There is a reason security guards in casinos carry guns. Cash! Lots of it! It has become a sought after vacation, almost home - to the dazed, the dazzled, the dubious and the disenchanted mingling with the opportunists, the exulted (I won, I won) and the creative criminal mind. Everyone (even though they say they aren't) looking for the pot of the gold at the end of the rainbow. Some consider it fun, entertainment really. Some are obsessed, like the couple who rolled in one Friday night, sat at the bar with drinks, and cigarettes, focused intensely on the electronic poker games. They were still there late Sunday afternoon, same clothes, same determination but significantly less hope in their blurred facial expressions. Guess, you'd feel grimy too after 48 hours of no sleep, and no luck.

Imagine all that money. Imagine! The infrastructure demanded to control such mountains of cash, flowing in and out. Imagine the crowds, all focused intensely on one objective - to win, or to lose trying.

The gaming world we see as visitors appears effortlessly seamless: the buffets, the free drinkies, the glittery lights, the cacophonous noise, the shopping, and the relentlessly cheerful efficient hospitality. With a complete absence of daylight, or outside influence, the atmosphere becomes a virtual world; you become one among many, but completely alone - free to focus on one thing, winning while losing.

The scale of operations of a modern electronically sophisticated successfully profitable casino is beyond the scope of this article. The business philosophy is simple; you cannot make money if you are losing money.

Internal Infrastructure. Aside from the designer themes that every casino resort embraces, there are major expenditures in technologies for security monitoring and control.

Years ago, while I working at another financial institution in a different employment position, the head of the compliance and security division described a brand new electronic system purchased to monitor and catch employees (and their friends) gaming the bank. Simplistically, the system worked on assessing random patterns of cash transfers deposits, withdrawals and human behaviour. "You see," he said, "in any organisation exposed to opportunity to steal, whether a bank, a casino, a technology firm, a manufacturer, a retail industry, two percent of employees are actively engaged in criminal acts, while another three percent are working on serious plans to commit fraud. In a population crowd of 1,000 people, 50 are already thieves."

The prime business that produces profits in casinos is gambling (although more resorts are actualising revenue from the resort experience itself). According to Ross O Storey & Jack Loo February 22 2010, IT Vendors Hit the Jackpot, resorts need the best and latest systems to deter and catch cheats.

Common security and gaming technologies in leading casinos across the world include RFID-tagged betting chips to detect counterfeiting, facial recognition technology to identify infamous individuals, thousands of analogue and even IP video cameras watching every move. Slot machines are now cashless and networked, no more cash jingling and jangling into metal buckets. The one thing that the gaming customer relies on above everything else is that the games, and the systems that ultimately support them, are fair, accurate, and reliable. "If a casino does not have mature, industry proven systems and operational procedures, it cannot sustain viability over the long run," stated Gregeory Dauenhauer, IT director of Marina Bay Sands systems, Singapore.

There are, of course, numerous ways to scam the House, as it is called, and new ones thought of every day. The United States Financial Crimes Prevention Center focus is very serious, devoting an entire section of their website to casino operations:

• Know your Customer, Guidance Obtaining and Retaining Beneficial Ownership Information

Structuring by Casino Patrons and Personnel

l Currency Transaction Reporting Requirement

l Guidance on Recognising Suspicious Activity - Red Flags for Casinos and Card Clubs

They list procedures for recognising suspicious customer activity, such as Attempts to Evade Reporting or Recordkeeping Requirements under the Bank Secrecy Act, or other anti-money laundering regulations:

A customer pays off a large credit debt, such as markers or bad checks, of more than $20,000 over a short period of time (eg, less than one week), through a series of currency transactions, none of which exceeds $10,000 in a gaming day.

l A customer, who is a big winner, enlists another individual (who is not a partner of the customer in the gaming activity), to cash out a portion of the chips or tokens won to avoid the filing of a AML/CTR report, IRS Form W-2G or other tax forms.

l A customer attempts to influence, bribe, corrupt, or conspire with an employee not to file currency transaction reports.

l A customer appears to use a casino account primarily as a temporary repository for funds by making frequent deposits into the account and, within a short period of time (eg, one to two days), requests money transfers of all but a token amount to domestic or foreign-based bank accounts.

l A customer transfers funds to a casino for deposit into a front money account in excess of $5,000; and withdraws it in chips at a table game, engages in minimal or no gaming activity, and exchanges remaining chips at a cage for a casino check.

l A customer arranges large money transfers out of the country which are paid for by multiple cashier's checks from different financial institutions in amounts under $10,000.

That's part of the the controlled environment once you are in the door as a casino reveler, but what happens before that? Questions arise.

Monitoring the cash inflow - whether it is Bermuda pinkbacks or US greenbacks, what security precautions will need to be in place when large sums of money walk in the door? What is the documentation to identify sources of cash at point of entry, when an audience is large, but the technology is sophisticated at tracing cash trail routes. How will this be handled in our environment? Will there be mini lifestyle audits, requests for proof of withdrawals from credit card machines or bank distributions slips, photo identification outside the golden doors?

Generally, it seems according to industry newsletters that the majority of casino participants engage in minimal gambling, leaving an average or $460 behind when the vacation is over, but there is a percentage group that is engaged in other than ordinary activity: Misdemeanors, petty theft, tax evasion and pure criminal intent.

What are the demands on the outside environment, the social, economic, law protection agencies with pressure on current levels of crime prevention personnel.

What are the cost/benefits? Do they equate to equilibrium, loss or a net gain? Revenue numbers have been released, but are they gross of the strains on the country infrastructure cost?

A net number that encompasses all outside expenses, law enforcement, regulations, activity transaction monitoring, etc. needed to provide support to these businesses may significantly reduce that projection. It has been often stated in this industry that creation of jobs is driving force, but are we up to the task?

What is the social/economic impact on the Individual and Family for those who may choose to work (and hopefully be hired) in this industry and for families who succumb to addictive behavior. If we build it, will they come? Global tax authorities may be the most interested in the winning outcome.

Parts 2 and 3 next.

Martha Harris Myron, CPA, CFP(US) TEP(UK) JP- Bermuda is an international Certified Financial Planner™ practitioner. She specialises in independent fee-only cross border investment, tax, estate, and personal strategic retirement solutions for Bermuda residents with cross-border and multi-national connections, internationally mobile people and US citizens living abroad. For more information, contact martha.myron@gmail.com or 296 3528.