Reducing casinos' use of cash and increasing worker training are among provincial actions underway in response to recommendations to improve anti-money-laundering measures at B.C. gaming facilities.

The ministry's review, released today, confirmed the BC Lottery Corporation (BCLC) employs standard and appropriate anti-money-laundering strategies and the Province's Gaming Policy and Enforcement Branch (GPEB) has the required level of expertise and is capable of providing oversight related to anti-money laundering and associated criminal activities at gaming facilities.

The review also identified ways to further strengthen anti-money laundering strategies. To minimize the likelihood of criminal attempts to exploit these limitations, the Province has already begun work to address the recommendations.

A key objective is to transition toward greater use of electronic funds by making non-cash options more accessible and attractive to customers, while not discouraging legitimate play.

The review of anti-money laundering strategies at B.C.'s gaming centres was initiated in early 2011 by the Minister of Public Safety and Solicitor General to assess what strategies are in place and where opportunities exist for improvement.

The review is available online at:

www.pssg.gov.bc.ca/gaming/reports/docs/rpt-pssg-anti-money-laundering-measures-feb-2011.pdf

The action plan is available online at:

www.pssg.gov.bc.ca/gaming/reports/docs/plan-anti-money-laundering-measures-aug-2011.pdf

A backgrounder with recommendations and actions follows.

Contact:

Government Communications and Public Engagement
Ministry of Public Safety and Solicitor General
250 356-6961

BACKGROUNDER

Aug. 24, 2011 Ministry of Public Safety and Solicitor General

Casino integrity action plan

Recommendations to BCLC:

1) Create an audit trail by allowing casinos to pay by cheque customers who cash out after playing at a gaming facility.

Response: GPEB agrees that the buy-in/cash-out policy requires revision. GPEB and BCLC are working on a policy to have cash-outs payable by cheque for amounts less than a prescribed amount (TBD: between $5,000 - $10,000) to protect customers leaving casinos. These cheques will note that the funds were not from verified wins as recommended. Once other recommendations have taken effect to move the industry away from cash dependence, GPEB and BCLC will work on a policy to phase in cheque cash-outs for other amounts.

2) Enhance staff training to improve scrutiny of all buy-ins.

Response: Training programs for casino workers are being updated to stress that they must diligently apply anti-money-laundering practices to all customers, whether they are known to the workers or not.

3) Ensure casino staff's understanding of what constitutes money laundering is better aligned with that of law enforcement agencies.

Response: Policies and procedures are being updated to ensure this consistency.

4) Develop electronic funds transfer systems that maximize service delivery, create marketing opportunities and comply with anti-money laundering requirements.

Response: BCLC and GPEB are examining additional ways to move B.C.'s gaming industry away from being a cash business, and thereby build the industry's resistance to money laundering, while not discouraging legitimate play.

BCLC and GPEB have agreed to allow certified cheques to be used to cash-in at gaming facilities.

BCLC and GPEB have already developed and implemented a Patron Gaming Fund (PGF) program. The PGF account currently allows gaming customers to transfer money into B.C. casinos through electronic funds transfer from bona fide Canadian financial institutions.

There will be more changes to cash-related policies going forward, and GPEB has established a cross-divisional working group to support the transition.

Recommendations to the Gaming Policy and Enforcement Branch:

5) Ensure reporting relationships support an integrated approach and promote the perspective that registration, audit and enforcement/investigations lie on a compliance continuum.

Response: GPEB has established a new, cross-divisional working group dedicated to anti-money laundering issues to better integrate its various regulatory functions and focus on continuous improvement. These changes will improve strategic oversight and accountability, strengthening delivery of the branch's anti-money-laundering activities.

6) Develop an annual, unified registration, audit and investigations plan.

Response: GPEB will involve all areas of the branch in developing a unified registration, audit and investigations plan.

7) Formally involve police agencies in audit and investigations planning.

Response: GPEB will work more closely with and formalize involvement of police of jurisdiction and other related agencies in our priority planning process.

8) Establish more formal contacts and relationships with governance and enforcement agencies in other jurisdictions.

Response: GPEB will pursue a more formal expertise-sharing approach with its counterparts and relevant associations, in North America and around the world.

Recommendations to the Province

9) Engage an independent firm to support the creation of an electronic funds transfer system that delivers good service to patrons, is marketable, and fully complies with anti-money laundering standards found in the financial sector.

Response: Previous work with independent firms has helped the Province to incorporate best practices into its electronic funds transfer approach. GPEB and BCLC will work to implement recommendation 4 and move B.C.'s gaming industry away from its reliance on cash. To this end, they will engage appropriate experts to help identify and improve electronic funds practices.

10) Create a cross-agency task force to investigate and gather intelligence on suspicious activities and transactions at B.C. gaming facilities.

Response: GPEB agrees with this recommendation and will determine how best to implement this initiative after completing the other recommendations. In the interim, a more formalized approach and better co-ordination between interested agencies and BCLC has been established to ensure effective communication.

The review is available online at:

www.pssg.gov.bc.ca/gaming/reports/docs/rpt-pssg-anti-money-laundering-measures-feb-2011.pdf

The action plan is available online at:

www.pssg.gov.bc.ca/gaming/reports/docs/plan-anti-money-laundering-measures-aug-2011.pdf

Contact:

Government Communications and Public Engagement
Ministry of Public Safety and Solicitor General
250 356-6961