Ontario’s Casinos Need to Strengthen Efforts to Curb Money Laundering

According to Auditor General Bonnie Lysyk, Ontario’s casinos need to strengthen efforts in order to mitigate the risk of money laundering and other illegal activities across all lines of business.

Casinos managed by the Ontario Lottery and Gaming Corporation record fewer suspicious transactions than other gaming firms, according to Auditor General Bonnie Lysyk (OLG).

Lysyk employed “mystery shoppers” for a sting process at four Ontario casinos in Niagara Falls, the Greater Toronto Area, and Windsor in order to evaluate the effectiveness of anti-money laundering protocols.

“As part of the audit, mystery shoppers tested how easy it was to launder money, and they were able to obtain casino cheques with large amounts of cash without anyone confirming where the money came from,” Lysyk said.

The independent watchdog acknowledged that the covert operation had middling success because several of her agents had been nabbed by security.

“The mystery shoppers were not successful at the other two casino sites visited,” her report said. “The purpose of the mystery shopper assignment was to test whether the casinos verified the mystery shoppers’ play and casino wins before issuing cheques of $3,000 or more.” 

In two different transactions at the same casino, her agents were successful in collecting two casino cheques totaling $4,900 after depositing $5,000 and $10,600 after depositing $11,000 in cash.

“The mystery shoppers entered with amounts ranging from $5,000 to $11,000 in cash at the two casinos, played at table games and slots for a short while (usually 10 to 15 minutes per table or slot machine), and then proceeded to be cashed out with cheques,” the report said.

Overall, Lysyk’s agents were able to depart these casinos with nearly 98% of the money they had first brought in as cash – now the funds would be considered ‘laundered’ as the cheque could be described as casino winnings.

No charges were filed against her team despite the OPP’s investigation.

Gaming industry professionals were incensed by the hoax and decried what they called its “unethical behavior.”

According to the Auditor, OLG and the Alcohol and Gaming Commission of Ontario should “implement for all casino operators the requirements to obtain proof of source of funds at buy-in for cash and cash-equivalent transactions for amounts of $10,000 or more” to address potential money laundering in the statewide casinos. She recommends they “issue casino cheques only when the funds are verified as a casino win.”

OLG said that “to combat the risk of illegal activity across all lines of business, we will expand our efforts to ensure compliance with our anti-money laundering framework.”

Suggested Read: Macau to Introduce Digital Currency to Combat AML Threats in Casinos