Criminal, S. Rep. 102-940, 101st Cong., 2nd. Sess. 
(1992); Office of the Attorney General of California, ``Status of 
Cardroom Gambling in California and the Proposed Gambling Control 
Act'' (Public Document, February 1995); cf. Permanent Subcommittee 
on Investigations, Senate Committee on Governmental Affairs, 
Hearings: Asset Forfeiture Program--A Case Study of the Bicycle Club 
Casino, 104th Cong., 2nd. Sess. (March 19, 1996).
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    There is also some indication that the line between card clubs and 
casinos may be blurring in practice. Thus, FinCEN noted in the preamble 
to the final rule extending the Bank Secrecy Act to tribal casinos 
that:

    [A]n establishment that claimed to be a gambling ``club'' rather 
than a casino because it simply offered customers an opportunity to 
gamble with one another, but that in practice funded certain 
customers so that other customers were in effect gambling against 
``house'' money, and that offered its customers financial services 
of various kinds, is arguably a casino under present law. Thus, for 
example, if such a ``club'' failed to file currency transactions 
reports or allowed a customer to deposit funds in a player bank 
account in the name of the customer without requiring the customer 
to provide identifying information, the club would arguably be 
operating in violation of the Bank Secrecy Act.

61 FR 7055 note 1.
    Given the growth of card clubs and their potential for offering a 
venue for money launderers, the application of the Bank Secrecy Act to 
such establishments should not depend on whether games are banked or 
otherwise backed with house funds.7 Similarly, the fact that some 
card clubs operating under the terms of the Indian Gaming Regulatory 
Act, 25 U.S.C. 2701 et seq, may be Class II rather than Class III 
establishments for purposes of the regulatory provisions of that 
legislation (so that card clubs are subject to tribal regulation rather 
than to regulation pursuant to state-tribal compact), does not provide 
a relevant distinction for Bank Secrecy Act purposes.8 (As was the 
case with tribal casinos, a card club that operates on Indian lands 
under a view that compliance with the Indian Gaming Regulatory Act is 
unnecessary or inconsistent with inherent tribal rights would not for 
that reason be exempted from the terms of the Bank Secrecy Act, to the 
extent that those terms would otherwise apply to the card club's 
operations.)
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    \7\ At present, the receipt of cash in excess of $10,000 by card 
clubs in a single transaction (or multiple related transactions) is 
required to be reported under section 6050I of the Internal Revenue 
Code. The limited cash transaction reporting rules of section 6050I 
(which apply to currency received in all non-financial trades or 
businesses) are not as extensive as the reporting rules of the Bank 
Secrecy Act (which apply both to receipts and payments of currency 
and are not matched by recordkeeping, suspicious transaction 
reporting, and anti-money laundering compliance program rules).
    \8\ The National Indian Gaming Commission has taken the position 
that games banked by players, rather than the house, are nonetheless 
``banked card games'' whose operation is required to occur in a 
Class III facility. Thus it appears that some percentage of card 
clubs on tribal lands will be, or will be operated within, Class III 
facilities that will generally become subject to the Bank Secrecy 
Act on August 1, 1996. See National Indian Gaming Commission 
Bulletin 95-1 (April 10, 1995). FinCEN understands that certain 
Asian card games (whose rules employ a betting formula in which a 
player does not offer to take on all competitors), may be permitted 
to be offered in Class II facilities for purposes of the Indian 
Gaming Regulatory Act.
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    Card clubs, like casinos, will only become subject to the Bank 
Secrecy Act once they generate more than $1 million in ``gross annual 
gaming revenue.'' Treasury believes that as applied to card clubs the 
term includes revenue derived from or generated by customer gaming

[[Page 67263]]

activity (whether in the form of per-game or per-table fees, fees based 
on winnings, rentals, or otherwise) and received by an establishment.

C. Treatment of Card Clubs Under the Bank Secrecy Act

    Under the proposed regulations, card clubs would be treated under 
the Bank Secrecy Act in the same manner as casinos unless specific 
provisions of the rules in 31 CFR Part 103 explicitly require a 
different treatment. Thus, card clubs would become subject not simply 
to the Bank Secrecy Act's currency transaction reporting rules but to 
the full set of provisions (described by the Congress as ``a 
comprehensive currency reporting and detailed recordkeeping system with 
numerous anti-money laundering safeguards'' 9) to which casinos in 
the United States are subject.
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    \9\ See H.R. Rep. No. 652, 103rd Cong., 2nd Sess. 193 (1994).
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    Treatment of card clubs on a par with casinos would generally 
impose on such clubs the Bank Secrecy Act rules that apply to casinos. 
Thus, each card club would be required to file with the Department of 
the Treasury a report of each receipt or disbursement of more than 
$10,000 in currency in its operations during any gaming day; 
aggregation of multiple currency transactions is required in a number 
of situations. See 31 CFR 103.22(a)(2). The requirement would apply to 
all receipts or disbursements of currency in connection with gaming 
activities at the card club, including, but not limited to, transfers 
of currency for chip purchases or redemptions, exchanges of bills of 
one denomination for bills of another denomination, exchanges of one 
currency for another currency, transfers to or from player accounts or 
deposit facilities, payments or advances on credit, wagers of currency 
or payments of currency to settle wagers, and transfers intended for 
conversion to other forms of negotiable instruments or for electronic 
funds transfer or transmittal out of, or as a result of such transfer 
or transmittal into, the card club.10
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    \10\ Legislation recently enacted in California adds gaming 
clubs to the list of financial institutions in that state that are 
required to report transactions in currency of more than $10,000 to 
the California Department of Justice. See Assembly Bill 3183 (signed 
September 28, 1996), amending Cal. Penal Code 14161. The new 
reporting requirement becomes effective on January 1, 1997. It is 
anticipated that the California and Bank Secrecy Act currency 
transaction reporting requirements will be coordinated (as is done 
in other situations in which Bank Secrecy Act and state reporting 
rules overlap) to reduce regulatory burden and costs of compliance.
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    It is particularly important to understand that the requirements 
would apply regardless of where the transfers occur at the card club. 
Thus no distinction is to be made between, for example, transactions at 
a cage, cashier, or other central facility, and chip purchases or 
redemptions from club runners or from dealers or other operators of 
specific games.
    Each card club would also be required, like a casino, to maintain, 
and to retain, certain records relating to its operation, including 
records identifying account holders (see 31 CFR 103.36(a)), records 
showing transactions for or through each customer's account (see, 
generally, 31 CFR 103.36(b)), and records of transactions involving 
persons, accounts or places outside the United States. See 31 CFR 
103.36(b)(5). Records of transactions of more than $3,000 involving 
checks or other monetary instruments and records that are prepared or 
used by a card club to monitor a customer's gaming activity are also 
among the types of records that would be required to be maintained. See 
31 CFR 103.36 (b)(8) and (b)(9). (A specific record retention 
requirement, applicable only to card clubs, is discussed below.) 
Finally, card clubs would be required to institute training and 
internal control programs to assure and monitor compliance with the 
Bank Secrecy Act. See 31 CFR 103.36(b)(10) and 103.54(a).11
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    \11\ In addition, Treasury intends to issue regulations to 
require classes of non-bank financial institutions, including gaming 
establishments, to file reports of suspicious transactions. See 31 
U.S.C. 5318(g)(1).
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    Card clubs within the scope of the proposed rule will in any event 
remain subject to the filing requirements of section 6050I of the 
Internal Revenue Code, with respect to their gaming and financial 
services operations, until the proposals made by this document become 
effective as a final rule. See section 6050I (a) and (c) of the 
Internal Revenue Code, 26 U.S.C. 6050I(a) and (c), and Treas. Reg. 
1.6050I-1(d)(2). Section 6050I of the Code will continue to apply to 
any non-gaming and non-financial services operations (for example 
restaurant service), at card clubs that become subject to the Bank 
Secrecy Act.

D. Additions to Record Retention Requirements

    The proposed rule contains one new record retention requirement, 
applicable only to card clubs. A proposed new paragraph (11) of 31 CFR 
103.36(b) would require card clubs to retain, for five years, all 
currency transaction logs, multiple currency transaction logs, and cage 
control logs that the clubs maintain in their business operations. This 
requirement is proposed to assure an adequate basis for the audit of 
compliance or review of compliance by card clubs with the Bank Secrecy 
Act; the restriction of the requirement to card clubs reflects the 
absence for such clubs of a state regulatory scheme under whose terms 
similar records would already be required to be maintained.

E. Request for Comments on Specific Subjects

    FinCEN recognizes that card club operations are not uniform 
throughout the United States, and it is keenly aware of the need to 
proceed thoughtfully in adopting the rules of the Bank Secrecy Act to 
the realities of those operations. FinCEN specifically seeks comment on 
the following questions:
    1. Are there particular parts of the Bank Secrecy Act regulations 
applicable to casinos generally that cannot or should not be applied to 
card clubs?
    2. What types of financial services, other than gaming, are offered 
by card clubs?
    3. Do any elements of the operation of card clubs on tribal lands 
justify different treatment for such clubs than for other card clubs? 
Are specific rules necessary to take account of situations in which 
card clubs operate in Class II facilities that offer several different 
Class II gaming activities?
    4. How can compliance with the Bank Secrecy Act by tribal card 
clubs best be examined and enforced?
    In seeking guidance on these and other issues raised by this notice 
of proposed rulemaking, FinCEN is interested in hearing from all 
parties potentially affected by the proposed rules, including operators 
of card clubs, officials of jurisdictions in which card clubs are 
located, and Indian tribes on whose lands card club gaming is 
conducted.
    Treasury is continuing to consider issues affecting the application 
of the Bank Secrecy Act to the gaming industry generally. Those issues 
include whether special rules should be applicable to small gaming 
establishments, and how best to implement with respect to gaming 
establishments the general provisions added to the Bank Secrecy Act by 
the Annunzio-Wylie Anti-Money Laundering Act of 1992, Title XV of the 
Housing and Community Development Act of 1992, Pub. L. 102-550, and the 
Money Laundering Suppression Act.

Proposed Effective Date

    The amendments to 31 CFR Part 103 proposed in this notice of 
proposed rulemaking will become effective 90 days following publication 
in the

[[Page 67264]]

Federal Register of the final rule to which this notice of proposed 
rulemaking relates.

Special Analyses

    It has been determined that this notice of proposed rulemaking (i) 
is not subject to the ``budgetary impact statement'' requirement of 
section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4), and (ii) is not a significant regulatory action as defined in 
Executive Order 12866. It is not anticipated that this proposed rule, 
if adopted as a final rule, will have an annual effect on the economy 
of $100 million or more. Nor will it, if so adopted, affect adversely 
in a material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or state, 
local or tribal governments or communities. The proposed rule is 
neither inconsistent with, nor does it interfere with, actions taken or 
planned by other agencies. Finally, it raises no novel legal or policy 
issues.
    A ``description of the reasons why action by the agency is being 
considered'' and a ``succinct statement of the objectives of, and legal 
basis for, the proposed rule''--all as required by 5 U.S.C. 553(b)--are 
found elsewhere in this preamble.

Paperwork Reduction Act

    The proposed rule would add a new paragraph (b)(11) to section 
103.36 to require card clubs to retain records, created in the ordinary 
course of business, (i) of currency transactions (for example, currency 
transaction logs and multiple currency transaction logs) and (ii) of 
all activity at card club cages or similar facilities, including, 
without limitation, cage control logs. FinCEN believes that, as a 
matter of usual and customary business practice, card clubs collect and 
maintain information about currency and cage transactions conducted by 
their customers; proposed paragraph (b)(11) would require simply that 
such records be retained for at least five years (the generally 
applicable Bank Secrecy Act record retention period). FinCEN thus 
believes that the retention requirement of proposed 103.36(b)(11), the 
only new retention requirement in the proposed rule, would impose a 
minimal additional burden on the card club industry. Nevertheless, 
because proposed 103.36(b)(11) is a recordkeeping obligation not 
presently found in 31 CFR Part 103, FinCEN hereby presents the 
following information concerning the retention of information on 
currency and cage transactions, in accordance with requirements of the 
Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq., to assist 
those persons wishing to comment on the proposed information retention 
requirement.

Proposed Collection Retention Requirement

    Description of Respondents: All card clubs conducting transactions 
in currency and cage transactions with their customers and creating 
records of such transactions in the ordinary course of business.
    Frequency: Each time a currency or cage transaction is recorded.
    Estimated Number of Currency and Cage Transactions: Unknown.
    Estimate of Total Annual Burden on Card Clubs: Recordkeeping burden 
estimate = approximately 686 hours per year.
    Estimate of Total Annual Cost to Card Clubs for Hour Burdens: Based 
on $20 per hour, the total cost of compliance with the proposed 
recordkeeping rule is estimated to be approximately $14,000.
    Estimate of Total Other Annual Costs to Respondents: None.
    FinCEN specifically invites comments on the following subjects: (a) 
Whether the proposed collection of information is necessary to further 
the purposes of the Bank Secrecy Act, including whether the information 
retained shall have practical utility; (b) the accuracy of FinCEN's 
estimate of the burden of the proposed collection of information; (c) 
ways to enhance the quality, utility, and clarity of the information to 
be retained; and (d) ways to minimize the burden of the collection of 
information on the affected industry, including through the use of 
automated storage and retrieval techniques or other forms of 
information technology.
    In addition, the Paperwork Reduction Act of 1995, supra, requires 
agencies to estimate the total annual cost burden to respondents or 
recordkeepers resulting from the retention of information. Thus, FinCEN 
also specifically requests comments to assist with this estimate. In 
this connection, FinCEN requests commenters to identify any additional 
costs associated with the retention of the information covered by the 
requirement.
    The information collection in the proposed rule has been submitted 
to the Office of Management and Budget for review under section 3507(d) 
of the Paperwork Reduction Act of 1995. Comments on the proposed 
collection may be directed to the Office of Information and Regulatory 
Affairs of OMB, attention: Desk Officer for the Treasury Department. 
Responses to this request for comments from FinCEN will be summarized 
and included in the request for Office of Management and Budget 
approval. All comments will become a matter of public record.

Drafting Information

    This notice of proposed rulemaking was prepared in FinCEN's Office 
of Legal Counsel, with the participation of staff members of FinCEN's 
Office of Regulatory Policy and Enforcement.

List of Subjects in 31 CFR Part 103

    Authority delegations (Government agencies), Banks, banking, 
Currency, Foreign banking, Gambling, Investigations, Law enforcement, 
Reporting and recordkeeping requirements, Taxes.

Proposed Amendments to the Regulations

    Accordingly, 31 CFR Part 103 is proposed to be amended as follows:

PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND 
FOREIGN TRANSACTIONS

    1. The authority citation for Part 103 continues to read as 
follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5330.

    2. Section 103.11 is amended by redesignating paragraphs (n)(8) and 
(n)(9) as paragraphs (n)(9) and (n)(10), respectively, and by adding 
new paragraphs (n)(7)(iii) and (n)(8) to read as follows:


Sec. 103.11  Meaning of terms.

* * * * *
    (n) * * *
    (7) * * *
    (iii) Any reference in this Part, other than in this paragraph 
(n)(7) and in paragraph (n)(8), to a casino shall also include a 
reference to a card club, unless the provision in question contains 
specific language varying its application to card clubs or excluding 
card clubs from its application.
    (8)(i) Card club. A card club, gaming club, card room, gaming room, 
or similar gaming establishment that is duly licensed or authorized to 
do business as such in the United States, whether under the laws of a 
State, of a Territory or Insular Possession of the United States, or of 
a political subdivision of any of the foregoing, or under the Indian 
Gaming Regulatory Act or other federal, state, or tribal law or 
arrangement affecting Indian lands (including, without limitation, an 
establishment operating on the assumption or under the view that no 
such authorization is required for

[[Page 67265]]

operation on Indian lands for an establishment of such type), and that 
has gross annual gaming revenue in excess of $1,000,000. The term 
includes the principal headquarters and every domestic branch or place 
of business of the establishment. The term ``casino,'' as used in this 
Part shall include a reference to ``card club'' to the extent provided 
in paragraph (n)(7)(iii).
    (ii) For purposes of this paragraph (n)(8), ``gross annual gaming 
revenue'' means the gross revenue derived from or generated by customer 
gaming activity (whether in the form of per-game or per-table fees, 
however computed, rentals, or otherwise) and received by an 
establishment, during either the establishment's previous business year 
or its current business year. A card club that is a financial 
institution for purposes of this Part solely because its gross annual 
revenue exceeds $1,000,000 during its current business year, shall not 
be considered a financial institution for purposes of this Part prior 
to the time in its current business year when its gross annual revenue 
exceeds $1,000,000.
    3. Section 103.36 is amended by adding a new paragraph (b)(11) to 
read as follows:


Sec. 103.36  Additional records to be made and retained by casinos.

* * * * *
    (b) * * *
    (11) In the case of card clubs only, records of all currency 
transactions by customers, including without limitation, records in the 
form of currency transaction logs and multiple currency transaction 
logs, and records of all activity at cages or similar facilities, 
including, without limitation, cage control logs.
* * * * *
    Dated: December 16, 1996.
Stanley E. Morris,
Director, Financial Crimes Enforcement Network.
[FR Doc. 96-32396 Filed 12-19-96; 8:45 am]
BILLING CODE 4820-03-P