The recent action by the Financial Crimes Enforcement Network (FinCEN) flags transactions involving ten Mexican gambling establishments as a “class of transactions of primary money laundering concern”. These venues, located across Sonora, Sinaloa, Baja California and Tabasco, are reported to have facilitated illicit flows in support of the Sinaloa Cartel, a designated Foreign Terrorist Organization and Specially Designated Global Terrorist entity.

Money Laundering Risk from Casinos

FinCEN’s finding is grounded in non-public data that over the period 2017-2024 these gambling operations and their leadership sent monthly disbursements to cartel affiliates, used stratagems to evade detection and utilised over 30 bank accounts in Mexico-based companies with limited documented links to legal incomes. The aggregate illicit payments identified exceeded USD 2 million, a modest-sized sum on its face, but indicative of a persistent conduit for transnational illicit finance.

From the compliance vantage point, the case underscores how regulated businesses in high-risk jurisdictions, like casinos, can become nodes in organised crime money-laundering networks. Gambling operations may appear legitimate, generating large cash turnovers, but when controlled or co-opted by criminal groups they serve as laundromats for drug-trafficking proceeds. Here, the cartel’s involvement is direct: casino senior management received instructions from cartel affiliates on structuring transactions, limiting deposit sizes below approximately MXN 90,000 (around USD 4,350) per deposit, avoiding consecutive-day deposits and using in-person pickup of funds — all hallmarks of structuring and layering.

How the Scheme Operated

The investigation shows a multi-step laundering typology. First, criminal proceeds derived from narcotics trafficking by the Sinaloa Cartel flowed into Mexico. Then they were placed into cash deposits via companies linked to the gambling establishments — these might include businesses licenced in Mexico to operate land-based casinos under the oversight of the Mexican Interior ministry’s gambling licensing regime. Despite the venues’ legitimacy on paper, the senior leadership of the casinos coordinated with cartel affiliates: deposits were often made into bank accounts designated by cartel members, sometimes on site at casinos, or funds handed over directly to persons designated by cartel associates.

Once inside the financial system, these funds accessed the wider banking network via correspondent relationships between Mexican banks (or foreign banking institutions with those ties) and U.S. financial institutions. Given the U.S.–Mexico trade and financial integration (in 2024 goods and services trade alone with Mexico was an estimated USD 935 billion), the inter-linkage between Mexican banks and U.S. institutions creates a pathway for illicit funds to reach or contaminate the U.S. system. From here, further layering or integration into legitimate assets might follow.

Even though the identified amount (USD 2 million+) is small compared with the global scale of cartel trafficking, the value lies in the sustained nature, repeat monthly payments, and the use of licensed casino infrastructure as a cover for illicit disbursements. FinCEN assesses that the transactional volume, duration and patterns indicate the gambling establishments are “a substantial and enduring source of funds and facilitator of money-laundering for the Sinaloa Cartel”.

Besides classic structuring, other red-flags featured: use of multiple accounts, deposits just under trigger thresholds, non-consecutive transactions, instruction from cartel affiliates to casino leadership on how to avoid AML controls, and the existence of a cross-border money-flow mechanism linking Mexican operations to U.S./global correspondent banks.

Regulatory and Compliance Implications for Covered Financial Institutions

In response, FinCEN proposes leveraging its authority under section 311 of the USA PATRIOT Act (codified at 31 U.S.C. § 5318A) which allows the Treasury to designate classes of transactions or foreign institutions as being of primary money-laundering concern. Following this statutory authority, FinCEN proposes a special measure prohibiting covered U.S. financial institutions (banks, brokers, futures commission merchants, mutual funds) from opening or maintaining correspondent or payable-through accounts for any foreign banking institution that processes transactions involving the ten gambling establishments. In addition to the prohibition, the rule would impose special due diligence obligations, including notification to foreign correspondent account holders that they may not provide access to the implicated gambling establishments, monitoring of funds transfer orders and documentary scrutiny, as well as risk-based screening.

For banks and other covered entities this sets a heightened risk profile for correspondent accounts with Mexican banks (or other foreign banks) that might have exposure to the ten casinos, or other Mexican gambling entities. Enhanced transaction monitoring, screening of underlying customers and beneficiaries, and identification of casino-linked structures are now required. The proposal further emphasises that normal reporting obligations (e.g., Suspicious Activity Reports) remain unaffected, but the new finding should serve as a strong indicator for institutions to assess whether transactions fall within a “class of transactions of primary money-laundering concern”.

Importantly, the rule emphasises that the casino establishments may be appropriately licensed in Mexico and may legitimately conduct gaming operations, but the documented nexus to a designated cartel and the identified laundering methodologies tip the risk-/response balance towards special measures rather than incremental compliance tweaks. The regulatory calculus acknowledges that while additional record-keeping or information-collection requirements would burden institutions, a prohibition is preferred given the nature of the risk and the adversarial sophistication of the laundering scheme.

Key Lessons for AML/CFT Professionals

This case generates several practical take-aways for AML/CFT teams and compliance officers. First, licensed gambling establishments—even when legitimate under local law—may serve as front-ends for transnational organised crime. Compliance should therefore assess country-specific risks (here Mexico), ownership and control of gambling entities, corporate licences and regulatory oversight, as well as any links to known criminal organisations.

Second, the structuring behaviour described (multiple deposits, deposit caps under detection thresholds, non-consecutive days, multiple accounts, cash or in-person pickups) remains a dominant typology. Institutions should ensure that their transaction monitoring frameworks can recognise these patterns, especially when linked to high-risk geographies or industries. Moreover, alert thresholds should be calibrated to local currency or deposit habits to detect when transactions approximate local caps (for example, MXN 90,000 in this case).

Third, correspondent banking risks remain salient. Even when the direct entity of concern is foreign, the U.S. correspondent bank may be indirectly exposed if its foreign correspondent accounts serve as the conduit. Consequently, due-diligence on foreign banks must include screening for relationships with high-risk sectors (such as casinos in cartel-controlled regions), monitoring for suspicious flow patterns, and timely responses to regulatory advisories such as this FinCEN finding.

Fourth, inter-agency and international coordination amplifies risk domains. This case involved coordination between FinCEN, the Office of Foreign Assets Control (OFAC) and the Mexican government, underscoring the need for institutions to monitor not only domestic regulatory actions but also foreign sanctions, licensing changes and enforcement developments in neighbouring jurisdictions.

Finally, compliance programmes must consider the broader context of illicit business models. Here the underlying predicate offence is narcotics trafficking—specifically synthetic opioids—and the money-laundering scheme is tailored to avoid detection by mimicking legitimate cash flows through casinos. AML officers must therefore link transaction-monitoring signals not only to deposits but also to the business model of the customer, ownership control, and known regional criminal risks.

What This Means Going Forward

The announcement sets a precedent for how regulatory authorities are treating gambling establishments as high-risk conduits for cartel-linked laundering. While the immediate proposed rule targets a specific set of ten Mexican casinos, the principle extends: licensed gaming operations in jurisdictions with cartel presence may attract section 311-style measures if implicated in structured laundering flows. For financial institutions this means that the industry classification alone (e.g., casino, gaming services) must trigger enhanced scrutiny in high-risk contexts, and AML programmes must be alert to evolving typologies with cross-border dimensions and criminal governance.

In practice, compliance departments should run targeted reviews of correspondent account exposure to Mexican banks, screen for relationships to the ten named establishments, and update risk-assessment frameworks to reflect the heightened risk of money-laundering through casino networks. Moreover, transaction-monitoring analytics should incorporate red-flag indicators such as: deposit behaviour just below regulatory thresholds, non-consecutive day deposits, use of multiple accounts owned by related entities, funds pick-ups in person at gaming venues, and instruction from high-risk third-party affiliates on how to evade detection.

For regulators and enforcement agencies the case re-affirms the utility of section 311 special-measures as a tool to cut off access to the U.S. financial system even when the direct entity is outside U.S. jurisdiction. This extra-territorial reach places a compliance burden on global banks to assess exposures tied to foreign gaming-industry entities.

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Related Links

• U.S. Drug Enforcement Administration – National Drug Threat Assessment
• FATF – International Standards on Combating Money Laundering and Terrorist Financing
• United Nations Office on Drugs and Crime – Global Programme against Money Laundering
• Bank Secrecy Act Regulations – Code of Federal Regulations 31 CFR Chapter X
• Financial Action Task Force – High-Risk Jurisdictions and Increased Monitoring

Other FinCrime Central Articles About the Sinaloa Cartel

• OFAC Targets the Sinaloa Cartel’s Money Laundering Operations
• Mexico Strikes Money Laundering Network of Los Mayos with Freezes
• Millions Lost in Mexico as Narco Rapper Sanctioned for Money Laundering

Source: FinCEN

• FinCEN Combats Financial Support to the Sinaloa Cartel by Finding Transactions Involving 10 Mexico-based Gambling Establishments to be of Primary Money Laundering Concern
• Proposal of Special Measure Regarding Transactions Involving Ten Mexican Gambling Establishments as a Class of Transactions of Primary Money Laundering Concern (as submitted to the Federal Register)

Some of FinCrime Central’s articles may have been enriched or edited with the help of AI tools. It may contain unintentional errors.

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