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FIC urges apt regulation of Casinos to counter money laundering, terrorism financing

FINANCIAL Intelligence Centre says casinos must be properly regulated to counter money laundering and terrorism financing.

FIC compliance and prevention director Diphat Tembo said there was need to have a national gaming authority that has experts and trained inspectors with knowledge to regulate the operations of the casinos in the country.

Speaking to The Mast, during a three-day virtual workshop on “life cycle of casino, financial investigation and prosecution” organised by AGA-African Partnership for Justice and Financial Intelligence Centre – Zambia in Lusaka, Tembo said casinos were viable business ventures that could contribute to the country’s gross domestic product (GDP) if properly managed.

“They are supposed to generate income for themselves as casino business but also as a country we need to tax them and we should be able to tax casinos and be able to say, out of whatever happened through the year, this is what the casinos have contributed to the treasury,” he said.

“Currently, we have got 38 casinos that are operating in Zambia, that is a huge number. For example, in Mozambique, they have about five casinos. If you look at how they are managed and how much they are contributing to the national treasury, it is amazing. They are only five but if you look at the licensing fees, they are huge.”

Tembo insisted that licensing of casinos in Zambia should be revised to control and monitor what was going in and out.

“Apart from looking at money laundering and countering financing of terrorism, what are we realising in terms of revenues that are coming from 38 casinos operating in Zambia? How much are they contributing to the national treasury? I think there is need for an overhaul. For me the process to come up with national gaming authority that is going to come up with experts, inspectors, people that understand the industry, I think that will do a great deal,” he said.

Asked on how much Zambia was losing through financial crimes happening through casinos, Tembo said nothing had been quantified yet.

However, he said casinos were being suspected to be used in financial terrorism.

“If casinos had controls in place, if they had been reporting current transaction reports as well as suspicious transactions, we should be able from the FIC, to probably quantify a bit of some figures,” Tembo said. “Even if we do not have a figure, if there are no controls in these institutions, which other competent authorities such as law enforcement agencies, the Financial Intelligence Centre and others have identified, that this sector is not properly regulated… Even if you don’t have figures, definitely that institution, that sector can be abused and I do believe that casinos are susceptible to be abused. If we had control in that sector and the sector is properly regulated, we should be having statistics but today if you tell me, from the 38 casinos, how much in terms of currency transactions, how much has been reported in that sector, even ourselves as FIC we are not seeing that coming through.”

Tembo said there was need to up the game to ensure that there was control on what was going and leaving the casino business.

He said any cash transaction above US $10 million has to be reported to the Financial Intelligence Centre.

“Casinos are a cash-based transaction industry, and there is a lot of cash that is going in. If that is not reported, the question of saying are we losing that money can be answered in the affirmative. That yes, because no hindrance to that regulation to report then there is that loss which is going on. I do believe this is one of the sectors that we need to up the game as a country but also as a competent institution,” said Tembo.

The Zambia Tourism and Hospitality (Casino) Regulations No.93 of 2016 mandates casino operators to obtain a license from the ministry to run gambling facilities in the country.

However, recently auditors estimated that the state has suffered a 37,000 pounds loss of revenue due to some casinos operating without licences.

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