On on-going inquiry into the gambling regulator in British Columbia (BC) has found that it has failed to adhere to reporting requirements. The problem is related to suspicious cash transactions for casinos.
This decision follows on an interview with the former director of BC Lottery Corp regarding money laundering in the province. The investigation begun in February in the face of an apparent significant distortion of the regional economy.
The failure to report large cash buy-ins is among the violations. According to John Karlovcec, the former director of the regulatory body and BC Lottery, the largest casino in BC, River Rock Casino, did not always report suspicious cash buy-ins.
There were two particular occasions of CAD$450,000 with transactions in $20 bills. At least one should have triggered scrutiny.
In addition, to make matters worse, River Rock and the other casinos used to resist measures aimed at improving anti-money laundering (AML) controls. They felt they would impede the coveted high-rollers.
Karlovcec also revealed that the regulator’s primary focus was to ensure that suspicious transactions were reported to FINTRAC, Canada’s financial transaction reporting center.
He said that reporting non-compliance practice was systemic, and he referred to his positive relationships with compliance personnel at casinos.
As a former director of BC Lottery, it was not within his purview to demand casinos to refuse cash buy-ins or even to investigate cash as possible proceeds of criminal activities. He avowed that the federal regular was always apprised of oddities.
Beyond the failure to report buy-ins, the River Rock also avoided calling attention to large cash transactions close to or over $50,000. These also were done in small bills. Karlovcec agreed that this was in violation of FINTRAC’s requirement to report cash transactions of $10,000 and above.
Suspicious transactions were specifically detailed. A River Rock patron had bought in $1.8 million over just seven days, largely in small bills. Certainly it was suspicious reported to FINTRAC, BC’s gaming policy and enforcement branch, as well as the police per Karlovcec.
In 2014, the lottery noticed players at River Rock were not cashing out their chips, but it was impossible for both the casino and the regulator to track chips leaving the premises. In point of fact, casino rules prevented their chips to be used at other gaming establishments.