Report: Vancouver Casino "Epicenter" Of Hot MoneyRegulations Implemented That Force Gamblers To Provide Receipts On Buy-Ins of C$10,000 Or More |
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Vancouver-area casinos are experiencing a massive drop in revenue from new anti-money laundering regulations instituted in January 2018.
According to Bloomberg, British Columbia Attorney General David Eby said that the Vancouver-area casinos were a huge source for laundering cash. Before the regulations, the casinos in British Columbia were accepting millions of dollars in cash from “questionable sources" said Eby.
In 2017, after reports of money laundering had gone more mainstream, British Columbia Premier John Horgan hired an independent investigator to look into the gambling industry. The investigator found that extreme amounts of small bills were being converted into chips and back into large bills in the casinos in the area.
River Rock Casino, a casino that used to hold a World Series of Poker Circuit stop, was called the “epicenter” of hot money by the investigator. At river rock, C$13.5 million in 20-dollar bills were accepted in a single month. At Starlight Casino, a gambler was allowed to exchange C$3.1 million, almost exclusively in twenties, into chips.
Eby claimed that some of these cash transactions involved gamblers showing up with cash in suitcases or a hockey bag.
In January 2018, the British Columbia Lottery, which acts as the regulatory body for the casino industry, instituted new measures for casinos to abide by. Now, gamblers are required to provide a bank receipt on the source of funds for any buy-ins that amount to C$10,000 or more within a 24-hour period. They also hired Ernst & Young to audit three years of transactions at River Rock.
The Ernst & Young study found no pattern of money laundering, but the new regulations are hurting the casino’s bottom line.
Great Canadian Gaming, a company that owns and operates River Rock and nine other casinos in Canada, reported that their total drop had decreased 16 percent in 2018. Its CEO noted that gamblers aren’t used to these new rules and many of the high rollers aren’t coming to the casinos with the necessary documents to gamble more than $10,000.
Parq Vancouver, one of the city’s newest casinos that opened in September 2017, is having trouble staying afloat after taking on substantial debt to open its doors and their revenues falling well below expectations.
“The anti-money laundering regulations in British Columbia have been a problem,” Andrew Hood, an equity analyst at M Capital Partners Inc. “The regulations were supposed to cut down on illicit gambling, but of course, that hurt volumes across casinos.”
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