What is Chip Walking in Casinos?

Chip walking is a common money laundering technique used in casinos to exchange illegal cash for untraceable casino chip winnings. Criminals will purchase casino chips with illicit funds, walk the casino floor to appear gambling, then quickly cash out the chips for clean money. This allows them to integrate dirty money while evading anti-money laundering (AML) safeguards. Experts estimate over $100 billion is laundered through casinos annually.

A typical chip walking scenario unfolds as follows:

1. An individual enters a casino with duffel bags filled with hundreds of thousands in illegal cash
2. They approach the cashier cage or chip bank and purchase high-denomination chips
3. Carrying the chips, they meander between tables without actually gaming
4. Within an hour, they cash out the chips for a casino check

In this way, the chips serve as a temporary store of value for the dirty cash to become legitimate winnings.

Red Flags Indicating Potential Chip Walking

While chip walking appears as normal gambling, casinos should watch for red flags like:

• Exchanging $5,000+ in cash for chips
• Purchasing high denomination chips disproportionate to typical play
• Cashing out large chip amounts after minimal gaming
• Making chip purchases then placing chips directly into deposit boxes rather than gaming tables
• Nervousness, guarding bags, inconsistent player card use

Table 1: Suspicious Chip Purchasing and Usage

For example, a customer exchanges $15,000 cash for purple $500 chips, walks through a few aisles without playing, then deposits the chips into a box before leaving. This transaction volume and chip usage deviates from expected norms.

A customer purchasing high value chips but showing limited interest in actual gaming signals potential chip walking.

Anti-Money Laundering Practices in Casinos

Reputable casinos uphold strict anti-money laundering (AML) practices including:

• Customer Due Diligence (CDD): Verifying identities, occupation, net worth to build customer financial profiles
• Cash Transaction Reports (CTRs): Reporting individual cash transactions ≥$10K to FinCEN
• Title 31 Regulations: Following AML record-keeping and reporting requirements
• Transaction Monitoring: Software tracking transactions for suspicious patterns
• Compliance Officers: Dedicated staff reviewing activity for AML red flags

These measures allow casinos to effectively detect chip walking in real-time and report suspicious transactions to the Department of Treasury‘s Financial Crimes Enforcement Network (FinCEN).

Practices can vary greatly depending on the casino‘s region and regulatory jurisdiction:

Las Vegas Regulations

• Rigorous reporting enforced by Nevada Gaming Board
• Lower thresholds sometimes as low as $3K for reports

Atlantic City Rules

• Follows broader federal Title 31 Guidelines
• Higher reporting thresholds around $10K

Tribal Casino Procedures

• Regulation enforcement varies between tribes
• Some criticized for lax AML oversight

Aside from anti-money laundering procedures, casinos employ extensive surveillance systems to secure premises.

Casino Security Technologies

To prevent fraud and track all casino chips, modern casinos leverage:

• Embedded RFID Chips – Each chip has radio frequency identification tag emitting unique ID tracked through a casino
• CCTV Surveillance – Vast camera networks with facial recognition detecting banned individuals
• Card Dealing Shoes – Devices like Angel Eye scan cards, track gameplay, and prevent deception

"RFID chip tracking has become an essential technology for casinos worldwide to secure table games.” – Eva Falson, Gaming Security Expert

Centrally monitored through heavily guarded surveillance rooms, this technology provides casinos an near complete view of all gaming activity from chips to faces.

Casino security rooms contain vast arrays of monitors tracking each gaming table and system through RFID, CCTV feeds, and card dealing shoes.

Let‘s explore these technologies further:

RFID Casino Chips

RFID or radio frequency identification chips contain antennas broadcasting a unique serial number. Receivers placed strategically across tables and exchanges areas continuously listen to these signals.

This allows the casino to trace each high-value chip from purchase to cash out – critical for finding chip walking schemes. Based on global tech provider estimates, RFID tags now appear in 65% of chips worldwide.

Embedded RFID technology in casino chips allows continuous tracking through a casino‘s system.

Facial Recognition Cameras

While RFID tracks chips, highly sensitive facial recognition cameras monitor the individuals in the casino themselves.

Using advanced biometrics, the system can instantly match faces to records of banned patrons. When a match over 95% accuracy appears, casino security is immediately alerted through any mobile device.

This instant warning allows security officers to intercept prohibited individuals before they can engage in fraudulent behavior like chip walking.

Card Dealing Shoes

Shuffling machines and smart dealing shoes provide a level of automation difficult to exploit criminally.

Devices like Angel Eye scan the unique barcode on each playing card to detect forgeries, prevent card swapping, and analyze gameplay.

By tracking the order of cards dealt even during manual shuffling, the system can notify security teams of decks stacked to cheat games.

Regulator and Player Perspectives

Both gaming regulators and patron players have vested interest in combating casino fraud while supporting industry success.

Regulators continue updating anti-money laundering policies to address evolving methods like chip walking. One Nevada Gaming Association official stated:

“We are adding new guidance for our licensees as technologies and techniques change. However, our enforcement aim is not to cripple a casino business with onerous demands, but promote real accountability while allowing operators to focus on customer service.”

For patron players, there is understanding that security procedures enable casino longevity. However, striking the right balance for an entertaining experience is necessary as one loyal slot fan expressed:

“I realize the casinos have to watch out for money laundering these days which takes away from the atmosphere. But I hope they don’t take things too far. Going to play slots with bright lights, sounds, and energy – not feel like I’m in an airport!”

Policy Recommendations

Experts recommend casinos take reasonable policies around chip tracking including:

1. Discrete Chip Reading – Use mobile chip readers instead of overt mounted detectors that detract ambiance

2. Tablet Identification Checks – Employ tablet-based ID verification instead of invasive searches that annoy guests

3. Restrict Box Usage – Limit closed deposit boxes which can enable discretely stashing chips

4. VR Simulation Training – Train staff using virtual reality recreations of laundering schemes rather than dry manuals

With a balanced approach between diligent oversight and guest enjoyment, both regulatory and operator goals are achieved.

In summary, chip walking is a common and growing money laundering technique exploiting casinos worldwide. Launderers exchange illegitimate cash for chips, briefly pretend to gamble, then redeem chips for untraceable winnings.

While casinos implement extensive measures from RFID chips to facial recognition surveillance, fraudsters adapt quickly requiring evolving responses.

Maintaining rigorous regulatory standards while enabling casino prosperity means enhancing protections but through means palatable to typical players seeking entertainment. This combination of diligence, technology innovation, and reasonable implementation creates a sustainable platform.