Pubdate: Sat, 14 Oct 2017
Source: Victoria Times-Colonist (CN BC)
Copyright: 2017 Times Colonist
Contact:  http://www.timescolonist.com/
Details: http://www.mapinc.org/media/481
Page: A12

DRUG MONEY INFECTS CASINOS

A new window onto B.C.'s fentanyl crisis might have opened. It appears
organized crime groups are using casinos to launder enormous
quantities of cash, some of which comes from the traffic in street
drugs. Not all of the laundered money derives from this source. But
Canada-wide, illicit-drug sales account for nearly 60 per cent of
gang-related income. In B.C., that could amount to $5 billion or more,
a portion of which was certainly raised selling fentanyl.

It's been known for some time that casinos offer an attractive way to
cloak the proceeds of crime. Gang members can claim they came by their
cash playing poker.

But it appears casino-based laundering is far more extensive than was
previously understood. It also appears Christy Clark's former
administration knew the facts for some time and failed to respond
effectively.

In 2015, Clark's government commissioned a report on the relationship
between organized crime and casinos. But when it became evident the
contents were explosive, the report was quietly buried. It came to
light only last month when Attorney General David Eby released a
summary version.

The findings are in three parts. First, huge volumes of unsourced cash
are being dropped off at casinos, usually late at night.
Law-enforcement agencies believe this money is gang-related, and there
are instances of "patrons" sitting down to gamble with hundreds of
thousands of dollars. Most of the casinos involved are in the Lower
Mainland.

Second, security is far too lax at some of the most highly frequented
casinos, and staff are inadequately trained to spot suspicious
activity. Yet it's known that a small number of patrons - perhaps no
more than 100 - account for a significant portion of the cash changing
hands.

Third, there are serious conflicts of interest. Casino operators have
limited regulatory responsibilities, meaning their principal focus is
on generating revenue.

As a result, there is little incentive to ensure that high-risk
patrons are identified and banned. The River Rock Casino Resort has
allowed cash buy-ins in excess of $500,000, without determining the
source of the funds.

The province also has a conflict of interest. Any measures taken to
drive money-laundering out of casinos would reduce the profits of the
B.C. Lottery Corporation. And the government relies on the corporation
for more than $1 billion a year in dividends. That might be one reason
the report was buried.

A partial solution is to set limits on cash buy-ins. Unfortunately,
so-called VIP patrons are developing ways around this, such as using
bank drafts and electronic money-transfer systems that might not
reveal the true source of the funds.

Better staff training is definitely a necessity, and casino operators
must be held to a higher standard of accountability.

But the real problem has been government lethargy and a policy of
looking the other way. The lure of vast sums of cash has blunted any
meaningful attempts at reform.

Eby at least understands the magnitude of the challenge. He has hired
Peter German, a former deputy commissioner of the RCMP, to conduct a
review. The report is to be completed by March of next year. German is
one of Canada's leading authorities on money-laundering schemes.

Yet more reams of paper will not change the essential fact: There is
an incestuous relationship between Lower Mainland casinos and
organized crime. Neither can flourish without the other.

For real change to occur, the entire culture of the industry must be
altered. And that will happen only if Eby embarks on a far-reaching
cleanup.
- ---
MAP posted-by: Matt