Gambling Winnings Reporting Requirements
For example, if you hit the trifecta on Derby Day, you must report the winnings as income. The second rule is that you can’t subtract the cost of gambling from your winnings. For example, if you win $620 from a horse race but it cost you $20 to bet, your taxable winnings are $620, not $600 (after subtracting your $20 wager). You must report all gambling winnings (including lotteries, raffles) on line 21, Schedule 1, Form 1040 as ‘Other Income’) including winnings that aren’t reported on a Form W-2G.pdf. When you have gambling winnings, you may be required to pay an estimated tax on that additional income.
This document provides guidance interpreting the requirements of the Bank Secrecy Act ('BSA') regulations1 as they apply to the casino and card club industries in the United States. We additionally published frequently asked questions for casinos and card clubs as FIN-2007-G005 on November 14, 2007. Casinos and card clubs may continue to rely on the guidance contained in FIN-2007-G005, which has not been incorporated into this publication.
Section A: 31 C.F.R. § 103.11 Casino and Card Club DefinitionsQuestion 1: Do Nevada slot route operators operate 'casinos' for purposes of rules implementing the BSA?
Answer 1: A Nevada slot route operator is a gaming licensee who, pursuant to a participation agreement, owns and maintains slot machines at three or more business establishments. The business establishments are owned and operated by other persons.2 While it is common for Nevada slot route operators to lease space from a property owner (usually referred to as a 'space lease agreement'), and to pay a monthly rental payment to such a landlord, the Nevada slot route operator may have its own 'nonrestricted' license to conduct gaming on the premises.3 A Nevada slot route operator with a 'nonrestricted ' license to conduct gaming at a business establishment would be operating a 'casino' at the business establishment for purposes of FinCEN's BSA rules,4 if gross annual gaming revenue of its operations at the business establishment exceeds $1 million.5 Question 2: Are gaming or gambling establishments with gross annual gaming revenue of $1,000,000 or less subject to any BSA requirements?
Answer 2: Yes. The requirement to file a FinCEN/IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, for currency6 received in a trade or business applies to businesses that are not casinos or financial institutions under FinCEN's rules. The term 'cash' for Form 8300 reporting purposes includes coin and currency of the United States or any other country, and may include cashier's checks, bank drafts, traveler's checks, or money orders received over $10,000 in one transaction (or two or more related transactions) during a 12-month period.7 For purposes of illustration, the following gaming and gambling establishments or nongaming related businesses normally would be subject to Form 8300 requirements:8 (i) casinos or card clubs with gross annual gaming revenue of $1,000,000 or less; (ii) tribal bingo halls, off-track betting parlors, greyhound tracks, horse race tracks, or (iii) a casino hotel, gift shop, cater/banquet service, conference/seminar facilities,10 etc. The BSA prohibits any person from structuring transactions to evade reporting or recordkeeping requirements under the BSA.11 Section B: 31 C.F.R. § 103.22 Currency Transaction Reporting RequirementsQuestion 3: What is the definition of a gaming day and what effect does it have on aggregating a customer's reportable currency transactions?
Answer 3: A gaming day is defined as the normal business day of a casino or card club. If a casino or card club offers 24-hour gaming, the term 'gaming day' means that 24-hour period by which a casino or card club keeps its books and records for business, accounting, and tax purposes.12 A casino or card club must have only one gaming day, which is common to all its gambling operating divisions or departments. Maintaining one gaming day facilitates the aggregation of transactions for purposes of currency transaction reporting.Question 4: Is a card club required to file FinCEN Form 103, Currency Transaction Report by Casinos ('CTRC'), for customer currency buy-ins at poker games?
Answer 4: Yes. When a customer at a poker table buys-in13 for more than $10,000 in chips with currency, in a single transaction or a series of related transactions in the same gaming day, a card club must assure compliance with CTRC requirements for such transactions. The same would apply to other non-house banked card games (e.g., games commonly referred to as 'California Games'14 in certain card clubs or card rooms). If the card club has knowledge of the transactions, it must report the transactions on a CTRC.15
A card club must implement a program reasonably designed to assure compliance with the BSA.16 For the reporting of transactions in currency, regardless of whether a card club has a multiple transaction log, it must have a system of internal controls, procedures for using all available information to determine and verify, when required, the name, address, Social Security or Taxpayer Identification Number, and other identifying information for a person, as well as train personnel.17
In addition, BSA rules impose record retention requirements on card clubs.18 These requirements are independent of the requirement to implement a program for ensuring compliance with the BSA. FinCEN understands that many card clubs have internal controls that include a multiple transaction log to record currency transactions above a given threshold (usually $2,500 - $3,000). A card club that prepares or uses records of currency transactions, including currency transaction logs or multiple currency transaction logs, must retain the records.19 Also, the record retention requirement applies to transactions conducted in card or poker rooms located within the facilities of casinos. Also, please note that to comply with regulations implementing the BSA, card clubs may need to prepare and retain records not otherwise produced in the ordinary course of business.20 Similarly, a casino that prepares or uses multiple transaction logs or other records for monitoring the gaming activity of a customer (e.g., in a poker room) must retain the records.21Question 5: Must a casino or card club have an internal control for customer chip redemptions at a cage?
Answer 5: Yes. Casinos and card clubs are required to develop and implement written programs that are reasonably designed to assure compliance with all applicable BSA requirements. This includes establishing internal controls22 to monitor compliance with currency transaction reporting requirements with regard to known customers. Neither 31 C.F.R. § 103.22(b)(2) nor (c)(3) states specifically that a casino or a card club must create a record of transactions that are less than $10,000, a casino or card club would need an effective internal control for customers (known or unknown).23 Therefore, to be able to identify large chip redemptions at a reasonable threshold under $10,000 that were paid with currency that may have been structured to avoid reporting requirements or otherwise to obscure large cash out transactions, a casino or card club must have an internal control for customer chip redemptions at a cage. A casino or card club must aggregate customer currency transactions that occur on the floor or the cage, when it has obtained knowledge of such transactions either from examining records or actual knowledge (including of large chip redemptions for currency).24 For similar reasons, a casino would need a method for identifying large redemptions at a reasonable threshold under $10,000 of a betting ticket, token, or 'TITO' ticket25 that were paid with currency to a known customer.26
Question 6: To what extent is a casino required to aggregate credit card advances with other types of cash out transactions for currency transaction reporting purposes?
Answer 6: A casino is required to file a CTRC on currency transactions by or on behalf of any customer that, alone or when aggregated, exceed $10,000 in a gaming day. A casino must aggregate and report multiple currency transactions when it has knowledge that such transactions have occurred. Therefore, when a customer uses a credit card at an automated teller machine ('ATM') or other cash access devices located in a casino or on casino property,27 and then goes to a cage cashier to receive currency for this advance on credit, such transactions would be subject to currency transaction reporting, and they would need to be aggregated with other cash out transactions in which a casino has obtained knowledge to determine whether they exceeded $10,000 to a customer in a gaming day.
Question 7: Is a casino or card club chip runner, casino floor person, or a casino host required to be listed as an agent on a CTRC when they conduct currency transactions on behalf of customers?
Answer 7: No. When cashing out chips in excess of $10,000 in a gaming day for a customer who is actively gambling, a chip runner28 or a floor person,29 is acting within the scope of employment and is an agent of the card club or casino; they are not agents of a customer with respect to such transactions. Accordingly, the chip runner or floor person would not be listed as an agent of a customer on a CTRC. Similarly, a casino host,30 acting within the scope of employment, is an agent of a casino, when conducting any currency transactions in excess of $10,000 in a gaming day for a customer and would not be listed as an agent of a customer on a CTRC. If these casino or card club employees handle currency transactions in excess of $10,000 for a customer, they would be required to obtain identification information from that customer for completion of a CTRC.
Question 8: When a customer refuses to provide a Social Security Number for completing a CTRC, can a casino or card club write 'Refused' in Item 7 of the CTRC?
Answer 8: No. When a casino or card club has obtained actual knowledge of a reportable currency transaction, it must obtain the identification information (such as customer name, permanent address, and Social Security Number ('SSN')) needed to file a complete and accurate CTRC, and then verify the name and address 'before concluding the transaction.' If the customer's state driver's license does not contain a Social Security Number and the customer does not provide a paper Social Security Number card issued by the Social Security Administration, a casino or card club can enter a verbally provided SSN on a CTRC. Also, FinCEN understands that a casino may have the customer complete an IRS Form W-9, Request for Taxpayer Identification Number and Certification,31 to obtain a person's correct Taxpayer Identification Number32 or, if the customer has a deposit or credit account with the casino, the casino will review the account to obtain the SSN since the SSN is required at the time that the account is opened.33 In all cases, a casino or a card club must file a CTRC for reportable transactions with all of the required identifying information that it has obtained from a customer, government records it maintains and/or other verified internal records.34
Question 9: Are two separately licensed, but jointly-owned riverboat casinos that are operating from the same dock and sharing certain information systems, required to aggregate currency transactions by the same customer that occurred at both casinos?
Answer 9: No. Each casino licensee is a separate financial institution for purposes of complying with currency transaction reporting. Two riverboat casinos that are under common ownership and common management, share certain information systems, maintain similar accounting and internal control procedures, or use the same docking facilities, but which have separate licenses, are not required under 31 C.F.R. § 103.22(b)(2) and (c)(3) to aggregate and report customer currency transactions that occurred at both facilities.35 Nonetheless, for two riverboat casinos with automated data processing systems that are closely integrated, automated programs for compliance with the BSA must provide for the use of these systems to aid in assuring compliance with identifying transactions that appear to be suspicious and that are conducted between the two casinos by known customers36 (e.g., to evade the $10,000 reporting requirement through structuring).37
Question 10: Is a casino required to file a CTRC on customer jackpot wins from casino games other than slot jackpot or video lottery terminal wins?
Answer 10: Yes. A casino is required to file a CTRC on customer jackpot wins paid in currency from casino games other than slot jackpot or video lottery terminal wins.38 These include among other games, bingo (traditional),39 Caribbean stud poker, keno, or let it ride poker.40 These transactions may need to be aggregated with other cash out transactions.
Section C: 31 C.F.R. § 103.21 Suspicious Transaction Reporting Requirements
Question 11: May a casino share information with another casino concerning potential suspicious activity?
Answer 11: Yes, casinos may utilize Section 314(b)41 information sharing to work together to identify money laundering and terrorist financing. Also, casinos can utilize Section 314(b) information sharing with depository institutions and money services businesses. Section 314(b) as implemented by 31 C.F.R. § 103.110, establishes a safe harbor from liability for a financial institution or association of financial institutions that voluntarily chooses to share information with other financial institutions for the purpose of identifying and, where appropriate, reporting money laundering or terrorist activity (if required notification, verification and information security is in place). Section 314(b) permits sharing information relating to transactions that a financial institution suspects may involve the proceeds of one or more specified unlawful activities listed in 18 U.S.C. §§ 1956 and 1957, which include an array of fraudulent and other criminal activities.42 The safe harbor afforded by Section 314(b) is only available to financial institutions that are required to implement an anti-money laundering program, which includes, for example, depository institutions regulated by a federal functional regulator,43 casinos, and money services businesses.44
Section 314(b) does not replace the existing obligations of financial institutions to file suspicious activity reports when required. Please note that the Section 314(b) process cannot be used by a casino to exchange information with another casino about customers conducting non-criminal financial activities, such as card counting. Also, please note that the process cannot be used to share a copy of a filed FinCEN Form 102, Suspicious Activity Report by Casinos and Card Clubs ('SARC') or the fact that it was filed, with another financial institution.45 However, the underlying information in the SAR may be disclosed as long as the existence/fact that a SAR has been filed is not revealed. For additional information on the Section 314(b) voluntary information sharing program, or to submit a notice to FinCEN to share information voluntarily, refer to www.fincen.gov.
Question 12: Is a casino or card club required to file a SARC, or FinCEN Form 109, Suspicious Activity Report by Money Service Business (SAR-MSB), for suspicious money transfers or wire transfers that it receives or sends?
Answer 12: A casino or a card club's requirement to report suspicious activities applies to all types of financial services conducted or attempted by, at, or through a casino or card club. When a casino or card club sells or redeems money transfers or wire transfers within its cage facility, conducted pursuant to a contractual or other arrangement with a money transfer issuer or a bank, it would be required to file a SARC, when it knows, suspects or has a reason to suspect that the transaction or pattern of transactions is both suspicious and involves $5,000 or more. However, if the casino or card club enters into a contractual agreement to lease space within the establishment to a money transfer company and the company's agent(s) operate the business, then the money services business suspicious activity reporting rules would apply and the money transfer company would use FinCEN Form 109 to report suspicious activity.46
Question 13: To what extent should casinos and card clubs use the 'other' box in Item 26 on the SARC to describe the type of suspicious activity?
Answer 13: Item 26 on the SARC contains a list of 16 specific types of suspicious activity. Because suspicious transactions may comprise more than one of the listed types of activities, casinos and card clubs should check as many boxes as are applicable (but be sure to check at least one box). FinCEN encourages casinos and card clubs to refrain from checking box 'q' for 'Other' on the form unless the activity is not covered by the existing list of suspicious activities.47 Please note that casinos and card clubs must complete Part VI, the narrative portion of the form,48 regardless of whether the 'Other' box is checked. FinCEN understands that some casinos and card clubs may have mistakenly interpreted box 'q', 'Other (Describe in Part VI)' to mean that to complete the SARC's 'Narrative,' you must check this box, since it asks a filer to describe the suspicious activity in Part VI. This is incorrect.
Filing forms without checking the appropriate type(s) of suspicious activity or failing to check appropriate boxes describing the types of suspicious activity diminishes their utility to law enforcement and limits FinCEN's ability to sort these particular forms for review and analysis to look for patterns of suspicious activities.
Question 14: What type of records is a casino or card club required to retain to support a SARC that it has filed?
Answer 14: A casino or card club must maintain supporting documentation or business record equivalents49 with a copy of the filed suspicious activity report for five years from the date of filing the report. Typically, such documentation may include canceled checks, confessions, credit bureau reports, credit slips/vouchers, deposit/withdrawal slips, multiple transaction logs, player rating and slot club account records,50 identification credentials, spreadsheets, photographs, surveillance audio and/or video recording media, and surveillance logs.51 For casinos that have hotels, and in the absence of any information other than a customer's name, other supporting documentation may include credit/debit cards, guest folios, and safety deposit box registrations.
Question 15: Once a casino or card club files a SARC, what are its ongoing filing requirements when customers continue to frequent the casino or card club and/or conduct additional suspicious activity?
Answer 15: After a casino or card club files a SARC it should report continuing suspicious activity with a report being filed at least every 90 days.52 This notifies law enforcement of the continuing nature of the activity, and serves as a reminder to the organization that it must continue to review the suspicious activity to determine if other actions may be appropriate.53 This should continue even if a law enforcement agency has declined to investigate or there is knowledge that an investigation has begun, since the information contained in a SARC may be of interest to other law enforcement agencies as well as gaming regulatory agencies.
Question 16: What does the SAR non-disclosure provision mean to a casino or card club that has filed a SARC?
Answer 16: No financial institution, or director, officer, employee, or agent of any financial institution, who reports a suspicious transaction, may notify any person involved in the transaction that the transaction has been reported, including any person identified in the suspicious activity report. Moreover, a filed SARC, as well as information that would reveal the existence of a SARC (including any document, memorandum, record, log, or work papers that references a SARC) must be treated as confidential.54 Therefore, any person subpoenaed or otherwise requested to disclose a SARC or the information that would reveal the existence of a SARC to a source that is not an appropriate law enforcement or regulatory agency, or FinCEN, shall decline to produce the SARC or to provide any information that would reveal the existence of a SARC.55 If a casino or card club does receive a request for SARC information (except for those from an appropriate law enforcement or regulatory agency), it must decline the request and notify FinCEN's Office of Chief Counsel at (703) 905-3590.
Question 17: Can a domestic casino parent or headquarters corporation and its domestic casino affiliates, branches, or places of business consult with each other before filing a SARC?
Answer 17: Yes. Under the SAR non-disclosure provisions, there is nothing prohibiting a domestic casino parent or headquarters corporation and its domestic casino affiliates, branches, or places of business from consulting with each other before a SAR form is filed concerning customer accountholder activity that is occurring at more than one of its casinos as part of their parent-affiliate relationship. Also, this would include discussion or sharing any underlying information about a customer and transaction(s) before a SARC is filed.56 However, a domestic parent or headquarters corporation and its domestic casino affiliates, branches, or places of business cannot disclose to each other that a SAR form will be filed. Moreover, after filing, further disclosure of the fact that a SAR was filed is prohibited except as permitted under 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e).
Question 18: What type of information may a casino or card club disclose in response to a subpoena, summons, or other process issued in civil litigation that involved suspicious activity contained on a filed SARC?
Answer 18: The BSA does not prohibit the disclosure of internal casino or card club records upon which a SARC is based in response to a subpoena, summons, or other process issued in civil litigation, with all the relevant information pertaining to a customer's gambling activity that occurred at a casino or card club. For example, the prohibition against disclosing a SARC (or information that would reveal the existence of a SARC) would not preclude a casino or card club from disclosing,57 internal records such as check cashing account, credit account, deposit account, player rating account, slot club account, customer win/loss statements, monetary instrument logs, multiple transaction logs, audio or video tapes, CD-ROM discs, DVD discs, etc., to a private litigant. Similarly, the prohibition against disclosing SARCs would not prevent the disclosure of BSA records of transmittal of funds or negotiable instruments at or in excess of $3,000 Therefore, whatever information is appropriate and already contained in internal casino or card club records or on other discoverable government records and forms mentioned above can be disclosed in response to a subpoena, summons, or other process issued in civil litigation, except for a SARC form itself or the information that would reveal the existence of the SARC (including any document, memorandum, record, log, or work papers that references a SARC). For assistance with specific requests, please contact FinCEN's Office of Chief Counsel at (703) 905-3590.
Question 19: Since a casino is not required to file a CTRC on slot jackpot or video lottery wins, is it required to file a SARC on slot jackpot or video lottery terminal wins that are suspicious?
Answer 19: Yes. If a casino knows, suspects or has reason to suspect that the transaction or pattern of transactions is both suspicious and involves $5,000 or more (including slot jackpot or video lottery terminals winnings) it must report it as suspicious activity. This is applicable to suspicious activity involving a jackpot win from bingo, Caribbean stud poker, keno, or let it ride poker. The filing requirements pertaining to: (i) IRS Form W-2G, Certain Gambling Winnings; (ii) IRS Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding; or (iii) IRS Forms 1099-Misc, Miscellaneous Income (e.g., pertaining to prizes or awards) are particularly relevant here. See 31 C.F.R. § 103.21(a)(2)(i), which states, among other things, that a transaction requires reporting as suspicious if it is '. . . to avoid any transaction reporting requirement under federal law or regulation.' For example, a casino may attempt to complete an IRS Form W-2G or an IRS Form 1042-S for a customer's slot jackpot or video lottery terminal win of $5,000 or more and a customer may: (i) fail to provide customer identification; (ii) furnish a legitimate type of identification document that a casino believes is false or altered (e.g., address changed, photograph substituted); (iii) furnish a legitimate type of identification document in which the description of the individual does not match the customer's appearance (e.g., different age, height, eye color, gender); (iv) present conflicting identification information (e.g., different address or different spelling or numeration in address; different state driver's license number, or different Social Security Number).
Section D: 31 C.F.R. § 103.36 Casino Recordkeeping Requirements
Question 20: When recordkeeping requirements are similar, except for the dollar thresholds, for casinos as well as all financial institutions, which requirements apply to a casino or card club?
Answer 20: Our rules at 31 C.F.R. § 103.33 list certain records that must be made and retained by all financial institutions including casinos and card clubs. Rules implementing the BSA also include certain recordkeeping requirements specifically for casinos or card clubs. These are set forth in 31 C.F.R. § 103.36. Where the dollar threshold differs between the two provisions, a casino or card club must keep records based on the lower threshold. For example, 31 C.F.R. § 103.36(b)(4) requires casinos and card clubs to retain a record of each extension of credit in excess of $2,500, including a customer's identification and the verification of that identification, despite the fact that the requirement regarding extensions of credit in 31 C.F.R. § 103.33(a) is tied to a threshold of more than $10,000. Also, although the requirements in 31 C.F.R. § 103.33(f) apply to non-bank financial institutions for transmittals of funds in the amount of $3,000 or more, please note that pursuant to 31 C.F.R. § 103.36(b)(5) casinos and card clubs must retain records for international wire transfers at any monetary value. Therefore, when a casino or card club complies with 31 C.F.R. § 103.36(b)(5),58 it has satisfied the requirement for 31 C.F.R. § 103.33(f).
Question 21: If a casino scans or microfilms its player rating records, is it required also to keep the paper copy of the record?
Answer 21: No. The BSA requires the retention of the source records (either the originals or microfilm version, or other copies or reproductions of the documents) of all records required to be retained by 31 C.F.R. Part 103. This would include, among other customer records, records prepared or used to monitor a customer's gaming activity (e.g., player rating records, multiple transaction logs). As a reminder, scanned or microfilmed player rating records must be retained for 5 years and filed or stored in such a way as to be accessible within a reasonable period of time.
Question 22: Does a casino or card club have to record a customer's permanent address for BSA recordkeeping requirements or is a P.O. Box number acceptable when it appears on a customer's state driver's license or identification card?
Answer 22: To comply with 31 C.F.R. §§ 103.33(f), 103.36(a), 103.36(b)(1), 103.36(b)(4), 103.36(b)(5), and 103.36(b)(9), casinos and card clubs are required to use due diligence measures to obtain a customer's permanent address.59 This means casinos and card clubs are required to obtain and record a customer's permanent address (i.e., permanent street address, city, state name or two-letter state abbreviation used by the U.S. Postal Service, and ZIP code, including any apartment number or suite number and road or road number associated with a permanent address) to comply with these recordkeeping requirements. If a customer is from a foreign country, the state/territory name (or state/territory code) (i.e., Canada and Mexico) and the appropriate country name (or two-letter country code) should be obtained. A casino or card club is required to use all reasonably available information or reasonable alternatives to obtain the needed information to be in compliance with the BSA and should not enter a P.O. Box number unless the customer has no street address. If a customer's state driver's license or identification card contains a P.O. Box number, casinos and card clubs would need to ask a customer for his/her permanent street address. If a customer states he/she has a permanent address, but refuses to provide it, and a casino and card club conducts the transaction, they would not be in compliance with these BSA recordkeeping requirements.60 However, if a casino or card club uses due diligence to obtain a customer's permanent address61 and determines that a customer does not have a permanent address, then a casino can record a customer's P.O. Box number without concern of non-compliance with the above BSA recordkeeping requirements. Nonetheless, in the case when a reportable currency transaction occurs, a casino and card club must file a CTRC involving a cash in and/or cash out.
Section E: 31 C.F.R. § 103.64(a) Compliance Program Requirements
Question 23: Must a casino's anti-money laundering compliance officer limit his duties to BSA compliance matters?
Answer 23: No. Although the BSA requires financial institutions, including casinos or card clubs, to designate an individual or individuals (e.g., a compliance officer and/or compliance committee) as responsible for ensuring that institution's day-to-day compliance with the BSA, the anti-money laundering program requirement permits flexibility by allowing each compliance program to address the characteristics of a particular casino or card club. Each casino and card club should conduct a risk-based analysis of its business (e.g., type of products and services it offers, the locations it serves, and the nature of its customers) to determine, among other things, whether it needs a full-time BSA compliance officer.
Question 24: How can a casino's compliance committee help to assure that a casino complies with the BSA?
Answer 24: Casinos and card clubs are not required under the BSA to establish compliance committees in all instances. Nonetheless, there may be instances in which the risk confronting a casino or a card club would require establishing a BSA compliance committee. FinCEN understands that casinos establish BSA compliance committees as an executive level safeguard to ensure that a casino complies with all applicable laws, regulations, and guidance in a reasonable manner.62
Section F: Other Casino Issues
Question 25: What are the civil penalties for non-compliance with BSA recordkeeping and reporting requirements?
Answer 25: FinCEN may seek civil money penalties of $25,000 a day per violation of any anti-money laundering compliance program requirement. Also, FinCEN may seek: (i) injunctive relief from a court against future violations of the BSA; (ii) civil money penalties of up to $25,000 or more per reporting violation (not to exceed $100,000); and (iii) other appropriate relief. In addition, FinCEN may seek civil money penalties (up to the amount of transaction) for structuring, attempting to structure, or assisting in structuring transactions. These civil sanctions are for willful violations63 and may be applied to any casino or card club that is subject to the BSA, or to any partner, director, officer, or employee of such gaming operations.
Questions or comments regarding the contents of this Guidance should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.
1 See 31 C.F.R. Part 103.
2 See Nevada Revised Statute § 463.018 and Nevada Gaming Commission Regulation 1.170.
3 Nevada gaming statutes define a 'nonrestricted license' to include 'a license for, or the operation of, a slot machine route.' See Nevada Revised Statute § 463.0177(3). A Nevada 'nonrestricted license' or 'nonrestricted operation' also includes, among other things: (i) '. . . license for, or an operation consisting of, 16 or more slot machines;' or (ii) '. . . license for, or operation of, any number of slot machines together with any other game, gaming device, race book or sports pool at one gaming establishment.' See Nevada Revised Statute § 463.0177(1) - (2).
4 Only one 'casino' will operate at a given establishment. The party that holds a 'nonrestrictive license' and operates the slot machines pursuant to a participation agreement would be the operator of a casino. See Nevada Revised Statute § 463.245 ('A gaming license may not be issued to any person if the issuance would result in more than one licensed operation at a single establishment, whether or not the profits or revenue from gaming are shared between the licensed operations').
5 Each business establishment with gross annual gaming revenues exceeding $1 million would contain a separate 'casino' for purposes of our rules. Nevada licenses gaming activity separately at each location. See Nevada Gaming Commission Regulation 3.010 ('[The Nevada Gaming Commission] may deny an application for a state gaming license if the Commission deems that the place or location for which the license is sought is unsuitable for the conduct of gaming operations'). If a Nevada slot route operator is not operating a casino for purposes of our rules, but qualifies as a check casher, or currency dealer or exchanger, as those terms are defined in 31 C.F.R. § 103.11(uu)), it may be considered a money services business ('MSB') and subject to BSA requirements applicable to MSBs.
6 See 31 C.F.R. § 103.30(a)(1).
7 See 31 C.F.R. § 103.30 and Section 6050I of Title 26 of the United State Code. The negotiable instruments are treated as currency if they are received in a 'designated reporting transaction' or used in an attempt to avoid the Form 8300 requirement. Designated reporting transactions include the retail sale of consumer durables, collectibles, or travel or entertainment activities. See 31 C.F.R. § 103.30(c).
8 However, if these other gambling establishments or nongaming related business satisfy the definition of a money services business ('MSB') in rules implementing the BSA (such as a check casher, or currency dealer or exchanger, as those terms are defined in 31 C.F.R. § 103.11(uu)), then they would be subject to FinCEN Form 104, Currency Transaction Report ('CTR') and other requirements applicable to MSBs.
9 For treatment of bingo, see FinCEN's Frequently Asked Questions - Casino Recordkeeping, Reporting and Compliance Program Requirements (FIN-2007-G005, November 14, 2007), Question and Answer 2; for treatment of off-track betting, Question and Answer 5; for treatment of greyhound tracks, Question and Answer 6; and for treatment of horse race tracks, Question and Answer 7. Also, please note that these gambling establishments maybe subject to FinCEN Form 105, Report of International Transportation of Currency and Monetary Instruments ('CMIR') as well as Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. See 31 C.F.R. §§ 103.23 and 103.24, respectively.
10 See 31 C.F.R. § 103.30(d)(iii).
11 See 31 U.S.C. 5324. Structuring would include attempts to cause Form 8300 not to be filed, or to file a false or incomplete form. The filer can check item 1b on the Form 8300 to report the structuring. In addition, it can be checked if there is an indication of possible illegal activity with the transaction.
12 See 31 C.F.R. § 103.64(b)(4).
13 A buy-in is the amount of funds a player uses to purchase casino chips when commencing play. A buy-in can occur in cash, credit or as a deposit withdrawal.
14 'California Games' are games in which one player acts as the bank for the game and the other players bet against the bank. The banker collects all winning bets and pays all losing bets from his/her bankroll. Games may include California Blackjack, Pai Gow Poker, Pai Gow Tiles, and Super Pan.
15 The BSA defines knowledge for this purpose. See 31 C.F.R. § 103.22(c)(3).
16 See 31 C.F.R. § 103.64.
17 See 31 C.F.R. §§ 103.28 and 103.64(a)(2)(i), (a)(2)(iii), and (a)(2)(v)(A).
18 See 31 C.F.R. § 103.38(d).
19 See 31 C.F.R. § 103.36(b)(11).
20 See 31 C.F.R. § 103.38(b) which states that 'If no record is made in the ordinary course of business of any transaction with respect to which records are required to be retained by this subpart, then such a record shall be prepared in writing by the financial institution.' Therefore, a card club employee monitoring a non-house banked card game, who has obtained actual knowledge of a reportable currency transaction, would be required to produce a record of the transaction for purposes of currency transaction reporting.
21 See 31 C.F.R. § 103.36(b)(8).
22 Independently, other Federal, state and tribal gaming commissions have established requirements for each duly licensed or authorized casino to establish minimum requirements for internal controls (i.e., procedures) over gaming operations for complying with regulatory requirements (i.e., Minimum Internal Control Standards - 'MICS').
23 A known customer would include one who has a check cashing, credit or deposit account, or whose identity (i.e., name, date of birth, address, and government identification number) has been previously verified on a filed CTRC or any federal tax form containing customer information. Also, an effective BSA internal control will include, in many instances, the creation and retention of records, including those not otherwise produced in the ordinary course of business. See 31 C.F.R. § 103.64(a)(2)(i) and 103.38(b).
24 As illustrative examples, when: (i) customers provide to cage cashiers their identification credentials and/or casino account numbers for such large redemptions for currency (i e., just before, during or immediately after); or (ii) cashiers know who such customers are (i.e., known customers) even in the absence of identification credentials or given account numbers for such redemptions.
25 For a further explanation of Ticket in/Ticket Out ('TITO'), see FIN-2007-G005, Nov. 14, 2007, Question and Answer 16, footnote 57.
26 FinCEN has addressed identifying betting ticket, chip, token, or TITO ticket redemptions for currency at a cage conducted by 'unknown' customers in regards to suspicious activity reporting in Question and Answer 16 of FIN-2007-G005 (Nov. 14, 2007). As discussed in Question and Answer 16, a casino must implement procedures reasonably designed to assure the detection and proper reporting of suspicious transactions. See 31 C.F.R. § 103.64(a)(2)(v)(B).
27 Customers can obtain cash directly from an ATM located within a casino typically up to $500 per day per customer, depending on limits set by their depository institutions. For amounts above that general threshold, an ATM machine prints out vouchers that customers may take to a cage for payment, insert into a slot machine to play, or take to a kiosk machine for dispensing currency. In the event that the advance is dispensed at a kiosk machine, a casino may have knowledge of a customer's transaction based on: (i) its contractual agreement with a financial service provider for the kiosk and (ii) its system of internal controls which typically requires that such a transaction of $1,000 or more be linked to a customer.
28 A chip runner is a card club or card room employee or a casino poker room employee who works on the gaming floor selling or redeeming gaming chips and/or conducting transactions at the cage on behalf of customers who are actively gambling.
29 A floor person is a management employee who supervises the operation of a gaming table within a pit and also prepares a player rating card on each rated customer. Also know as a casino 'rater.'
30 A casino host is a marketing executive of a casino who is responsible for catering to high-end customers' needs. Duties include assisting in the opening of deposit and credit accounts for customers, and issuing complimentary gifts and services to customers to induce their continued patronage.
31 IRS Form W-9 requires the customer to certify, under penalties of perjury, that the number shown on the form is the correct Taxpayer Identification Number, and he/she is a U.S. person (including a U.S. resident alien), when the customer signs and dates the form.
32 Please note that the Internal Revenue Service issues an Individual Taxpayer Identification Number ('ITIN') to be used as a tax processing number for individuals who do not qualify to obtain Social Security Numbers ('SSNs'). Since an ITIN is not acceptable as a primary means of identification for purposes of completing Items 14 and 28 on the CTRC, FinCEN will discuss it in the next set of casino frequently asked questions.
33 In these situations, if a customer refuses to provide a SSN on a Form W-9 for filing a CTRC or completing a Federal income tax form, FinCEN understands that many state and tribal regulators support the standard industry practice of providing a receipt and retaining a customer's chips, tokens and/or tickets until a SSN is provided at which time a CTRC will be completed. FinCEN understands that casinos' experiences have shown that customers will return with their identification credentials to complete the cashing out of large chip, ticket, and/or token transactions which are then followed by the filings of CTRCs. Also, if a casino or card club knows, suspects, or has reason to suspect that a suspicious transaction was conducted or attempted by, at, or through a casino or card club, and involve $5,000 or more a FinCEN Form 102 is applicable. Information that could point to the need for a SARC may include a customer providing a false SSN in the past, refusing to provide a SSN or not providing it within the filing period for the CTRC.
34 See 31 C.F.R. § 103.64(a)(2)(v)(A).
35 A somewhat similar analysis would apply to land-based tribal casinos authorized pursuant to the Indian Gaming Regulatory Act. See 25 U.S.C. § 2701 et seq. Therefore, a tribal government may own more than one tribal casino in the same state, but each casino that is separately licensed by the tribal government or the tribal gaming commission would be considered a separately authorized gaming establishment for purposes of currency transaction reporting, even when the casinos have the same Taxpayer Identification Number for purposes of Title 26.
36 See Question and Answer 5, Footnote 22, for a discussion of known customers.
37 See 31 C.F.R. §§ 103.21(a)(2)(ii), 103.63, and 103.64(a)(2)(vi). FinCEN recognizes that even for two casinos with automated data processing systems and programs that are closely integrated, that for an unknown customer that lacks a casino deposit (i.e., safekeeping, front money or wagering), credit, check cashing, player rating/player tracking, or slot club account, that as a practical matter, it would difficult to monitor such a customer for suspicious activity reporting without associating information from casino surveillance and multiple transaction logs on currency transactions that are less than CTRC reporting threshold at both casinos.
38 A casino is not required to file a CTRC on slot jackpot or video lottery terminal wins in excess of $10,000 in currency. See FIN-2007-G005, Nov. 14, 2007, Question and Answer 12.
39 Traditional bingo is played with cards or paper having a grid of numbered squares corresponding to numbered balls drawn at random; it is not played with any computerized electronic aids.
40 For treatment of poker under the BSA, see FIN-2007-G005, November 14, 2007, Question and Answer 2.
41 See 314(b) of the USA PATRIOT Act of 2001 (Public Law 107-56) which states in part that: ' [u]pon notice provided to the Secretary, 2 or more financial institutions and any association of financial institutions may share information with one another regarding individuals, entities, organizations, and countries suspected of possible terrorist or money laundering activities.'
42 See FIN-2009-G002, Guidance on the Scope of Permissible Information Sharing Covered by Section 314(b) Safe Harbor of the USA PATRIOT Act (June 16, 2009).
43 See 31 C.F.R. § 103.120.
44 See 31 C.F.R. § 103.125.
45 See 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e).
46 See 31 C.F.R. § 103.20
47 For example, annually over the last six years approximately 25 to 35 percent of forms filed had only the 'Other' box checked or no specific activity checked at all, instead of checking the appropriate type(s) of suspicious activities. Casinos and card clubs should avoid checking 'Other' to complete the SARC's Narrative unless the type of suspicious activity that occurred is not listed in Item 26 (see FinCEN Form 102, Instructions, Item 26).
48 For guidance on how to prepare a clear and concise narrative, see FIN-2007-G005, Nov. 14, 2007, Question and Answer 2.
49 See FinCEN Guidance FIN-2007-G003, Suspicious Activity Report Supporting Documentation, issued on June 13, 2007.
50 Player rating records, which we addressed in 54 F.R. 1165 - 1167 (Jan. 12, 1989), reflect all cash activity recorded on them (regardless of the amount) that have occurred on the gaming floor. Player rating and slot club accounts track gaming activity and serve as a marketing tool to: (i) identify frequent customers as well as higher dollar players, (ii) encourage continued patronage, and (iii) ensure that complementaries are awarded on a cost-effective basis. Casinos utilize internal controls to help to ensure accountability for customers using player rating and slot club account cards. A customer's computerized player rating or slot club account record typically contains a customer's name, permanent address, date of birth, sometimes other identification information (e.g., Social Security Number for purposes of Internal Revenue Code income tax reporting for jackpot wins) as well as a player's gambling activity.
51 See FinCEN Form 102 (Instructions, page 2).
52 See The SAR Activity Review - Trends, Tips & Issues, Issue 10 (May 2006), Section 4, pages 35 - 36, The SAR Activity Review - Trends, Tips & Issue, Issue 2 (June 2001), Section 6, page 35 and The SAR Activity Review - Trends, Tips & Issues, Issue 2 (October 2000), Section 5, page 27.
53 These may include, for example, when required by state, tribal or local gaming regulation, subsequently barring or banning a customer from future gambling and accountholder activity. See SARC, Item 22.
54 See 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 103.21(e). FinCEN proposed amendments to 31 C.F.R. § 103.21 to expand and clarify the confidentiality that should be afforded SARCs and information that would reveal the existence of a SARC. See 74 F.R. 10148, 10157 - 10158 (Mar. 9, 2009). Readers of this guidance should consult that rule, when finalized, for more specific information regarding the appropriate parties to whom a SARC may be provided.
55 For examples of appropriate law enforcement and regulatory agencies see The SAR Activity Review, Trends Tips & Issues, Issue 9, October 2005 (pages 43 - 45).
56 Also, there is nothing to prohibit a domestic casino parent or headquarters corporation and/or its domestic casino affiliates, branches, or places of business from consulting with affiliated casinos licensed in other countries before a SAR form is filed concerning customer accountholder activity that is occurring among them.
57 This FAQ does not address the applicability of any other Federal, state, local, or tribal laws or regulations.
58 Please note that there is no monetary threshold in 31 C.F.R. § 103.36(b)(5).
59 See 31 C.F.R. § 103.64(a)(2)(v)(A), which requires the implementation of procedures for using all available information to determine, when required by the BSA, a customer's name, address, Social Security Number, and other identifying information and verification of the same. Therefore, since a casino records information on extensions of credit, for example, it must ensure that the records are complete pursuant to 31 C.F.R. § 103.36(b)(4).
60 Also, such activity by a customer could be suspicious since it is designed to evade the BSA reporting requirement. See 31 C.F.R. § 103.21(a)(2)(ii).
61 FinCEN understands that some casinos use the following available information or alternatives to obtain the needed information such as: (i) Federal tax forms filed for certain customers' gambling transactions; (ii) other customer documents such as copies of negotiable instruments (e.g., personal checks); (iii) a reporting agency that provides telephonic or on-line searching of customer identification information for those that applied for casino credit as well as have outstanding casino debts; (iv) public on-line database search engines that do not require a subscription; (v) organizations that provide subscription services to businesses and governmental agencies containing individuals' personal identification information from their commercial databases, or (vi) during subsequent trips when knowledge is obtained about customers' presence through the process of conducting new casino transactions.
62 A BSA compliance committee may be composed of all applicable casino departments such as accounting, cage operations, casino credit, finance, information technology, internal audit, marketing, slot operations, surveillance, and table games. A casino's BSA compliance officer is usually a member of such a committee. In-house and/or external legal counsel may provide advice to a BSA compliance committee, but is not necessarily a member. A BSA compliance committee may need to schedule regular meetings to establish and monitor a risk-based approach to its business (e.g., type of products and services it offers, the locations it serves, and the nature of its customers).
63 See 31 U.S.C. §§ 5320 - 5322, and 5324;and 31 C.F.R. §§ 103.57(c), (e), and (f), and103.63.
(a)Withholding obligation -
(1)General rule. Every person, including the Government of the United States, a State, or a political subdivision thereof, or any instrumentality of any of the foregoing making any payment of “winnings subject to withholding” (defined in paragraph (b) of the section) must deduct and withhold a tax in an amount equal to the product of the third lowest rate of tax applicable under section 1(c) and the payment. The tax must be deducted and withheld upon payment of the winnings by the person making the payment (“payer”). See paragraph (c)(5)(ii) of this section for a special rule relating to the time for making deposits of withheld amounts and filing the return with respect to those amounts. Any person receiving a payment of winnings subject to withholding must furnish the payer a statement as required in paragraph (d) of this section. Payers of winnings subject to withholding must file a return with the Internal Revenue Service and furnish a statement to the payee as required in paragraph (e) of this section. With respect to reporting requirements for certain payments of gambling winnings not subject to withholding, see section 6041 and the regulations thereunder.
(2)Exceptions. The tax imposed under section 3402(q)(1) and this section shall not apply (i) with respect to a payment of winnings which is made to a nonresident alien individual or foreign corporation under the circumstances described in paragraph (c)(4) of this section or (ii) with respect to a payment of winnings from a slot machine play, or a keno or bingo game.
(b)Winnings subject to withholding -
(1)In general. Winnings subject to withholding means any payment from -
(i) A wager placed in a State-conducted lottery (defined in paragraph (c)(2) of this section) but only if the proceeds from the wager exceed $5,000;
(ii) A wager placed in a sweepstakes, wagering pool, or lottery other than a State-conducted lottery but only if the proceeds from the wager exceed $5,000; or
(iii) Any other wagering transaction (as defined in paragraph (c)(3) of this section) but only if the proceeds from the wager:
(A) Exceed $5,000; and
(B) Are at least 300 times as large as the amount of the wager.
(2)Total proceeds subject to withholding. If proceeds from the wager qualify as winnings subject to withholding, then the total proceeds from the wager, and not merely amounts in excess of $5,000, are subject to withholding.
(c)Definitions; special rules -
(1)Rules for determining amount of proceeds from a wager -
(i)In general. The amount of proceeds from a wager is the amount paid with respect to the wager, less the amount of the wager.
(ii)Amount of the wager in the case of horse races, dog races, and jai alai. In the case of a wagering transaction with respect to horse races, dog races, or jai alai, all wagers placed in a single parimutuel pool and represented on a single ticket are aggregated and treated as a single wager for purposes of determining the amount of the wager. A ticket in the case of horse races, dog races, or jai alai is a written or electronic record that the payee must present to collect proceeds from a wager or wagers.
(iii)Amount paid with respect to a wager -
(A)Identical wagers. Amounts paid with respect to identical wagers are treated as paid with respect to a single wager for purposes of calculating the amount of proceeds from a wager. Two or more wagers are identical wagers if winning depends on the occurrence (or non-occurrence) of the same event or events; the wagers are placed with the same payer; and, in the case of horse races, dog races, or jai alai, the wagers are placed in the same parimutuel pool. Wagers may be identical wagers even if the amounts wagered differ as long as the wagers are otherwise treated as identical wagers under this paragraph (c)(1)(iii)(A). Tickets purchased in a lottery generally are not identical wagers, because the designation of each ticket as a winner generally would not be based on the occurrence of the same event, for example, the drawing of a particular number.
(B)Non-monetary proceeds. In determining the amount paid with respect to a wager, proceeds which are not money are taken into account at the fair market value.
(C)Periodic payments. Periodic payments, including installment payments or payments which are to be made periodically for the life of a person, are aggregated for purposes of determining the amount paid with respect to the wager. The aggregate amount of periodic payments to be made for a person's life is based on that person's life expectancy. See §§ 1.72-5 and 1.72-9 of this chapter for rules used in computing the expected return on annuities. For purposes of determining the amount subject to withholding, the first periodic payment must be reduced by the amount of the wager.
(2)Wager placed in a State-conducted lottery. The term “wager placed in a State-conducted lottery” means a wager placed in a lottery conducted by an agency of a State acting under authority of State law provided that the wager is placed with the State agency conducting such lottery or with its authorized employees or agents. This term includes wagers placed in State-conducted lotteries in which the amount of winnings is determined by a parimutuel system.
(3)Other wagering transaction. The term “other wagering transaction” means any wagering transaction other than one in a lottery, sweepstakes, or wagering pool. This term includes a wagering transaction in a parimutuel pool with respect to horse races, dog races, or jai alai.
(4)Certain payments to nonresident aliens or foreign corporations. A payment of winnings that is subject to withholding tax under section 1441(a) (relating to withholding on nonresident aliens) or 1442(a) (relating to withholding on foreign corporations) is not subject to the tax imposed by section 3402(q) and this section when the payee is a foreign person, as determined under the rules of section 1441(a) and the regulations thereunder. A payment is treated as being subject to withholding tax under section 1441(a) or 1442(a) notwithstanding that the rate of such tax is reduced (even to zero) as may be provided by an applicable treaty with another country. However, a reduced or zero rate of withholding of tax must not be applied by the payer in lieu of the rate imposed by sections 1441 and 1442 unless the person receiving the winnings has provided to the payer the documentation required by § 1.1441-6 of this chapter to establish entitlement to treaty benefits.
(5)Gambling winnings treated as payments by employer to employee.
(i) Except as provided in subdivision (ii), for purposes of sections 3403 and 3404 and the regulations thereunder and for purposes of so much of subtitle F (except section 7205) and the regulations thereunder as relate to chapter 24, payments to any person of winnings subject to withholding under this section shall be treated as if they are wages paid by an employer to an employee.
(ii) Solely for purposes of applying the deposit rules under 6302(c) and the return requirement of section 6011, the withholding from winnings shall be deemed to have been made no earlier than at the time the winner's identity is known to the payer. Thus, for example, winnings from a State-conducted lottery are subject to withholding when actually or constructively paid, whichever is earlier; however, the time for depositing the withheld taxes and filing a return with respect thereto shall be determined by reference to the date on which the winner's identity is known to the State, if such date is later than the date on which the winnings are actively or constructively paid. If a payer's obligation to pay winnings terminates other than by payment, all liabilities and requirements resulting from the requirement that the payer deduct and withhold with respect to such winnings shall also terminate.
(d)Statement furnished by payee -
(1)In general. Each person who is making a payment subject to withholding under this section must obtain from the payee a statement described in paragraph (d)(2) of this section.
(2)Contents of statement. Each person who is to receive a payment of winnings subject to withholding under this section must furnish the payer a statement on Form W-2G or 5754 (whichever is applicable) made under the penalties of perjury containing -
(i) The name, address, and taxpayer identification number of the winner accompanied by a declaration that no other person is entitled to any portion of such payment, or
(ii) The name, address, and taxpayer identification number of the payee and of every person entitled to any portion of the payment.
(3)Multiple payments. If more than one payment of winnings subject to withholding is to be made with respect to a single wager, for example in the case of an annuity, the payee is required to furnish the payer a statement with respect to the first payment only, provided that the other payments are taken into account in a return required by paragraph (e) of this section.
(4)Reliance on statement for identical wagers. If the payee furnishes the statement which may be required pursuant to § 1.6011-3 of this chapter (regarding the requirement of a statement from payees of certain gambling winnings), indicating that the payee (and any other persons entitled to a portion of the winnings) is entitled to winnings from identical wagers, as defined in paragraph (c)(1)(iii)(A) of this section, and indicating the amount of the winnings, if any, then the payer may rely upon the statement in determining the total amount of proceeds from the wager under paragraph (c)(1) of this section.
(e)Return of payer -
(1)In general. Every person making payment of winnings for which a statement is required under paragraph (d) of this section must file a return on Form W-2G at the Internal Revenue Service location designated in the instructions to the form on or before February 28 (March 31 if filed electronically) of the calendar year following the calendar year in which the payment of winnings is made. The return required by this paragraph (e) need not include the statement by the payee required by paragraph (d) of this section and, therefore, need not be signed by the payee, provided the statement is retained by the payer as long as its contents may become material in the administration of any internal revenue law. In addition, the return required by this paragraph (e) need not contain the information required by paragraph (e)(1)(v) of this section provided the information is obtained with respect to the payee and retained by the payer as long as its contents may become material in the administration of any internal revenue law. For payments to more than one winner, a separate Form W-2G, which in no event need be signed by the winner, must be filed with respect to each such winner. Each Form W-2G must contain the following:
(i) The name, address, and taxpayer identification number of the payer;
(ii) The name, address, and taxpayer identification number of the winner;
(iii) The date, amount of the payment, and amount withheld;
(iv) The type of wagering transaction;
(v) Except with respect to winnings from a wager placed in a State-conducted lottery, a general description of the two types of identification (as described in paragraph (e)(2) of this section), one of which must have the payee's photograph on it (except in the case of tribal member identification cards in certain circumstances as described in paragraph (e)(3) of this section), that the payer relied on to verify the payee's name, address, and taxpayer identification number;
(vi) The amount of winnings from identical wagers; and
(vii) Any other information required by the form, instructions, or other applicable guidance published in the Internal Revenue Bulletin.
(2)Identification. The following items are treated as identification for purposes of paragraph (e)(1)(v) of this section -
(i) Government-issued identification (for example, a driver's license, passport, social security card, military identification card, tribal member identification card issued by a federally-recognized Indian tribe, or voter registration card) in the name of the payee; and
(ii) A Form W-9, “Request for Taxpayer Identification Number and Certification,” signed by the payee that includes the payee's name, address, taxpayer identification number, and other information required by the form. A Form W-9 is not acceptable for this purpose if the payee has modified the form (other than pursuant to instructions to the form) or if the payee has deleted the jurat or other similar provisions by which the payee certifies or affirms the correctness of the statements contained on the form.
(3)Special rule for tribal member identification cards. A tribal member identification card need not contain the payee's photograph to meet the identification requirement described in paragraph (e)(1)(v) of this section if -
(i) The payee is a member of a federally-recognized Indian tribe;
(ii) The payee presents the payer with a tribal member identification card issued by a federally-recognized Indian tribe stating that the payee is a member of such tribe; and
(iii) The payer is a gaming establishment (as described in § 1.6041-10(b)(2)(iv) of this chapter) owned or licensed (in accordance with 25 U.S.C. 2710) by the tribal government that issued the tribal member identification card referred to in paragraph (e)(3)(ii) of this section.
(4)Transmittal form.Persons making payments of winnings subject to withholding must use Form 1096 to transmit Forms W-2G to the Internal Revenue Service.
(5)Furnishing a statement to the payee. Every payer required to make a return under paragraph (e)(1) of this section must also make and furnish to each payee, with respect to each payment of winnings subject to withholding, a written statement that contains the information that is required to be included on the return under paragraph (e)(1) of this section. The payer must furnish the statement to the payee on or before January 31st of the year following the calendar year in which payment of the winnings subject to withholding is made. The statement will be considered furnished to the payee if it is provided to the payee at the time of payment or if it is mailed to the payee on or before January 31st of the year following the calendar year in which payment was made.
(f)Examples. The provisions of this section may be illustrated by the following examples:
(ii) B cashes the tickets at different cashier windows. Pursuant to paragraph (d) of this section and § 1.6011-3, B completes a Form W-2G indicating that the amount of winnings is from identical wagers and provides the form to each cashier. The payments by each cashier of $1,500 and $4,000 are less than the $5,000 threshold for withholding, but under paragraph (c)(1)(iii)(A) of this section, identical wagers are treated as paid with respect to a single wager for purposes of determining the proceeds from a wager. The payment is not subject to withholding or reporting because although the proceeds from the wager are $5,445 ($1,500 + $4,000 − $55), the proceeds from the wager are not at least 300 times as great as the amount wagered ($55 × 300 = $16,500).
Gambling Winnings Reporting Requirements
(g)Applicability date. The rules in this section apply to payments made with respect to a winning event that occurs after November 13, 2017. For rules that apply to payments made with respect to a winning event on or before that date, see § 31.3402(q)-1 as contained in 26 CFR part 31, revised April 1, 2017.