Growth at British Columbia’s troubled casinos has slowed significantly since the introduction of new anti-money laundering (AML) regulations nearly two years ago.
Revenues for the province’s largest casinos rose by just 0.1 percent over the previous year, according to data provided by Business in Vancouver. That’s compared with growth of 4.4 percent in 2014.
The province was surprised by the extent to which illegal banks were able to launder dirty cash from drug sales through their casinos.
Since January 2018, BC has adopted new AML policies allowing casino customers to spendCA$10,000 or more in a 24-hour span to show the source of the funds. In the meantime, regulators are now monitoring high-risk venues 24-7.
An independent report commissioned by the new provincial AG, David Eby, found that operators and regulators were willing to turn a blind eye to large cash transactions that turned BC casinos into an organised crime laundromat, according to the document.
According to Business in Vancouver, one of the worst offenders reported by officials, the River Rock Casino in Richmond, remains the province’s highest revenue producer.
The casino reported $323.7 million for 2018, but that was down 22.9 percent from the record high of $420 million in 2014, a year before the problem was revealed, reportedly at its height when money laundering.
Although 52 percent of their revenue came from slots in 2018, their table games produced an average of $1.7 million per table, more than any other top five casino.
So rife was BC money laundering problem that the international intelligence community had taken as “the Vancouver Model” to refer to the process of washing illegal proceeds through the VIP casino section.
“We are famous internationally – or, more accurately, we have become infamous – for money laundering,” BC Attorney General Eby told a federal parliamentary committee in 2018.
The Vancouver Model involves “underground banks” with connexions to drug trafficking. Until they arrive in BC, Chinese VIP visitors plan to borrow money, allowing them to sweep strict controls on moving money from China.
They agree to transfer the equivalent amount from their Chinese bank account to another Chinese-based account before leaving China.
Meanwhile, with the underground bank in BC, criminals will deposit cash obtained by selling drugs and other crimes. The cash is then lent to the high rollers, who at BC casinos are covering it up into chips. They play a little before they get a check from the casino for their remaining chips.
The criminals receive from the Chinese bank account an equivalent payment.