Council members from the city of Delta, a small city that sits just outside Vancouver and, oddly enough, has no casinos, are reviewing an idea that just might help the troubled area solve its recent high-profile problems with fraud, organized crime, and money laundering. Casinos and local governments in British Columbia have been looking for a way to recover and restore faith after an independent report commissioned by the government last June revealed that the area had become a hub money laundering thanks to underground banks with links to illegal drugs and terrorism. This model could potentially be repeated in Canadian online casinos.
The Emergence Of The Vancouver Model
These underground banks would allow criminals to deposit their illicit funds and then receive payments with “clean” money back into Chinese bank accounts.
The circular cash-cleaning process more or less worked by giving dirty money to high-rolling Chinese gamblers who would then take advantage of the overly lax anti-money-laundering procedures that existed in a number of BC casinos. These gamblers could then deposit the money through the less-than-reputable banks and settle their debt with their benefactors upon return to China.
The scam worked so well that when it was discovered by international authorities trying to track the money it became known as “The Vancouver Model”, serving as a reference pattern to apply to other cases where similar activity was suspected.
Cashless Casinos Could Combat The Problem
Although the city of Delta doesn’t yet have any casinos within its borders, it has approved one. Not wanting to fall prey to the same problems that have stricken other BC casinos, the city has proposed the idea of a cashless casino in an attempt to mitigate many of the risks that a new casino could bring.
The local government in Delta has every reason to be proactive. The River Rock Casino in nearby Richmond is only about 10 miles away. The River Rock was singled out as the apparent hub for the massive money laundering operation. The entire thing was very local news for the residents of Delta.
On November 13, 2018, the BC Lottery Corporation announced the approval of a new gambling and entertainment facility in Delta, to be called the Cascades Casino, which will be owned and operated by Gateway Casinos.
Transparency Is The Key
George Harvie, the new mayor of Delta, made the idea of a cashless casino a major point during his election campaign. He singled out New Zealand casinos as a prime example of a place where a card-based payment and identification system has worked well.
A staff report from Delta briefly explains how the system would work. “Cashless systems require an account that is linked to the individual player whose identity has been verified. This means that gambling data can be tracked and money transactions are transparent, thereby limiting opportunities for crime such as money laundering.”
In reality, setting up such a system in land-based casinos would more or less provide the same security and identification procedures already in place at the vast majority of online casinos.
This would add to the recently enacted regulations which now require that all BC casinos report the source of any buy-ins that exceed C$10,000 (US$7,500) and that all players making such a buy-in must provide a receipt from their bank as proof of the source of the funds.