28 Jun

Casino Money Laundering Report urges BCLC Demotion

Report recommends BC gambling regulator be replaced.

Report recommend demotion of BC gambling regulator BCLCEarlier this year, following staggering allegations of millions of dollars worth of money laundering through BC casinos, Peter German issued an independent report on the matter. Within that report is recommendations for policy changes and other effective ways to prevent future incidents.

That report was partially released by BC Attorney General David Eby this morning, and the recommendations therein go far beyond what the British Columbia Lottery Corporation (BCLC), the long-time regulator of the province’s gambling industry, ever anticipated.

Probable Demotion of BC Gambling Regulator

Amid a multitude of suggestions, one of the key recommendations from Mr. German is that the BCLC no longer be in charge of regulator province’s gambling industry. Instead, he prescribes the development of a new primary regulatory body. This new regulator would oversee the BCLC, which would, in turn, take on a lesser role in the regulation of BC’s gambling market.

The report recommends the conception of a new, independent service delivery crown corporation. German suggests funding for the new authority come from provincial gambling revenue. Such revenue would also help to fund a special police task force—as designated in the report—to maintain a 24/7/365 presence within BC casinos; particularly those in Lower Mainland BC.

Money Laundering “Not an Asian Problem

The report acknowledges that high roller, VIP gamblers of Chinese descent were involved in the strain of money laundering that took place over a period of years in BC casinos. However, German urges future scrutiny not target any ethnic-specific demographics when investigating potential money laundering.

“It must be remembered,” writes German, “…that many of the high-limit gamblers who used dirty money to feed their gambling activities were dupes. Others were simply attempting to remove their own money from China, in order to make a life for themselves in Canada.

“We must always be mindful of the fact that organized crime survive because there is a market for its products,” he continues. “Those who purchase goods and services from organized crime are we, the public. This is not an Asian problem.”

On Wednesday, AG David Eby held a press conference in which he released some of the information in the report, which is expected to be released in full tomorrow. He made clear his intention to follow up on many of the recommendations therein.

“The era of inaction and denial is over,” declared Eby. “We are moving immediately to get dirty money out of B.C. Casinos.”

BC Casino Money Laundering Scandal

German’s report identifies the tandem relationship between BCLC and its parent regulator, the Gaming Policy and Enforcement Branch (GPEB), as the key components in a money laundering scandal that brought the BC gambling industry to its knees. Ongoing since at least 2012, the money laundering activities reached a pinnacle in 2015, when it was discovered $13.5 million in cash was cycled through one Lower Mainland casino in a single month.

Such exorbitant amounts of money filtering through the cash cage should have immediately triggered an abundance of red flags. Yet it did not. The GPEB and BCLC did nothing. It took a whistle-blower—one of the casino’s own employees—leaking information to local media to uncover what was really going on.

The report says the wide scope of money laundering “represents a collective system failure”. Removing BCLC from its role as primary BC gambling regulator is just one of many steps Eby is likely to undertake in the coming months.

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