Casino operator Great Canadian Gaming Corp is pushing back against media reports of rampant money laundering activity at its River Rock Casino Resort in Vancouver.
On Monday, Great Canadian issued a statement in response to a flood of media reports over the past month regarding allegations of shoddy anti-money laundering practices at River Rock, which were revealed via the publication of a long-buried government report into British Columbia casinos’ willingness to accept chip purchases worth millions of dollars from Chinese VIP gamblers bearing sacks of $20 bills.
The latest revelations came on Friday, when the Vancouver Sun reported that Great Canadian execs had met with managers at the British Columbia Lottery Corporation (BCLC) – which oversees gaming operations in the province but contracts out day-to-day casino management to companies like Great Canadian – in 2014 regarding a VIP’s chip purchase using $645k in small bills.
The discussion revolved around the VIP’s use of unsourced cash and $5k chips provided to the VIP via casino parking lot deliveries from suspected criminal elements. The discussion also revealed that ‘large amounts’ of $5k chips purchased from River Rock had ‘gone missing.’
The Sun reported that the central figure in this discussion played a key role in the Royal Canadian Mounted Police investigation into a private money-lending business that resulted in money laundering charges being filed against two individuals last week.
The BCLC exec reportedly planned to directly intervene with VIPs at the center of the sketchy casino buy-ins, but River Rock execs preferred to interact with the VIPs themselves first.
The VIP in question had previously been funding his River Rock gambling via a so-called patron gaming fund (PGF), a non-cash casino account that only accepts deposits from recognized financial institutions. BCLC reportedly expressed particular concern that the VIP’s $645k cash buy-in occurred after his PGF had been established.
Recently released documents indicate that River Rock handled nearly 80% of the $6.7m in sketchy BC casino buy-ins in 2015. Great Canadian oversees 22 gambling properties in Canada and the United States but River Rock accounted for 42% of its 2015 revenue.
GREAT CANADIAN RESPONDS
In Monday’s statement, Great Canadian CEO Rod Baker took pains to point out that, “contrary to suggestions in certain media reports, to our knowledge our company is not under investigation in any jurisdiction.”
Under Canadian law, casino operators don’t report suspicious transactions directly to Canada’s federal financial watchdog FINTRAC but instead file suspicious activity reports with the provincial gambling monopolies like BCLC.
Baker notes that BCLC “has the obligation to independently review [unusual and large cash transaction reports] and to assess whether these reported transactions raise concerns sufficient for BCLC to deliver their own reports on these transactions to FINTRAC.”
FINTRAC has in the past taken issue with BCLC’s oversight of suspect transactions at River Rock and other BC casinos. In a letter sent last year but only recently made public, FINTRAC claimed BCLC compliance staff found River Rock staff lacked proper training to identify what qualified as a suspicious transaction.
But Baker insisted that Great Canadian employees “followed all procedures required of them by BCLC” and that the RCMP’s filing of charges against the private lenders was only possible due to River Rock staff being “crucial to identifying these individuals to authorities.”
Baker also corrected media reports that it’s possible for “large sums of cash to be exchanged for checks at our facilities.” Baker said BC casinos can only issue checks for players’ “verified winnings” that don’t include the buy-in amount. Initial cash buy-ins are “only returned to the player in cash,” although there is a ‘convenience check’ policy that allows returns of cash buy-ins of up to $10k per week.
Gamblers can also receive a BC casino check from a PGF, but these checks are “clearly and uniquely marked as ‘return of funds, not gaming winnings’.”
It seems obvious that this investigation has a long way to go before it’s wrapped up, and further salacious details will continue to generate negative headlines for BC’s gaming industry.
These headlines will likely intensify discussion of the inherent conflict of having BCLC act as both operator and regulator of gaming in the province, placing the ‘unregulator’ in the uncomfortable position of serving as one of the provincial government’s primary revenue generators while simultaneously being responsible for clamping down on behavior that negatively impacts its capacity to generate maximum revenue.