B.C. casinos knowingly accepted banned cash: confidential report
River Rock Casino in Richmond knowingly accepted millions in suspicious cash that was provided to VIP gamblers by lenders who were banned from B.C. casinos, an internal audit obtained by Postmedia News alleges.
The June 2016 audit by the B.C. gaming policy and enforcement branch suggests that River Rock staff in 2015 allowed high rollers to buy chips with funds from Richmond private lenders who were under B.C. Lottery Corp. anti-money-laundering restrictions and who were subjects of a major RCMP investigation.
The audit and other enforcement branch documents, obtained by Postmedia through freedom-ofinformation requests, also conclude that banned high rollers used proxy bettors in schemes to skirt anti-money-laundering measures. Also, a review of play at high-limit tables at River Rock concluded a money laundering process known as refining — wherein gamblers buy chips with wads of $20 bills and cash out with neat bundles of $100 notes suitable for banking — was believed to be occurring, even though casino staff had measures in place to block these transactions.
The June 2016 audit of provincially banned cash facilitators asserts that, in 2015, three British Columbia casinos allowed gamblers to purchase chips with $6.7 million from illegitimate lenders. River Rock Casino accepted $5.37 million — 79 per cent — of that.
“Sites knowingly accepted cash that they acknowledged was obtained from questionable sources,” the documents say.
“Industry indicators of suspicious activity were present in all incidents in which the cage accepted the cash.”
Sonja Mandic, a spokeswoman for River Rock Casino operator Great Canadian Gaming Corp., referred all questions for this story to the B.C. Lottery Corp.
“As part of our commitment to continuous improvement, we will be undertaking a review of this matter to determine if further direction is required,” BCLC spokeswoman Laura Piva-Babcock said.
Edgewater Casino in Vancouver accepted $700,000 in cash from banned individuals, and Starlight Casino in New Westminster accepted $690,000, the audit says. Most of the $6.7 million was in $20 bills.
The findings shed more light on processes within B.C. casinos that may have allowed casino money laundering, as alleged in an RCMP probe. Postmedia News has reported that investigators believe organized criminals loaned suspected drug cash from an illegal cash house in Richmond to VIP high rollers recruited from Macau. These gamblers could pay back the loans in China through an alleged underground banking network, thus avoiding China’s tight capital-export controls, and ending up with cash to invest in Canada.
The reason for the cash audit, documents say, “was to determine if any of the individuals identified on the alleged fugitive list are gambling … The scope was to quantify the dollar amount of buy-ins conducted at casinos from cash sites … obtained/connected to individuals provincially banned for cash facilitation.”
Documents also say that in 2016, gambling auditors studied 47 VIP gamblers who were restricted by the BCLC from buying chips with cash unless they provided a bank withdrawal slip to verify the funds. These players still made multiple attempts to gamble with suspect cash, documents say, although casinos were able to stop most of these attempts. But 14 of the players were observed betting with suspect chips, the documents say, “either brought into the casino or received from players while inside the casino.”
Also, proxy gamblers were used to buy chips with cash and “made verbal bets for players who were under the directive,” documents say. “Essentially, sanctioned players used non-sanctioned players to gamble.”
The gaming enforcement branch conducted a review of refining concerns at River Rock VIP betting rooms based on past audits and because the Richmond casino collects the most high-limit table-gambling revenue in B.C., documents say.
“To prevent a patron from refining bills for the purpose of money laundering, sites are advised by BCLC to pay out patrons in the same denomination they bought in at,” documents say. However, this recommendation isn’t stated in BCLC policy documents.
Auditors wrote that at River Rock, “the site holds the view that patrons that buy-in with small-denomination bills can be paid out with big-denomination bills,” as long as floor staff judge that gamblers are betting reasonably.
Because B.C. casinos don’t have to record the denominations of bills they pay out, auditors had to study the flow of bills between River Rock’s high-limit cashier windows and the casino’s vault. Auditors looked at cash deposited by VIPs from July 1, 2015, to Dec. 31, 2015, and determined that 99 per cent of the $40-million worth of $20 bills used by VIPs to buy chips was sent from high-limit cashier windows to the casino’s vault.
The vast majority of $100 bills deposited to the high-limit cashiers — $50 million worth — were kept in the high-limit table area to pay out gamblers, the audit found. Another $90 million worth of $100 bills was transferred from the vault to the high-limit cashiers. This suggests that $20 bills not wanted by VIP players at River Rock were taken out of circulation at the casino, and $100 bills that were desired by gamblers were kept in play.
“Our analysis found that nearly all patrons that bought in with $20s were not paid out in this denomination,” auditors concluded. “It is reasonable to conclude that refining is occurring through the high-limit cages at River Rock Casino.”
The audit says the onus to report unreasonable play is on dealer supervisors and surveillance staff.
“River Rock does have criteria in place to help prevent refining for the purposes of money laundering, (but) … the notion that nearly all patrons were paid out with $100 bills, regardless of the denomination that they bought in with, in part suggests that the controls in place to prevent a patron from refining may not be functioning as intended.”