Wednesday, March 02, 2011

Reporter: Julian Sher The B.C. Lottery Corporation is pressing for changes to provincial legislation that currently bars direct money-wire transfers from overseas into casinos. That will help Paragon Gaming reach its target of $100-million a year from international gamblers at an expanded Vancouver casino, said corporation president Michael Graydon. But Mr. Graydon insisted that the change won’t increase the possibility of money laundering at casinos. He said the new system would actually reduce it, since casinos would be dealing with less cash than otherwise and police would have a clear electronic trail of where money is coming from. Mr. Graydon and casino owners say that this kind of wire transfer is available in many other casinos around the world that attract international visitors. Currently, gamblers from outside Canada have two options if they want to bring in money to use in casinos. They can bring in cash, as long as it’s less than $10,000. If they want to play with more than that, they have to set up a Canadian bank account and wire the money there. The casino will then set up an electronic account that withdraws and deposits money to that Canadian bank, a pilot project that was only instituted a little more than a year ago. “What we’d like is the ability to wire the money in from an accredited, registered, recognized banking institution in those markets [that gamblers are coming from] directly to the casinos,” said Mr. Graydon. “We are in discussions now [with the province’s gaming policy and enforcement branch] on how to enhance the electronic transfer of funds and reduce the reliance on cash.” The province’s gaming branch said it “is currently reviewing” BCLC’s suggestion for change. Mr. Graydon said the ability to transfer money directly from overseas to a casino won’t affect the majority of international visitors. But it will be an enticement to a small but affluent group. “We have some high-end players that do buy-ins of half a million dollars in a morning. They’ll play for $45,000 a hand and sit for three of four hours.” The corporation recorded 18,000 transactions at B.C. casinos last year of over $10,000. About 13 per cent of those were over $25,000. Many countries have stepped up their vigilance around money laundering in the past decade in an effort to fight terrorism and curb the circulation of illegal drug profits. Money-wire transfers frequently show up as one of the ways that illegal money is moved around. As a 2006 U.S. Financial Action Task Force report on money laundering noted, “Historically, the most prevalent method of money laundering reported in suspicious activity reports is structured cash deposits followed by immediate and regular international wire transfers that are conducted through correspondent accounts either by individuals or businesses.” A Canadian money-laundering expert also said he had concerns about the kind of change that B.C. is now considering. “It raises huge concerns,” said Chris Mathers, a former RCMP expert on the proceeds of crime who is now a Toronto-based consultant. “It’s a really bad idea.” “You need to know the source of the funds, but here a wire transfer just shows up,” he said. “Who is this guy? What is the source of his money? Have you done a background check on him?” But Mr. Graydon said that only select overseas banks will be permitted to do wire transfers to casinos for their customers. Paragon Gaming president Scott Menke said the change in regulations would definitely encourage more international gamblers to make Vancouver a destination. Singapore, which allows that kind of transfer, has shown enormous increases in its gambling revenue. Howard Blank, the president of the local company Great Canadian Gaming, said his company is in favour of the change as long as FINTRAC, Canada’s monitoring agency for money laundering, supports it. “We don’t want Harry’s Night and Day bank in wherever to be able to do this.” Mr. Blank said it would be helpful for patrons, since they wouldn’t need to carry around large amounts of cash or set up a Canadian bank account just in order to gamble. “All we’re doing is taking one step away.” Like Mr. Graydon, he said the change would help police track any possible money laundering. “The nice thing about wire transfers, there’s a total chain in the trail. I would rather have something transferred in than get a bag with $100,000.”