TX Poker – Anti-Money Laundering (AML) & Know Your Customer (KYC) Compliance Policy

1. Introduction

TX Poker LLC (“the Company”) is a private, web-based members-only social club based in Texas. Only approved members may access the site/app and participate. TX Poker does not take rake or participate in any aspect of gambling winnings. Instead, the Company charges membership fees and hourly access fees for platform usage.

Despite the social-club model, TX Poker recognizes that gambling environments—online or offline—are historically vulnerable to money laundering, terrorist financing, fraud, and other illicit activity. Because of these risks, TX Poker voluntarily implements a robust AML/KYC Compliance Program, aligned with:

• Financial Action Task Force (FATF) Recommendations
• US FinCEN guidance for gaming businesses
• Best-practice frameworks used by regulated iGaming jurisdictions
• Texas-specific operational and business obligations
• Requirements shared by leading licensing bodies (UKGC, MGA, EU directives) insofar as they relate to AML risk mitigation

This Policy outlines how TX Poker identifies, assesses, prevents, and reports financial crime risks.

2. Purpose of the AML/KYC Program

The objectives of this Program are to:

• Prevent TX Poker from being used for money laundering or terrorist financing.
• Ensure full identity verification of all members before granting access.
• Detect, monitor, and investigate suspicious activity.
• Maintain transparent and auditable recordkeeping.
• Protect the Club, its members, and its payment partners from illicit activity.
• Demonstrate a proactive commitment to responsible operations.

3. Risk-Based Approach (RBA)

TX Poker uses a risk-based approach consistent with FATF Recommendation 1.

3.1 Risk Categories Assessed

TX Poker evaluates risks across the following areas:

• Customer Risk: identity fraud, PEPs, sanctions exposure, geographic risks, high-value players.
• Transactional Risk: rapid in/out movement of funds, structuring, use of third-party accounts.
• Behavioral Risk: unusual patterns, non-typical gameplay behavior, chip-dumping, collusion.
• Product/Service Risk: real-money poker gameplay creates heightened AML risk by default.
• Delivery Channel Risk: online platforms may obscure identity if controls are insufficient.

3.2 Mitigation Measures

TX Poker will:

• Enforce mandatory KYC through Sumsub prior to any access to real-money games.
• Apply enhanced screening to higher-risk members or transactions.
• Continuously monitor activity using automated and manual review.
• Block access from sanctioned, embargoed, or high-risk jurisdictions.
• Restrict deposits and withdrawals until verification is complete.

4. Customer Identification & Verification (KYC)

TX Poker requires all members to undergo full identity verification before being granted gameplay access.

4.1 Verification Requirements

Using Sumsub, TX Poker verifies:

• Government-issued ID (driver’s license, passport, etc.)
• Selfie or biometric match
• Date of birth (age 18+ required)
• Residential address verification
• Phone and email verification
• Duplicate account detection

4.2 High-Risk KYC Flags

Sumsub automatically flags:

• Identity inconsistencies
• Forged or manipulated documents
• Mismatched geolocation vs. residence
• Use of VPN or anonymization tools
• PEP or sanctions matches

Accounts flagged are routed to manual compliance review.

5. Ongoing Customer Due Diligence (CDD)

TX Poker maintains active monitoring of all members throughout their relationship.

5.1 Ongoing CDD Includes:

1. Monitoring deposits, withdrawals, and play patterns
2. Updating expired identity documents
3. Re-validating identity in case of suspicious activity
4. Reviewing changes in the customer’s risk profile

5.2 Triggers for Re-Verification

TX Poker may re-verify a member when:

• Unusual gameplay patterns arise
• A member alters personal data
• There are rapid or high-value fund movements
• Suspicious behavior is detected

6. Enhanced Due Diligence (EDD)

TX Poker applies EDD in cases of elevated risk.

6.1 EDD Triggers

• Politically exposed person (PEP) status
• High-risk jurisdictions
• Large or rapid deposits/withdrawals
• Mismatched IP address vs. residence
• Possible chip-dumping or collusive play
• Indications of third-party payments

6.2 EDD Measures Conducted

• Manual review of identity documents
• Verification of source of funds or source of wealth
• Additional biometric checks
• Limits placed on account until cleared
• Review of full transaction history
• Mandatory interview if required

7. Transaction Monitoring

TX Poker employs automated and manual transaction monitoring systems integrated with Sumsub and internal analytics tools.

7.1 Monitoring Covers:

• Deposit/withdrawal frequency
• Third-party payment patterns
• Rapid “in and out” of funds
• Use of multiple payment methods
• Low gameplay paired with high fund activity
• Suspicious gameplay patterns (chip-dumping, collusion)

7.2 Alerts

Suspicious transactions are automatically routed to the Compliance Officer for review.

8. Suspicious Activity Reporting (SAR)

TX Poker will file Suspicious Activity Reports when required.

8.1 Reporting Requirements

If the Compliance Officer identifies activity that may involve:

• Money laundering
• Terrorist financing
• Fraud
• Third-party misuse
• Structuring
• Other criminal activity

Then a SAR will be submitted to the appropriate Financial Intelligence Unit (e.g., FinCEN) as applicable.

8.2 Prohibition on Tipping Off

TX Poker strictly prohibits:

• Informing a member that a SAR is being filed
• Informing a member that they are under investigation

9. Sanctions & PEP Screening

All members are screened against:

• OFAC sanctions lists
• EU consolidated list
• UN Security Council sanctions
• HM Treasury list
• Global PEP databases
• Adverse media databases

Screening occurs at onboarding and continuously during the membership.

10. Recordkeeping

TX Poker securely retains all AML/KYC records for at least five (5) years, including:

• KYC documents submitted via Sumsub
• Transaction logs
• Internal investigation notes
• SAR filings
• Audit logs
• Communication history

All records are encrypted and accessible only to authorized compliance personnel.

11. Independent AML Audits

TX Poker undergoes periodic independent AML audits to evaluate:

• Effectiveness of controls
• Transaction monitoring accuracy
• KYC/EDD processes
• Training adequacy
• Compliance with FATF-aligned standards

Audit results are documented and corrective actions implemented promptly.

12. Employee Training

TX Poker provides mandatory AML/KYC training to all relevant staff.

Training includes:

• Money laundering risks in online poker
• Fraud detection
• Identity verification red flags
• SAR filing process
• Prohibited behaviors & reporting obligations
• Responsible gambling indicators

Training occurs annually and upon onboarding.

13. Responsible Gambling Controls

TX Poker maintains measures to protect member welfare, including:

• Self-exclusion tools
• Deposit and spending limits
• Monitoring behavioral indicators of problem play
• Allowing members to request exclusion at any time

14. Data Protection & Privacy

TX Poker complies with applicable data-protection requirements, including:

• Secure data transmission
• Encrypted storage
• Limited access permissions
• GDPR-aligned privacy practices for international members
• Regular cybersecurity testing

15. Licensing, Operations, and Fair Play

While TX Poker operates under a private membership social club model:

• All gameplay uses certified random number generators (RNGs).
• Members must agree to all Club rules.
• Platform integrity measures ensure fairness and accuracy.
• Any required business registrations or permits in Texas will be maintained.

16. Governance & Responsibilities

16.1 Compliance Officer

TX Poker designates Joni Grady, Chief Financial Officer (CFO), as the Company’s Compliance Officer. In this role, Joni Grady is responsible for:

• Overseeing the development, implementation, and maintenance of all AML/KYC processes.
• Reviewing alerts generated by transaction monitoring and KYC systems.
• Conducting enhanced due diligence (EDD) investigations when required.
• Filing Suspicious Activity Reports (SARs) with the appropriate authorities.
• Ensuring that all staff receive appropriate AML/KYC training.
• Maintaining up-to-date knowledge of applicable AML laws, FATF guidance, and gambling-industry best practices.
• Updating this AML/KYC Policy on an annual basis or when regulatory changes require it.
• Serving as the primary liaison to regulators, auditors, and financial partners on all compliance matters.

16.2 Board Responsibility

TX Poker management ensures:

• Adequate resources are allocated to maintain full AML/KYC compliance.
• Recommendations from independent audits are reviewed and implemented.
• Oversight of all high-risk compliance issues is maintained at the executive level.

17. Policy Review

This Policy will be reviewed annually or sooner if:

• Laws or regulations change
• New risks are identified
• Technology systems are modified
• External auditors recommend updates

18. IRS Reporting Requirements for Deposits and Cashouts

TX Poker is committed to complying with all applicable U.S. Internal Revenue Service (IRS) regulations related to player deposits, withdrawals, winnings, and reportable cash transactions. Although TX Poker operates as a private social club and does not take rake or participate in gaming winnings, certain member transactions may still trigger IRS reporting obligations.

18.1 Form 8300 – Reporting Cash Transactions Over $10,000

In accordance with 26 U.S.C. § 6050I, TX Poker is legally required to file Form 8300 with the IRS and the Financial Crimes Enforcement Network (FinCEN) when:

• A member conducts cash transactions totaling more than $10,000 in a single transaction or in related transactions, and
• The transactions occur within a 24-hour period or appear intentionally structured to evade reporting thresholds.

TX Poker defines “cash transactions” as:

• Physical cash payments
• Money orders
• Cashier’s checks
• Traveler’s checks
• Certain pre-paid instruments

Not considered cash for Form 8300 reporting:

• Wire transfers
• ACH transfers
• Debit or credit card payments

18.1.1 Prohibition Against Structuring

TX Poker strictly prohibits structuring, meaning breaking a large cash deposit or withdrawal into smaller amounts to avoid triggering IRS reporting requirements. Employees must immediately escalate potential structuring attempts to the Compliance Officer (Joni Grady, CFO).

18.2 Recordkeeping for IRS Reporting

TX Poker maintains the following records for IRS compliance:

• Customer identity verification (via Sumsub)
• Transaction logs of deposits and cashouts
• Documentation supporting Form 8300 filings
• Notes on potential structuring behaviors
• Copies of all IRS submissions

Records are kept for a minimum of five (5) years, consistent with AML and IRS guidelines.

18.3 Reporting of Player Winnings (If Applicable)

Although TX Poker does not serve as a gaming operator and does not take rake, should any promotional winnings, tournament payouts, or other taxable events be issued by the Club in the future, TX Poker will comply with applicable IRS reporting, including:

• Form W-2G when required
• Collection of member Social Security Numbers
• Submission to IRS per reporting thresholds

If TX Poker does not issue winnings directly (i.e., players only win funds wagered among themselves), W-2G reporting does not apply. However, members remain individually responsible for reporting their own gambling winnings as required by federal law.

18.4 Customer Notification Requirements

When TX Poker files Form 8300, customers will receive a written notification as required by the IRS. This notice:

• Will be sent by January 31 of the year following the reportable transaction
• Will not disclose any internal AML analysis or monitoring
• Will not compromise SAR confidentiality or AML processes

(This notification is separate from AML-related SAR filings, which must never be disclosed to the customer.)

18.5 Monitoring for IRS Reporting Triggers

TX Poker monitors all deposit and cashout transactions to identify:

• Cash transactions near the $10,000 threshold
• Attempts to bypass reporting (structuring)
• Rapid or irregular deposit/withdrawal patterns

Suspicious activity falling outside IRS reporting may still require a Suspicious Activity Report (SAR).

18.6 Responsibilities of the Compliance Officer

As the designated Compliance Officer, Joni Grady, CFO, is responsible for:

• Reviewing transactions for IRS reporting triggers
• Filing Form 8300 when required
• Maintaining proper documentation for IRS audits
• Ensuring employees are trained on cash reporting obligations
• Escalating suspicious activity as appropriate

19. Conclusion

TX Poker is committed to maintaining the highest standards of integrity, transparency, and regulatory compliance in all aspects of its operations. As a private, members-only social club, we recognize the unique risks associated with real-money play and the responsibility to ensure that our platform is never used to facilitate money laundering, terrorist financing, fraud, or other illicit activities.

Through rigorous identity verification, robust transaction monitoring, continuous screening, and strict adherence to IRS reporting requirements, TX Poker proactively safeguards both the Club and its members. This AML/KYC Policy reflects our dedication to responsible operations and will be reviewed regularly to ensure it evolves alongside emerging risks, regulatory changes, and industry best practices.

Our goal is to foster a secure, fair, and trustworthy environment for all members who choose to be part of TX Poker.