Two Canadian provinces are wrestling with the problem of money laundering at casinos.
British Columbia Attorney General David Eby recently announced changes to be implemented at provincial casinos to help curb money laundering, including staffing larger casinos round-the-clock and requiring operators to file source-of-funds declarations for certain transactions. He said the previous B.C. Liberal government was to blame for lax enforcement of gambling rules, which has damaged the province’s reputation.
Under one new rule, enforcement officers will staff the province’s larger casinos 24/7 rather than 9 a.m. to 5 p.m., Monday through Friday. “It does indeed seem like a common sense recommendation to me that the regulator be available around the clock in high-volume, high-risk areas like Lower Mainland casinos,” Eby said.
In addition, operators will be required to file a source-of-funds declaration for cash and cash equivalents in excess of $10,000. “It may seem like common sense to British Columbians when someone shows up with a hockey bag full of $20 bills that there’s some kind of a problem there,” Eby commented.
Former Royal Canadian Mounted Police Deputy Commissioner Peter German, president of the International Centre for Criminal Justice Reform at the University of British Columbia and author of the textbook Proceeds of Crime and Money Laundering, was retained as a consultant by Eby in September, following an investigative report on money laundering at casinos. The series by Sam Cooper of Post media revealed in one month in 2015, $13.5 million in $20 bills moved through the River Rock Casino in Richmond.
“Where did the money come from? What was the crime or the activity that generated this money in the first place? And once it passes through the casino and out the other end, where does it go? Is it linked to other areas of our economy?” Eby asked. He said after the cash washes through the casinos, it may possibly be invested in legitimate businesses, such as the high-end real estate market. He said German may have more information soon. “I look forward to hearing more from him when he deems appropriate, and I look forward to his final report, which is due by March of 2018.”
Eby said his office is working on comprehensive legislation that could protect whistle blowers in the casino sector. In addition, he noted although casino gambling currently provides the province about $1 billion in annual casino revenue, “There is a distinct possibility that recommendations coming from Mr. German will impact gaming revenues. That is the price that the premier has been clear to me that we are willing to pay in order to ensure that British Columbians can have confidence that the proceeds of crime are not flowing through B.C. casinos.”
In Ontario, the Alcohol and Gaming Commission of Ontario (AGCO) has commenced the investigation of money laundering at Great Canadian Gaming Corp.’s River Rock Casino in Richmond.
AGCO, which regulates gaming in the province, has asked the Royal Canadian Mounted Police (RCMP) and other law enforcement agencies, including the Attorney General for Ontario, to begin an investigation, which was sparked by reports done for the government.
The reports allege that large amounts of suspicious cash have not been subject to enough scrutiny at the Great Canadian, which is in the running to develop three casinos in the Greater Toronto Area (GTA.)
Great Canadian COO Terrence Doyle protested in an email to the Globe and Mail, that the company “has a culture of integrity and transparency founded on our strict compliance with the regulations in all jurisdictions where we do business, including Ontario.”
Noting that the company speaks regularly to AGCO and the Ontario Lottery and Gaming Corporation (OLG) under which it operates the casino, Doyle said, “To be clear, to our knowledge our company is not under investigation in any jurisdiction. With respect to reports in BC, our employees followed all procedures required of them by BCLC [BC Lottery Corporation] and we do not believe our company’s actions would give cause to initiate any investigation.”
The investigation is unwanted, particularly at this time because Great Canadian is in the bidding for more casinos in the province to modernize the province’s casinos. Great Canadian has said it is in the short list for bidders to develop three sites in the GTA.
OLG reportedly could announce the winner of the bid this week. However, that raises the question of how it could be named the winner when B.C. Attorney General David Eby has launched an investigation targeting Great Canadian’s casino.
Opposition members have called on the government to postpone modernization until the probe is completed.
In one report from the B.C. Gaming Policy and Enforcement Branch, issued in July 2016, the Great Canadian River Rock Casino accepted $13.5 million in $20 bills in July 2015. The money came from unknown persons.
