Casino Operator at Epicenter of B.C.'s "Vancouver Model" Scandal Fined by Ontario Regulator for Money Laundering Failures
TORONTO – Great Canadian Entertainment, the casino operator whose Richmond, British Columbia flagship sat at the epicenter of the “Vancouver Model” Chinese transnational money laundering scandal, has been ordered to pay $170,000 in monetary penalties by Ontario’s gaming regulator for failing to adequately identify, assess and monitor high-risk patrons and report suspicious activity — including potential money laundering indicators — at its Pickering Casino Resort east of Toronto.
The penalties strike at a company whose ownership and geographic footprint have shifted dramatically since the British Columbia scandal. In November 2020 — less than a year after this reporter documented a pattern of suspect cash transactions migrating from British Columbia into Ontario casinos — Great Canadian Gaming Corporation entered an agreement to be acquired by funds managed by affiliates of New York private equity giant Apollo Global Management. The roughly $3.3 billion transaction closed in September 2021, taking the company private and rebranding the operator of Richmond’s River Rock Casino Resort as Great Canadian Entertainment, headquartered in Toronto.
It is that post-acquisition entity that Ontario’s regulator has now cited for anti-money-laundering failures in the Greater Toronto Area.
TORONTO – Great Canadian Entertainment, the casino operator whose Richmond, British Columbia flagship sat at the epicenter of the “Vancouver Model” Chinese transnational money laundering scandal, has been ordered to pay $170,000 in monetary penalties by Ontario’s gaming regulator for failing to adequately identify, assess and monitor high-risk patrons and report suspicious activity — including potential money laundering indicators — at its Pickering Casino Resort east of Toronto.
The penalties strike at a company whose ownership and geographic footprint have shifted dramatically since the British Columbia scandal. In November 2020 — less than a year after this reporter documented a pattern of suspect cash transactions migrating from British Columbia into Ontario casinos — Great Canadian Gaming Corporation entered an agreement to be acquired by funds managed by affiliates of New York private equity giant Apollo Global Management. The roughly $3.3 billion transaction closed in September 2021, taking the company private and rebranding the operator of Richmond’s River Rock Casino Resort as Great Canadian Entertainment, headquartered in Toronto.
It is that post-acquisition entity that Ontario’s regulator has now cited for anti-money-laundering failures in the Greater Toronto Area.
The Alcohol and Gaming Commission of Ontario announced the penalties Tuesday, saying a compliance audit of Pickering Casino Resort identified several failures by the company to properly assess and track high-risk patrons who were not subject to required enhanced scrutiny. The review also found that required Suspicious Transaction Reports were not filed in a number of cases where patrons showed potential money laundering indicators.
“The AGCO requires casino operators to take a proactive approach to identifying and reporting suspicious activity,” Dr. Karin Schnarr, the regulator’s chief executive officer and registrar, said in a statement. “When high-risk behaviour is not properly monitored or reported, it weakens important safeguards that protect the integrity of Ontario’s gaming sector.”
According to the regulator, Great Canadian Entertainment breached section 6.1 of Ontario’s gaming standards by failing to have mechanisms in place to reasonably identify and prevent unlawful activities at the Pickering resort, including by failing to conduct adequate risk assessments and appropriately monitor and analyze player transactions for possible unlawful activity. The company also breached section 6.3 by failing to have reasonable measures in place to identify and prevent suspected money laundering, including by failing to implement risk-based policies and procedures providing escalating measures for patrons who engage in behavior consistent with money laundering indicators.
The company has the right to appeal the Registrar’s order within 15 days to the Licence Appeal Tribunal, an adjudicative body independent of the AGCO.
Great Canadian operates River Rock Casino Resort in Richmond, the venue at the center of British Columbia’s money laundering crisis, in which networks connected to Chinese transnational organized crime moved suitcases and hockey bags of drug cash through B.C. Lottery Corporation casinos. The scandal, documented in this reporter’s investigations and the Cullen Commission public inquiry, gave rise to the term “Vancouver Model” among international financial crime experts, describing the fusion of underground banking, casino chip purchases and Vancouver real estate used to launder proceeds from transnational drug trafficking.
As The Bureau reported in early 2024, Fintrac, Canada’s anti-money laundering watchdog, documented a tectonic shift in Chinese diaspora money laundering networks during the Covid-19 pandemic, wherein third-party professional money washers responded to British Columbia casino shutdowns by evolving drug money flows through big Canadian banks, law offices, real estate developers and other businesses using “money mule” bank accounts fronted by Chinese students to receive wire transfers from China and Hong Kong.
These transactions clandestinely leverage capital fleeing from China into real estate and other investments in North America, in exchange for pools of drug trafficking proceeds collected in North American cities by underground banking brokers tied to Chinese transnational crime and manufacturing and trading entities in China, as well as Latin American cartels and other global crime groups.
The eastward migration of suspicious casino cash was predicted — and measured — years before Tuesday’s penalties. That January 2020 Global News investigation found that as British Columbia tightened restrictions on cash flowing into its casinos in January 2018, suspicious transaction investigations logged by the Ontario Provincial Police at Ontario casinos more than doubled, from 945 in 2017 to 2,266 in 2018 — a roughly 140 percent increase — and continued trending higher in 2019.
That investigation found the sharpest increases included Great Canadian’s expanded Woodbine casino in Toronto, where OPP suspicious transaction investigations rose from eight in 2017 to 58 in 2018, and 76 in just the first seven months of 2019, after the facility added table games.
British Columbia’s then-attorney general David Eby told a House of Commons committee in 2018 that the value of suspicious transactions in B.C. casinos had plummeted from a high of $20 million a month in July 2015 to just $200,000 a month in February 2018. “We have reduced it by a factor of 100,” Eby said. “I believe that money has moved elsewhere.”
Experts warned at the time that the criminal networks behind the cash had simply been displaced, not dismantled. “Money laundering is like a product of their crime, just like dead kids and corrupt politicians. So that dirty money will find the cracks and flow to more vulnerable systems in Canada,” said Calvin Chrustie, a former senior RCMP officer who targeted transnational organized crime groups in Vancouver and internationally. “The criminal networks involved haven’t been touched, and they are still selling their drugs and making their money.”
Garry Clement, former director of the RCMP proceeds of crime unit, said: “Criminals go to the lane of least resistance.”