The days when international high rollers could count on British Columbia’s casinos as a hot money haven are coming to an end under a regime of strict controls planned by the province’s new government.
Gamblers looking to deposit cash or equivalent instruments worth C$10,000 or more will need to provide identification and proof of their source of funds, including bank and bank account details. Two consecutive large transactions will trigger added scrutiny.
Vigilance will also be beefed up with the placement of regulators from his office’s Gaming Policy and Enforcement Branch on site.
“Our government has made clear the urgency around addressing issues of money-laundering at B.C. casinos, and we will ensure these first two recommendations are not only implemented as soon as possible, but enforced on the ground,” said Attorney General David Eby, whose New Democratic Party swept the Liberal Party out of office in British Columbia in July.
The crackdown comes in the wake of an internal report commissioned by the previous government and released in September by the NDP which found high-risk cash transactions taking place at a Vancouver-area casino popular with “high roller Asian VIP clients,” according to a Reuters report.
The measures are among the first recommended by Peter German, a former deputy commissioner with the Royal Canadian Mounted Police appointed in September to investigate the issues and who is expected to provide his final report to the government early next year.
Eby accuses the former government of being soft on the kinds of high-level monetary crimes the new measures are designed to prevent and which include the movements of large levels of suspicious funds tied to Vancouver’s runaway housing market―to the point where a reputation was allowed to develop around B.C. casinos he termed the “Vancouver model”.
As he describes it, the “model” served as a tool for a complex network of criminal alliances whose strands include Chinese underground banks, money laundered from Vancouver into China and other locations, illegal drug networks in North America supplied by Chinese and Latin American gangs, and the facilitation of capital flight from China.
“The challenge to date has been a lack of political will to deal with this issue in any kind of significant way,” he said.
He added that the British Columbia Lottery Corp. is being given new enforcement powers that will allow the agency for the first time to directly impose fines and even suspend and revoke operating licenses.
Eby acknowledged that the crackdown will likely take a bite out of the C$2.9 billion-plus the province’s commercial gambling industry generates annually―and the sizable haul the government collects as a result.
“There will be an impact on gambling revenue, I don’t see any way around it, because the people who are alleged to be involved in money laundering are also significant gamblers,” he said. “But it’s a mistake to think that money that could be coming from, for example, the sale of addictive illicit drugs and laundering through the casinos doesn’t have some cost somewhere else in our system. You may be making money on the gambling side but you are losing on the health side.”
