The Canadian province of British Columbia may lose as much as CA$47 million annually from its budget if the interim ban on high-stakes table games remains. The proposal is part of the measures taken to combat money laundering in the wake of allegations of irregularities at Richmond’s River Rock Casino.
The report by British Columbia Lottery Corporation (BCLC) was made public last week and it revealed that restricting table games buy-ins to CA$10,000 can cost the industry a loss of revenue between $34.6 million and $87,7 million each year. The provincial crackdown on money laundering practices would also affect B.C.’s revenues generated from casino gaming taxes. The province could potentially lose anything from $18.6 million to $47,2 million from its annual budget.
The findings were published Thursday and they are the result of a confidential report commisioned by the province and conducted by HLT Advisory Inc. last year. It looked at the implications of restricting high-limit table games where the buy-ins exceed $10,000. In January, the provincial government implemented the interim ban, according to which casino players who spend more than $10,000 within 24 hours are required to fill out paperwork and prove the origin of their finances. The HLT review says that this rule would discourage high-rollers form playing at B.C. casinos.
Attorney General David Eby, who came to office last year, explains that the report was commisioned so that the potential lost revenue could be taken into account in B.C.’s 2018 budget. According to Eby, the province should not receive money which represents the proceeds of gang crimes in casinos. There will be no negative impact on the charities that are being partially or fully funded by casinos.
British Columbia Casinos’ Links with Organized Crime
Last year, Eby hired former Royal Canadian Mounted Police (RCMP) senior officer Peter German to conduct an independent review of organized crime and money laundering practices that have been linked with B.C. casinos. The results from it are expected by the end of March and German’s recommendations would probably tighten the current anti-money laundering (AML) measures as well as the control over implementing them.
According to AG Eby, the previous provincial government knew about the HLT report and about the many irregularities in casinos’ financial reports but instead of taking action to stop illegal activities, it chose to ignore it. Eby believes that the report was suppressed by the government – it was confidential until now. The reason behind the decision to keep the report underground was, he says, the impact AML measures would have on the provincial budget. According to him, the proceeds of organized crime have been laundered through B.C. casinos for years.
The River Rock Casino in Richmond issued more than 20 large withdrawal cheques in 2016, the highest of which was CA$2.4 million, a Canadian media investigation revealed. Some of these cheques were issued to patrons who, according to the casino records, did not buy in chips to play at the casino. It is believed that they deposited funds through bank drafts and created gaming accounts in the casino where they could store large amounts of money while playing at the casino or even without playing at all.
This raised red flags to investigators who claim that this scheme has been used for money laundering for many years. Another indication for illegal or at least suspicious activities were high-limit table games where VIP players lost huge amounts of money without declaring the source of their funds.
