South Korea Casino Operator Fined over $2M for AML Failures
LISTEN TO THIS ARTICLE:Kangwon Land Inc, the operator of South Korea's only casino accessible to locals, has been fined KRW3.23 billion (US$2.39 million) by the country's Financial Intelligence Unit (FIU) for violating anti-money laundering (AML) regulations. The casino company opted to settle the penalty in June by paying KRW2.58 billion, reflecting a roughly 20-percent discount as it chose not to challenge the findings presented by the FIU.
Extensive Regulatory Failures
During a National Assembly hearing, Kangwon Land Inc faced 181 cases of violation related to customer due diligence linked to its Kangwon Land casino in Jeongseongun. Allegedly, the company neglected to verify customer-identity information in instances involving casino chip sales or jackpot wins. Additionally, one case involved purportedly false information in connection with a customer registration.
The violations in customer due diligence included accusations of failing to verify the source of transaction funds for 23 customers, "randomly" altering information for 16 customers, deleting information for 158 customers, and violating the mandatory requirement to retain relevant customer records for a period of five years.
Notably, Kangwon Land Inc received its lowest-ever grade, a "D," in the government's annual "public organization performance evaluation" in June of this year. The combination of the AML fines and the diminished performance rating highlights the challenges faced by the casino operator, signaling potential repercussions for its standing in the industry and its regulatory compliance measures.
This is the second time that the FIU has gone after casinos for AML failures this year. The Daegu Casino was hit with a KRW1.05 billion (US$776,512) fine in September for not complying with regulations.
Kangwon Land Hurting South Korea's Casino Image
Kangwon Land Casino holds a unique position as the country's sole casino accessible to locals. Located in the Kangwon Province, the casino is nestled within the Kangwon Land Complex, a resort that offers a variety of entertainment and leisure options.
Opened in 2000, Kangwon Land Casino has since become a popular destination for those seeking a mix of gaming excitement and natural beauty. Beyond the gaming offerings, Kangwon Land also provides a range of amenities such as restaurants, bars, and entertainment facilities, creating a comprehensive entertainment experience for guests.
Kangwon Land Inc has faced regulatory scrutiny and financial penalties related to AML violations, as evidenced by the large fines imposed by South Korea's FIU. This aspect adds a layer of complexity to the casino's operations, highlighting the broader challenges faced by the gaming industry in maintaining regulatory compliance while delivering a compelling experience for patrons.
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