The B.C. government’s tough new rules about cash in casinos has resulted in a dramatic drop in the number of people arriving with amounts over $10,000, but that appears to have led to an increase in the number arriving with amounts just under that limit.
Sam MacLeod, general manager for the gaming policy and enforcement branch of the attorney-general’s office, said authorities are now worrying that money launderers are simply finding new ways around the stricter rules introduced in January, 2018.
“We’re not getting those big bags of money, but we have to look at structuring and smurfing. We’ve seen an uptake in that,” Mr. MacLeod told a special workshop on disrupting money laundering held on the first day of the Union of BC Municipalities convention.
Structuring and smurfing refer to techniques for laundering money that involve spreading large amounts of cash around to more people or more locations in order to avoid detection.
The federal Conservatives promised Monday to begin an inquiry into money laundering in the real estate sector, if they form the government after the Oct. 21 election, adding they would work with partners in the industry to “root out corrupt practices.”
Mr. MacLeod said that rules now require that any individual who brings in more than $10,000 to a casino through multiple visits in a 24-hour period has to report the source of the money, even if each visit brings in less than $10,000.
But he acknowledged that there is still no co-ordination between different casinos in the province, so someone could go to Burnaby, Richmond and Vancouver in a single day and avoid the rule that requires a report on a cumulative total over $10,000.
The five largest casinos by dollar volume in the province are the Parq Casino in Vancouver, River Rock in Richmond, Grand Villa in Burnaby, and the casinos in New Westminster and Coquitlam.
Mr. MacLeod emphasized that the increase in the smaller amounts in no way matches the total drop in dollar value of cash brought to casinos as a result of the new rules, but it is something his branch staff are watching.
The interim CEO at B.C. Lottery Corp., former Port Coquitlam mayor Greg Moore, said there might need to be a response if the trend gets more obvious.
“We could look at reducing the $10,000 limit to a lower amount. But we are trying to understand what the consequences of that would be,” he said. Like Mr. MacLeod, he said that the upward tick in the below-$10,000 casino players still comes nowhere near the amounts that were washing through casinos before.
The peak period for cash flowing through casinos was in July, 2015, according to various ministry reports, when $20-million in cash flowed through B.C. casinos in that one month. By February, 2018, it was down to $200,000.
But both city officials at the workshop and provincial Attorney-General David Eby, who was on the panel, talked about concerns that illegal cash is flowing elsewhere now that the tap has largely been turned off at casinos.
Kelowna city manager Doug Gilchrist asked how much investigator time and scrutiny will be put into smaller cities, such as Kelowna and Prince George, to ensure that the underground money doesn’t flow to where criminals think it will be easier.
And Mr. Eby emphasized that there is likely still money going into any kind of asset that holds its value, such as luxury cars and real estate.
“If we’ve shut the door, where does it go? It does not mean that that cash has disappeared.”
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