Ontarian Casinos Fail to Follow AML Practices – Auditor Reports Meta Description: Poor verification practices reported by Ontario’s Auditor General as sources of funds go unchecked, with minimal reporting of suspicious transactions According to the Office of the Auditor General of Ontario, anti-money laundering regulatory practices are still poorly enforced in Ontarian Casinos. As provincial regulators fail to verify funds from patrons using large amounts of cash, money-laundering activities risk going undetected, with such activities impacting different areas within the industry. This was one of the many findings that were released in the Office’s 2022 Annual Report on organisations in Ontario, including the Ontario Lottery and Gaming Corporation (OLG).
Join our WhatsApp groupSubscribe to our Daily Roundup Email
Source of Funds and Winnings Go Unchecked
As of May 2021, land-based casinos were obliged to check the source of funds for all players making single transactions of CA$100,000 (£60,747/€70,677). Evidence that such checks actually took place was not necessary. The OLG’s anti-money laundering policies further specify that winnings are to be verified prior to issuing any cheque worth more than CA$3,000. However, during its audit, the Office found that no anti-money laundering checks were actually in place, because it was allowed to obtain cheques after very little play and no casino winnings.
Ontario’s Reporting of Suspicious Transactions Unrealistically Low
Reported suspicious transactions amounted to less than 1%, which is rather unrealistic given that this value covered transactions in 19 of the 27 casinos operating in the province. Further worrying data was revealed by the auditor’s investigation, as only 2% of those accused for suspicious transactions were actually barred from re-entering an Ontarian casino, translating to 33 of the 1,698 people.
Responsible Gaming Tools Barely Utilised
The use of tools such as loss limits has fallen by 22% from June 2017 to June 2022. From 33% of active players using these tools 5 years ago, they are currently being used by just 11% of players. Further concerning information mentioned in the report is that those who had self-excluded from OLG’s website could still access private operator sites regulated by iGaming Ontario, after the province opened its online gambling market earlier this year.
The Spillover Effect of such Regulatory Breaches
This lack of proper regulatory enforcement is a breach of anti-money laundering regulations, with such infringement inevitably impacting other branches tied to the gambling sector, directly or indirectly. Senior Writer at www.NoDeposit365.ca, Charles Ingel had quite a few choice words: ‘The thing is, what many operators tend to forget is, trying to find loopholes or shortcuts in an airtight regulatory framework more often than not backfires. And it doesn’t only affect the casino itself, the repercussions are also felt by affiliates like us. Unfortunately, no matter how we try to do things ‘by the book’, our reputation is also dependent on the brands we work with. And, if said brands are tarred with breaching AML regulations, it has a ripple effect on us.’
The Way Forward
The report’s final recommendations were to: exclude gamblers from entering casinos with large amounts of cash and no proof of funds; make use of available investigative tools to identify money laundering; have enhanced verification systems in place to determine the source of funds. Ontario’s regulator, the Alcohol and Gaming Commission of Ontario has taken these recommendations on board and is working on creating an action plan to reduce the risk of money laundering. In fact, it has already ordered all operators within the province to prohibit bets on the Ultimate Fighting Championships with immediate effect. In the meantime, AGCO has committed to working hand in hand with the provincial government to assess the effectiveness of the measures that are currently in place.