New Anti-Money Laundering Recommendations for British Columbia Casinos
On December 5, 2017, following an internal government review of the casino sector after allegations of transnational money laundering and illicit cash transactions in gaming facilities in the Lower Mainland, British Columbia (“B.C.”), the provincial government of B.C. recommended two new anti-money laundering regulations applicable to B.C. casinos.
The first recommendation requires any gambler who exchanges $10,000 or more in cash, cash equivalents, or bearer bonds to provide identification and, at a minimum, declare the source of the funds, the account the cash came from, and the financial institution in which the money was held. The casino will be required to record this information in a “Source of Funds Declaration.” In addition, after two consecutive transactions, the British Columbia Lottery Corporation will be required to review the transaction and apply a greater level of scrutiny in analyzing whether the funds are from a suspicious source. Although the exact process of verifying the cash has yet to be determined, casinos will be required to deny a third transaction until this review is completed.
The second recommendation requires provincial regulators from the Gaming Policy Enforcement Branch (“GPEB”) to be on site at high-volume and high-gaming limit casinos at all times. Previously, these provincial regulators were only required to be on site at casinos during regular business hours. Regulators will be expected to assist casino operators in identifying suspicious cash transactions, enforcing anti-money laundering protocols, and ensuring that the B.C. Gaming Control Act is complied with.
According to the Attorney General of B.C., the provincial government will continue to consider further anti-money laundering regulations and will implement any regulation necessary to better detect, monitor, and eliminate suspicious cash transactions.
Several burning questions remain:
1. Will other provinces follow in B.C.’s footsteps? It would be rare to so publicly have one province with higher anti-money laundering standards than other provinces.
2. What will likely be the effect on casino revenues with this higher standard? The recommendations may drive away high-roller gamblers with legitimate funds who gamble as a source of entertainment.