Yes, if the ATM terminal continues to dispense cash from customers’ bank accounts, your customer should maintain its registration as a nonbank ATM with the Illinois Department of Financial and Professional Regulation.
Because your customer now is operating a video gaming terminal, we do recommend some heightened monitoring due to the many requirements in the Video Gaming Act and the Illinois Gaming Board’s administrative rules. For example, the Illinois law requires video game terminal operators to deposit revenues into “a specially created, separate bank account” for making electronic tax payments.
Video gaming terminals also entail heightened risks that likely necessitate additional BSA/AML monitoring and enhanced due diligence. For example, as described in an FFIEC publication, video gaming terminals may be used to launder money. As a result, you may want to recharacterize this customer as a higher-risk customer for BSA/AML purposes.
For resources related to our guidance, please see:
- Electronic Fund Transfer Act (Illinois), 205 ILCS 616/30 (“A person other than a financial institution or an affiliate of a financial institution may establish or own, in whole or in part, a cash-dispensing terminal at which an interchange transaction may be performed, provided that the terminal does not accept deposits of funds to an account, and provided that the person establishing or owning the terminal shall file a notice of establishment or ownership of a terminal with the Commissioner, in the form prescribed by the Commissioner . . . .”)
- Electronic Fund Transfer Act (Illinois), 205 ILCS 616/10 (“‘Interchange transaction’ means an electronic fund transfer that results in exchange of data and settlement of funds between 2 or more unaffiliated financial institutions.”)
- Electronic Fund Transfer Act (Illinois), 205 ILCS 616/10 (“‘Terminal’ means an electronic device through which a consumer may initiate an interchange transaction. This term does not include . . . (4) an electronic device owned or operated by a seller of goods and services unless the device is connected either directly or indirectly to a financial institution and is operated in a manner that provides access to an account by means of a personal and confidential code or other security mechanism (other than signature) . . . .”)
- Electronic Fund Transfer Act (Illinois), 205 ILCS 616/10 (“‘Account” means a demand deposit, savings deposit, share, member, or other customer asset account ‘held by a financial institution.”)
- Video Gaming Act, 230 ILCS 40/60(c) (“Revenues generated from the play of video gaming terminals shall be deposited by the terminal operator, who is responsible for tax payments, in a specially created, separate bank account maintained by the video gaming terminal operator to allow for electronic fund transfers of moneys for tax payment.”)
- Illinois Gaming Board Administrative Rules, 11 Ill. Adm. Code 1800.250(i) (“In addition to all other duties and obligations required by the Act and this Part, each licensed terminal operator has an ongoing duty to comply with the following: . . . (i) Maintain a single bank account for all licensed video gaming locations with which it contracts for deposit of aggregate revenues generated from the play of video gaming terminals and allow for electronic fund transfers for tax payments . . . .)
- Illinois Gaming Board, Video Gaming Page and FAQs
- Money Laundering Threat Assessment (December 2005), printed page 52 (“Criminals laundered money through video poker games by feeding illicit proceeds into the machines (one, five, and ten dollar bills) and then either after playing briefly or not at all, they pressed the ‘cash out’ button which generated a receipt that was redeemed for a casino check.”)