Nearly two years after rejecting regulators’ recommendations to stop money laundering at casinos in British Columbia, Canada, the B.C. Lottery Corporation recently imposed new restrictions. Attorney-General David Eby said, “The rule changes are not glamorous or innovative. To many people – including me – they seem like common sense. If you can’t prove where you got your duffel bag of cash from, the casino is not allowed to accept it. The reason for the change is that, remarkably, B.C. didn’t have it in place already.”
The changes were made in response to recommendations from Eby’s special adviser and former Royal Canadian Mounted Police Deputy Commissioner Peter German. He was appointed to review policies on preventing money laundering following a report that River Rock Casino in Richmond had accepted $13.5 million in $20 bills within one month, which police said could crime-related.
Under the new rules, before they are allowed to gamble, high rollers must verify the source of their funds if they want to buy $10,000 or more in chips within a 24-hour period at a B.C. casino, whether they use cash, bank drafts or certified checks. If a customer will not provide the required information, or provides information that is suspicious, the casino must deny the transaction and notify government authorities, who will begin an investigation.
Another recommendation is to have investigators on site 24/7 at high-volume casinos in the Lower Mainland.
Regulators have urged BCLCL since 2015 to refuse to accept money in casinos until a gambler’s source of funds could be verified. Suspicious cash transactions declined after reaching a peak in 2015, when B.C. casinos took in $137 million in $20 bills alone that were considered suspect. However, non-cash alternatives, like bank drafts, increased. A report stated, “Because bank drafts cannot always be attributed to a specific individual’s bank account, they can present similar risks to unsourced cash.”
In a July, 2016, B.C. Gaming Policy and Enforcement Branch General Manager John Mazure sent a letter to the BCLC, stating the Crown corporation responsible for casinos “should contemplate not accepting funds where the source of those funds cannot be determined or verified. This approach could include, for example, a source of funds questionnaire and a threshold amount over which BCLC would require service providers to refuse to accept unsourced funds.”
But BCLC Chief Executive and President Jim Lightbody responded that source-of-funds inquiries already were being diligently tracked to the standards required by the Financial Transactions and Reports Analysis Centre of Canada. Eby said at the time the government was concerned about losing casino revenue. “The challenge, I think, with deciding to do something about it was the recognition that it was going to have an impact on gaming revenue,” he said.
German said more work will be required to stop money laundering in B.C. casinos. “It’s premature to say what impact it will have. In my view, there are a whole lot of pieces that fit together in terms of what we are dealing with here. There is no expectation that one or two recommendations will change the landscape,” he said.
