British Columbia gaming bodies slammed over money laundering, critic muzzling

bclc-money-launderingBritish Columbia’s government is in full damage control mode this week after media reports showed continued lapses in anti-money laundering controls at the Canadian province’s casinos and efforts to prevent gambling addiction specialists from talking to the media.

BC’s 17 brick-and-mortar casinos are run by the British Columbia Lottery Corporation gaming monopoly, which farms out day-to-day management of the facilities to private companies, whose activities are monitored by the Gaming Policy and Enforcement Branch (GPEB).

By law, BCLC must report all cash transactions over $10k to the FINTRAC federal watchdog, as well as any transactions deemed sufficiently sketchy to warrant further scrutiny. But BCLC casinos have been routinely cited for underreporting such transactions and spending lots of taxpayer dollars to prevent further scrutiny of its handling of these transactions.

Recent freedom of information (FOI) requests made by CBC News uncovered $27m in questionable transactions at two BC casinos in a three-month period this spring. The Starlight Casino in Westminster handled $2.5m in suspicious transactions while the River Rock Casino in Richmond handled a whopping $24m in sketchy exchanges.

The incidents include people showing up at the casinos with ‘shopping bags and suitcases’ stuffed with $20 bills, including one man with $800k and another with $1.1m. In most cases, the private firms operating the casinos reported these transactions to the GPEB, but police were rarely called in to investigate the individuals bearing these sacks o’ cash.

BC’s Ministry of Finance, which oversees BCLC, issued a statement saying it had made great strides since 2011, when FINTRAC began publicly rebuking BCLC for its anti-money laundering lapses. The Ministry said “cases where there are findings of suspected criminal activity are shared with the police of jurisdiction where appropriate” but that the authority to investigate lies with these police forces. The Ministry said any further questions on the subject should be made to the federal Royal Canadian Mounted Police.

Last November, the Ministry of Finance announced a pilot program to add slot machines to the list of shipboard entertainment options provided by BC Ferries, the former Crown corporation that shuttles passengers between the mainland and Vancouver Island. This week, a FOI request by The Tyee revealed that BCLC wasn’t consulted on the issue before it became public, despite the fact that it would be responsible for overseeing the activity. Emails show BCLC’s then-CEO Michael Graydon contacted the Ministry following the announcement, saying “it would have been nice if Ferries had given us a heads up so we could be in a position to respond.”

In February 2014, a finance ministry official noted that “a significant amount of policy work, consultation and legislative drafting” would need to happen before the shipboard slots idea could set sail, but added that “it should be seen that the Ministry of Transportation is working on and promoting this rather than BC Ferries.” Trouble is, BC Ferries had already announced that the slots idea came out of a 2012 community engagement process.

Worse, the Ministry of Finance also ordered gambling addictions counselor Kuldip Gill not to talk about the ferry slots plan on local radio station CKNW. Gill, whose company Kuldip Counseling and Consulting has a contract with GPEB’s responsible gambling program, had been invited to appear on CKNW to discuss the potential impact of shipboard slots.

Gill decided to check with the government whether this was okay, only to be told by the GPEB’s executive director that “this topic is out of your area of expertise” and to direct all further inquiries to the GPEB’s communications director. A Ministry spokesman told The Tyee that it was not “appropriate for contract consultants to speak on behalf of government.”

The week’s developments underscore the inherent incompatibility of provincial gaming monopolies acting as both gambling regulator and operator. It also makes their demonization of internationally licensed online gambling operators ring even more hollow. A few years ago, when BCLC’s lackadaisical approach to anti-money laundering first began making news, York University law professor Margaret Beare noted that BCLC has “no reason to give a damn. Like everyone else, they’re in the business to make money.”