Crime

BC Officials Examine Cashless Casinos in Bid to Banish Specter of Money Laundering

Could cashless casinos be coming to British Columbia? Officials in a province that has been scandalized by revelations of widespread money-laundering at its casinos over the past few years are asking the question.

Could cashless casinos solve British Columbia’s money-laundering problem? Officials in the city of Delta believe so and have called on federal and provincial governments to participate in their research. (Image: RHINO™ Casino Management System)

Councilmembers for Delta — a small city in the Greater Vancouver area — want the provincial and federal government to join its review of the concept, which it believes could provide an antidote to the images of sports bags filled with $20 bills that have filled the news and stained the reputation of the BC casino sector in recent years.

An independent report commissioned BC AG David Eby published last June concluded the province’s casinos had become a “laundromat for the proceeds of crime,” due to underground banks with links to drug trafficking and even terrorism.

‘The Vancouver Model’

The banks allowed criminals to deposit drug money and receive payments in return into Chinese bank accounts.

The dirty cash could then be lent to Chinese high-rollers on VIP junkets, who — thanks to BC casino’s lax anti-money-laundering (AML) procedures — could gamble the cash with few questions asked, before settling up with the shadowy moneymen, usually once they had returned to the Chinese mainland.

This model of casino money laundering was so rife in BC that global intelligence services began referring to it as “the Vancouver Model.”

The City of Delta has no casinos, but it has recently authorized one. On November 13, 2018, the BC Lottery Corporation announced the approval of a new gambling and entertainment facility in Delta, to be called the Cascades Casino, which will be owned and operated by Gateway Casinos.

Delta is close enough to the scandal to feel nervous about its new casino. It borders Richmond, home to the River Rock Casino, which was singled out as the hub of the money laundering networks, around 10 miles away.

Cashless Casinos Offer Transparency

According to the Cloverdale Reporter, Delta’s new mayor, George Harvie, pushed for a cashless casino during his election campaign, citing New Zealand as jurisdiction where a card-based system had worked effectively.

“Cashless systems require an account that is linked to the individual player whose identity has been verified,” a Delta staff report explains.

“This means that gambling data can be tracked and money transactions are transparent, thereby limiting opportunities for crime such as money laundering,” it continues. “Funds can be moved electronically between the account and all gaming devices in the casino.”

In the wake of the damning report into its AML failures, BC regulators mandated that operators must file a report on the source of any buy-ins of more than C$10,000 ($7,500) and that players must provide a receipt from their bank as proof of source of funds.

Philip Conneller

Global and Tribal Gaming, Casino Business, International Crime, UK Gaming---- In Philip Conneller’s seven years with Casino.org, he has covered the gaming industry from Las Vegas to Macau and everything in between. Previously the original features editor for poker’s Bluff US and editor for Bluff Europe (which he helped launch), he has also written for iGaming Business, eGaming Review, and numerous other industry news sites. His news stories for Casino.org have been linked by the Washington Post, the Daily Mail, People Magazine, and Jimmy Fallon's Tonight Show, among many others. Philip lives outside of London with his wife and children, and frequently travels to the EU. Email: philip.conneller@casino.org

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Philip Conneller