Vancouver’s Gambling Dens Hit by Anti-Money Laundering Crackdown?

  • By: mvadmin
  • Date: October 22, 2019
  • Time to read: 3 min.

Casinos in Vancouver are facing the brunt of the dirty money crackdown regulations, according to experts.

Vancouver-area casinos for years had been accepting millions of dollars in questionable cash from gamblers showing up with suitcases and hockey bags bulging with bills, according to British Columbia Attorney General David Eby. But new rules implemented last year to more tightly identify sources of funds have put a damper on that rollicking trade, a report by Bloomberg said.

“The anti-money laundering regulations in British Columbia have been a problem as the regulations were supposed to cut down on illicit gambling but hurt volumes across casinos.” ,” Andrew Hood, a Toronto-based equity analyst said.

Parq Vancouver, a glimmering waterfront casino, too saw its business being hit after the crackdown on money laundering.  The company now has issues with loan repayment and was downgraded by analysts.

“Parq Holdings LP has a $150 million second-lien term-loan that was arranged by a syndicate of financial institutions led by Credit Suisse Securities in 2014, according to data compiled by Bloomberg. The amount of interest isn’t disclosed, but Parq had deferred an interest payment by one month to April 30 and its ability to pay hinges on the company refinancing its debt, S&P said earlier this month when it downgraded Parq Holdings LP to CCC, eight notches below investment grade, from B minus“, according to the Bloomberg article.

Parq’s shimmery copper-hued casino-cum-hotel complex finally offered an upscale option in downtown Vancouver with a second-floor entrance leading directly into the neighbouring BC Place stadium.

The two-floor casino at Parq Vancouver has 600 slot machines and 75 gaming tables. It was a place where high-flying Asians went to get their gambling fix.

“Misguided investigation”

Some Asian media houses have even called the dirty money crackdown a misguided investigation into local and foreign money laundering.

“The British Columbia government has embarked on a misguided investigation into local and foreign money laundering and their effects on the local economy, particularly in casinos and real estate. It is actually racist speak for: let us find a way to blame Chinese money for the greater Vancouver area’s chronically unaffordable housing,” the South China Morning Post said.

The investigation fails to grasp a basic understanding of global capital flow, financial regulations, current practices of “know your client”, and anti-money-laundering policies. Most of all, the province has little jurisdiction over what are federal issues. It is mainly a public-relations exercise chasing the ghost of the Chinese money launderer, the article added.

Money laundering at a casino is easy to understand. Drug dealers show up at a casino with suitcases full of cash and deposit it with the casino. They proceed to lose the required amount by gambling.

Then they ask the casino for a cheque for the balance. It can be easy to prevent this type of dirty cash transactions if casinos have stronger measures to know their gamblers and implement better ID checks.

Last year, the government-owned British Columbia Lottery Corp., responsible for managing casinos in the province, hastily implemented new measures requiring gamblers to provide a bank receipt on the source of funds for any buy-ins amounting to C$10,000 or more within 24 hours. It also hired Ernst & Young to audit three years of transactions at casinos which were reportedly suspicious but concluded in February that “there was no systemic pattern of money-laundering activity.”