Responding to reports of pervasive money laundering in British Columbia gaming industry, Attorney General David Eby has announced the formation of a new Independent Gambling Control Office (IGCO). The new office will replace the Gaming Policy & Enforcement Branch (GPEB) next spring.
Between 2012 and 2015, a reported $100 million and as much as $2 billion may have been laundered through casinos in the Canadian province. Early reports suggested that Chinese high rollers may have washed some $1.7 billion in currency through patron gaming accounts (PGAs).
In May, BC Premier John Horgan established the Commission of Inquiry into Money Laundering, led by BC Supreme Court Associate Chief Justice Austin Cullen. The Cullen Commission was charged with looking at the full scope of money laundering in the province—in real estate, banking, and the corporate and professional sectors, and will “examine regulatory authorities and barriers to effective law enforcement of money laundering activities.”
With its dual role of establishing and enforcing gaming rules while also advising the province on gaming matters, the GPEB may have had a fundamental conflict of interest. The British Columbia Lottery Corp. (BCLC) contributed more than C$1.4 billion (US$1.07 billion) to the provincial government in fiscal 2018-19, reported CalvinAyre.com; a crackdown on casino transactions could be perceived as leading to revenue shortfalls at the government level.
Peter German, the former Mountie and author of a report on money laundering in British Columbia, recommended the establishment of an independent regulator with “the power to enforce regulations against the most significant entity in B.C.’s gaming environment.”
Meanwhile, earlier this month, Canada’s Financial Transactions and Reports Analysis Centre (FinTRAC) issued an alert regarding the use of bank drafts at BC casinos by “money mules,” who, “wittingly or unwittingly, transfer or transport proceeds of crime on behalf of a criminal organization or money launderer.”
FinTRAC warned gaming operators to be on the lookout for patrons who deposit a “high volume” of bank drafts to their casino accounts or regularly use bank drafts to buy chips.
