In the three-year period between 2012 and 2015, a reported $100 million and up to $2 billion was reportedly laundered through British Columbia casinos. The investigation that followed along with a change in provincial law caused casino revenues to stall in 2018.
A survey of the 20 largest casinos in British Columbia compiled by Business in Vancouver showed that casino revenues rose from CA$79.7 million (US$6 million) in 2014 to CA$85.6 million in 2018. But in 2018, the total rose just 0.1 percent over 2017. An annual report released by the British Columbia Lottery Corp. (BCLC) showed that revenues were flat at CA$1.9 billion in the 12 months that ended on March 31. Slots were up 2.6 percent while table games fell 7.8 percent from 2018.
To curb money laundering in casinos and other affected industries, including real estate, auto sales and jewelry sales, in December 2017 the BCLC tightened its AML rules, and required that casinos identify the source of funds for transactions of $10,000 or more. Unsourced cash over $10,000 is refused. It also hired additional casino investigators to ensure an enhanced presence at casinos during peak hours.
According to a 2018 report in the Vancouver Sun, the new rules had an immediate negative impact on revenues at the River Rock and Parq casinos, an impact that continues to be felt.
At River Rock, a Great Canadian Gaming property and the site of significant money laundering activities, 2018 revenues came in at CA$323.7 million, a 22.9 decline from 2014. While 52 percent of its revenues came from slots in 2018, its table games generated an average of $1.7 million per table, more than any other casino in the top five.
“We are famous internationally—or, more accurately, we have become infamous—for money laundering,” BC Attorney General Eby told a federal parliamentary committee in 2018.
But gaming regulators and others in the industry say the problem of money laundering, at least as it involved casinos, was resolved years ago.
“These things are not going on today,” said Paul Burns, president and CEO of the Canadian Gaming Association, in an interview with GGB News in October. Burns said casinos in British Columbia and the BCLC reported suspicious transactions as required, passing the ball to law enforcement and fulfilling their legal responsibility. The casinos “filed all necessary reports,” said Burns. “They were never sanctioned or fined by FinTRAC (the Financial Transactions and Reports Analysis Centre of Canada) during the period in question or subsequently.”
According to Burns, FinTRAC “performs regular audits and never found deficiencies in any of the casinos’ or BCLC’s reporting.”
Toronto-based gaming law attorney Michael Lipton of Dickinson Wright LLP agreed that the onus was on law enforcement to act on suspicious transaction reports that were duly submitted by casinos. “In this instance,” he said, “I think there was a failure by some of the law enforcement authorities and regulatory individuals.” He added that the activity was “centered in a couple of casinos in the province, which is indicative it was not endemic to the whole province.”
Last May, Premier John Horgan established the Commission of Inquiry into Money Laundering in British Columbia, led by BC Supreme Court Associate Chief Justice Austin Cullen. The Cullen Commission is 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.” The task force must submit its initial findings by May 2021.
