Money laundering still a 'major risk' at Ontario casinos, auditor general report finds

Ontario's auditor general releases report Ontario's auditor general details how funeral homes and casinos operate in the province in new report.

TORONTO — Money laundering continues to be a "major risk" at Ontario casinos, according to the province's Auditor General, as a result of poor enforcement by the provincial regulator and the Ontario Provincial Police.

Bonnie Lysyk's annual report found that between 2017 to 2019 casinos alerted the Alcohol and Gaming Commission about nearly 10,000 suspicious transactions -- with possible ties to money laundering or terrorist financing -- with a value of over $340 million.

Despite having 67 OPP officers operating in casinos to oversee gaming integrity, the auditor found "few charges were laid, low amounts of cash were seized, and few people were barred from casinos."

"Between 2017 and 2019, the OPP laid 23 charges, of which three related to money laundering, and seized cash on four occasions," the report states.

The most serious cases of suspected money laundering took place at the Niagara Fallsview Casino Resort where 862 dubious transactions took place totaling $136 million in 2019.

While the OPP has the power to obtain witness statements, perform credit checks and request information from the Canada Revenue Agency, the auditor found provincial police mainly relied on criminal background checks and "rarely performed any additional checks or interviews" with those accused of suspicious activity.

In one instance, a gambler spent $1.3 million over three years in Ontario casinos and when investigated told provincial police he worked as a restaurant cook and borrowed the funds from family.

"The OPP did not gather additional evidence to assess the source of the funds wagered or otherwise transacted, and these individuals were allowed to continue gambling," the report states.

The auditor's investigation also found just two per cent, 33 of the 1,698 people accused for suspicious transactions, were barred from re-entering an Ontario casino.

The OPP expressed difficulty in laying money-laundering charges because officers need sufficient evidence that the money being used is illicit -- which would require gathering evidence outside the casino floor, the auditor noted.

Lysyk's report recommends excluding gamblers from entering casinos with large amounts of cash with no proof of funds, using all available investigative tools to root out money laundering, and enhanced verification systems to determine source of funds.

The AGCO agreed to implement the recommendations while working with the provincial government to "review the effectiveness" of the measures currently in place and to create an action plan to reduce the risk of money laundering.