Public Inquiry Concluded, Canadian Gaming Industry Awaits Money Laundering Report

October 21, 2021
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After two years of testimony from around 200 witnesses and receiving closing submissions, a special commission is close to wrapping its high-profile investigation into the flow of millions of dollars in dirty money through British Columbia’s gaming industry.

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After two years of testimony from around 200 witnesses and receiving closing submissions, a special commission is close to wrapping its high-profile investigation into the flow of millions of dollars in dirty money through British Columbia’s gaming industry.

“It’s about taking a look forward so there is something constructive coming out of all of this,” Paul Burns, president and CEO of the Canadian Gaming Association (CGA), told VIXIO GamblingCompliance on Wednesday.

Burns noted that the public inquiry being led by a former British Columbia judge does not focus on incidents that occurred over the last four to five years, but incidents from a decade ago. What has become clear, Burns said, is that over that time “the industry is a strong player in the anti-money laundering regime.”

The commission on Tuesday concluded public testimony into money laundering after three-days of closing submissions from the governments of British Columbia and Canada, the British Columbia Lottery Corporation (BCLC), and 21 other organizations and individuals.

“There is still much to be done by the commission and myself,” said Austin Cullen, a B.C. Supreme Court justice who has overseen the public inquiry.

Cullen was appointed by the provincial government in 2019 to lead the public inquiry into reports of serious money laundering in the gaming industry. The commission’s mandate includes making findings of fact on the extent, growth, and methods of money laundering in British Columbia.

The inquiry is also looking into whether the acts or omissions of regulatory agencies and individuals “contributed to money laundering in the province or amount to corruption,” according to the commission’s website.

Cullen said he hopes this process “will bring some reason and rationale to the issues that confront us.”

Burns agreed, saying the the goal of anti-money laundering policies should be to disrupt illegal activity.

“When they commit [financial crimes] are people getting arrested? Are they being charged?” asked Burns. “That is deterrence. You really shouldn’t do it, or you’ll get caught.”

The Cullen Commission’s final report will be released by December 15.

It has been several years since an official report titled “Dirty Money” described a history of money laundering and criminal activity in lower British Columbia casinos, claiming the facilities managed by BCLC and contracted private operators “unwittingly served as laundromats for the proceeds of organized crime.”

The 2018 report for the B.C. attorney general’s office found that more than $100m had been laundered through British Columbia casinos for well over a decade and that existing legislation and policies were not able to keep pace with organized crime.

Bill Smart, a lawyer for BCLC, testified that knowledge about money laundering and strategies to detect illegal activities have evolved over the years.

“Money laundering is complex and has become increasingly sophisticated and international in scope over the last 15 years,” Smart said.

He said prior to 2015, it was not uncommon for gamblers to arrive at Vancouver-area casinos with bags filled with cash, and they would return the next day with even more cash.

“The cash may have been suspicious, but the patrons and their wealth generally were not,” Smart said. “Viewed from the lens of what we now know, everyone should have responded more quickly to those large transactions.”

Jacqueline Hughes, a B.C. government lawyer, testified that commissioners have all heard “extensive evidence of what transpired in the gaming industry.” Still, she urged the commission to look at future efforts to combat money laundering rather than point blame at what occurred at provincial casinos.

“We’ve heard at times the Gaming Policy and Enforcement Branch (GPEB) and BCLC held different views on the nature and scope of money laundering that was occurring at casinos and different view on what steps need to be taken to address these issues,” she said.

Hughes reminded Cullen that they both agreed on one thing, that active engagement from law enforcement was needed to ensure the disruption of organized crime and the deterrence of money laundering.

Hughes stressed that the way to combat money laundering is through continued collaboration between gaming companies, regulators, law enforcement agencies and governments.

“We note that the commission can make a finding of misconduct, but the province submits that this should not be the principal focus,” she said.

Hughes said the commission’s most important work will be the “recommendations it makes toward a path forward.”

“One of the key [issues],” Hughes said, “is there are multiple views of the key events, and it is up to the commission to determine what findings can be made. A finding of past acts will need to be made to inform those future recommendations.”

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