BCLC GETS A BOOST
More power over casinos
The B.C. Lottery Corp. is being given more power to monitor casinos and hand out tougher punishments, Attorney General David Eby says.
The mechanism will be a rewording of the agreement the BCLC periodically signs with casinos to provide gambling facilities in B.C.
The move comes as an independent review continues into allegations of money laundering in casinos and as more criminal charges are expected out of the RCMP’s investigation of an alleged organized crime network that used VIP gamblers to buy chips in B.C. casinos with suspected drug cash.
The BCLC’s new terms of service will require casinos to submit annual business plans. Failing to adhere to these plans could result in penalties. In an interview on Thursday, Eby said the agreements also allow the government to incorporate any recommendations from his appointed independent reviewer, Peter German.
The government will be able to impose escalating punishments, ranging from warnings to licence cancellations, more quickly than in the past, Eby said.
Eby appointed German in September after an audit by MNP showed that roughly $13.5 million in $20 bills was accepted in Richmond’s River Rock Casino in July 2015.
Police fear much of the cash was the proceeds of crime.
Eby said B.C. casino operators have always had the authority to reject suspicious cash on the spot, and he has asked German to examine the circumstances under which casino staff have accepted suspicious transactions, and to make recommendations.
“It is critically important for me that if Mr. German or the police or the BCLC identify any problem with a service provider not following policy, we are able to act quickly and proportionately,” Eby said.
In a statement, Terrance Doyle, chief operating officer of the company that runs River Rock Casino, said: “Great Canadian was pleased to be consulted by the BCLC, along with other operators, over the last year as these operational service agreements were updated and developed. We fully support the minister for appointing Mr. Peter German to review (anti-moneylaundering) practices in the industry (and) are looking forward to the outcome of his report.”
It is not clear whether the BCLC’s new agreement will adopt some of the tough policy recommendations already made by MNP in its report. The new agreements will be for 20 years, and are to be signed as existing casino contracts with the BCLC expire.
MNP’s audit said the majority of suspect cash was presented to River Rock Casino staff by “high roller Asian VIP clients” from China. Investigations showed some VIPs had been allowed to purchase gambling chips at River Rock with more than $500,000 in small bills at a single time, and casino staff accepted the cash even though the source of funds was not known.
MNP recommended that “casinos refuse unsourced cash deposits exceeding a certain dollar threshold until the source can be determined and validated.” Other issues identified included the role of River Rock VIP host staff, who are given incentives to maximize high roller revenue.
According to government documents released through freedom of information, similarly alarming transactions have occurred widely in Metro Vancouver casinos since at least 2010.
In June 2010, B.C. gaming enforcement branch documents say there were “allegations of improper activities by VIP hosts and allowing loan sharks to operate” at Vancouver’s Edgewater Casino. This was not reported to police, and it’s not known whether the BCLC acted on the concerns.
And in May 2010, partly redacted documents say, a man entered River Rock Casino and bought chips with $460,000 in $20 bills. The casino reported “none of (the man’s) actions while in the casino were suspicious, i.e. loan sharking or money laundering,” a document says. It was the fourth such large cash transaction for the gambler that month.
An April 2010 report at River Rock said a number of gamblers entered the casino with $50,000 stuffed into a shopping bag, all in $20 bills. “They receive the chips (at a gambling area) and then, with minimal play, leave the casino with $50,000 in chips,” the casino report says.
At the Starlight Casino in New Westminster in May 2010, a man entered carrying chips worth $1.2 million and immediately had casino staff convert the chips to cash, a report says. The cash was stuffed into a suitcase. The man said he was about to catch a plane to Montreal and was concerned airport security would question him. He requested and was given a letter from casino staff confirming the money was a casino payout, documents say, before departing the casino as a passenger in a Lexus.
The same month at Starlight Casino, a gambler lost all his money at one table, and then “gets picked up by a light-coloured Toyota,” a casino report said. “(He gets) dropped back off five minutes later carrying a large white plastic bag … holding $300,000 in $100 bills. He uses the money as a buy-in at the cage.”
None of these incidents from 2010 was reported to police, according to documents. In 2011, the B.C. government reviewed antimoney-laundering procedures, purportedly to address concerns surrounding these red-flagged transactions.
The BCLC said Thursday, in response to questions from Postmedia: “BCLC has always had the ability to set and enforce policy with respect to security and compliance matters … Staff in casinos can and do reject transactions.”
Gamblers entered the casino with $50,000 stuffed into a shopping bag, all in $20 bills.