Obtained by @BobMackin @theBreakerNews under Freedom of Information

BCLC/BCGIA AML Communications

Purpose: To communicate the BC gambling industrys commitment and actions to deter money
laundering

Situation analysis:

BCLC and gambling service providers are united in their goal of keeping casinos safe and complying with
anti-money laundering requirements. However, for many years there have been challenges
communicating these efforts. The topic of money laundering and AML roles and responsibilities is a
challenging to communicate and complicated to understand. Further, there seems to be a lack of
acceptance and trust from the public and media that the industry is committed to playing its role in AML.

A recent announcement by JIGIT outlining that millions of dollars had been laundered through casinos
has created further challenges. The pubic communication did not include the fact that in many instances
the money laundering described occurred in the financial services sector. Where money laundering has
been initiated in the financial sector, BCLCs ability to detect those money laundering circumstances is
extremely limited.

A further challenge is that authorities conflate money laundering with spending laundered funds. BCLC
has a comprehensive anti-money laundering program in place to detect and deter both however, money
laundering is much easier for a business to watch for, detect and report than the spending of proceeds
that have been already been laundered through the financial sector.

For example, if a customer comes in with a bank draft from a major Canadian bank, if they have
laundered money at the bank to get that draft, BCLC would fulfill its role to scrutinize the circumstances
around the transaction known to it and report any suspicious circumstances surrounding the transaction.
However, BCLC is not required to report large buy-ins with bank instruments and has been instructed by
FinTRAC to not report these transactions as Large Cash Transactions. BCLC has no way to detect
money laundering that is occurring in the financial sector. It is for this reason that BCLC reports
suspicious circumstances involving bank instruments to the police and GPEB as those agencies have the
authorities needed to investigate the full nature of those transactions. The police and GPEB have tended
to equate the use of a bank instrument at a casino to money laundering when it is actually spending of
funds that have been laundered elsewhere.

There are a number of common misperceptions about cash-based play at casinos including: players who
play with large amounts of cash could only be playing with the proceeds of crime; players who play with
large amounts of cash are problem gamblers; and suspicious transactions are criminal acts and definitive
confirmation that criminal activity/money laundering is taking place in casinos. Media coverage often
includes quotes/clips from self-described experts or former law enforcement who portray casinos as key
targets for money launderers and suggest casinos should not be accepting large amounts of cash or that
individuals should be identified and vetted prior to entry. In addition, since the case of FINTRAC
administrative monetary penalties against BCLC has not been resolved, media often point to these
penalties as evidence BCLC is not doing its job to deter money laundering.

The industrys role

Businesses that are reporting entities have responded to money laundering concerns by implementing
comprehensive anti-money laundering compliance programs. BCLCs compliance programs enable
BCLC to identify the risks of proceeds of crime being laundered through financial transactions at their
businesses and to mitigate those risks (Duhaime).
BCLC is responsible for providing FinTRAC with certain transaction reports, for implementing a
compliance program and for keeping records that may be required for law enforcement investigations.
BCLC is required to submit to FinTRAC: Large Cash Transaction Reports (money received from
customers), Large Casino Disbursement Reports (payments to customers) involving amounts of $10,000
or more, and Suspicious Transaction Reports (STR) for transactions or attempted transactions of any
dollar amount and in any form that are suspicious. BCLC provides copies of all STRs filed with FinTRAC
directly to the RCMP and JIGIT; GPEB receives unusual financial transaction alerts directly from casino
service providers. All BCLC and all casino workers receive formal training on how to recognize the indicia
of suspicious transactions at casinos.
Under the federal Proceeds of Crime Money (Money Laundering) and Terrorist Financing Act (PCMLTFA)
the threshold for suspicion is met where there are reasonable grounds to suspect that [a] transaction is
related to the commission or attempted commission of a money laundering or terrorist financing
offence. FinTRAC receives and analyzes transaction reports from BCLC as well as all other reporting
entities across Canada (casinos, banks, credit unions, realtors and so on). Where FinTRAC sees
indicators of money laundering or terrorist financing it will make a disclosure to police. Due to legislated
restrictions that allow FinTRAC to share information only with prescribed enforcement agencies, it does
not share disclosures made to police or otherwise notify BCLC of the results of its analysis.
The investigation of money laundering and terrorist financing offences and determining where charges
should be laid is the responsibility of police.

BCLC Oversight and Actions

B.C. casinos feature surveillance cameras that cover all publicly accessible areas and 24-hour
surveillance staff who operate under comprehensive standards set out by BCLC and employ over 100
security staff with up to 30 staff working around the province at any given time. In addition to extensive
on-site security staff, BCLC has 17 investigators and 13 compliance officers dedicated to the oversight of
the security and integrity of all gaming facilities across the province, as well as for lottery and internet
gaming. BCLC also has a dedicated Anti-Money Laundering (AML) Unit consisting of nine members who
specialize in AML Investigations, Programs and Intelligence. The AML Unit works with police and
regulatory agencies, and shares information regarding individuals it believes may be engaged in criminal
activity as it pertains to suspected terrorist activity, money laundering and proceeds of crime related
offences. Up until recently, casinos in BC have historically only accepted cash and still do not offer credit.
BCLC has put comprehensive procedures and training in place to enable service providers to fulfill
FinTRAC reporting requirements when transactions involve cash and developed more cashless options
for customers to buy-in for greater security and convenience. Specific and recent actions taken include:

Following a 2010 review of AML measures at gaming facilities, the Province launched an Anti-
Money Laundering Strategy focused on reducing the reliance on cash, aimed at minimizing the
opportunity for money laundering to take place.
In 2014, BCLC signed an information-sharing agreement with the RCMP to proactively ban those
who have organized crime/gang links, those identified as a threat to public safety, or those who
are involved in criminal conduct likely to generate proceeds of crime. The agreement has had a
positive impact, with BCLC banning over 260 people to date.
BCLC implemented a number of traceable cash alternatives for gaming facilities in B.C. Over the
past three fiscal years (2014/15 - 2016/17), traceable cash alternatives such as the Patron
Gaming Fund account, debit transactions, and other non-cash instruments made up one quarter
of play in B.C. gaming facilities. The use of these alternative options continues to grow as BCLC
works to change consumer behaviour.
BCLC has also reorganized its Corporate Security and Compliance division in order to develop an
anti-money laundering unit consisting of staff who are required to hold Certified Anti-Money
Laundering Specialist (CAMS) designations.
BCLC has purchased business intelligence software from a leading provider to financial
institutions, including three of Canadas five big banks. BCLC is the first gambling jurisdiction in
North America to adopt this technology and, as such, extensive work has been required to
customize this software to the gambling environment. The software, and related training, will
 strengthen BCLCs capacity to monitor and analyze customer transactions for indicators of money
laundering and other offences.
In 2016, BCLC started funding of $3M per year to a dedicated illegal gambling and anti-money
laundering police unit run by the RCMP. The 2014 information-sharing agreement with the RCMP
was amended so specific AML related intelligence could be proactively shared with JIGIT
Investments in research and insights to develop a new Player Health and responsible gambling
strategy, focused on better understanding at-risk player segments and reducing the potential
harm gambling can cause these players through education and support.

In addition, a number of third party audits have occurred that have validated the effectiveness of BCLCs
AML program:

Fintrac audits BCLCs program every two years. No deficiencies were found in AML procedures
or reporting in FinTRACs most recent audit completed in July 2016. One deficiency was found in
relation to training, which has been subsequently addressed. During the audit exit interview,
FinTRAC advised that BCLCs Compliance Program was a leader in the sector.
BCLC contracts for an independent audit every two years. The next independent audit will
commence in July-August 2017 and will be conducted by Ernst and Young.

Opportunity/Goal
1. Align the industry/BCLC in educating the public, media and players about its role in the
prevention of money laundering;
2. Increase public awareness and understanding of BCLCs AML program, its role, the industrys
role and the role of the police related to money laundering offences.
3. Align the industry with JIGITs efforts to investigate potential money laundering.
4. Enable the industry/BCLC to be proactive and transparent about tis effort.
5. Enable the industry/BCLC to respond publicly to criticisms related to AML

Communications Objectives:
Demonstrate understanding and commitment from the industry and their employees of their role in
AML.
Build understanding of and confidence in, the industry/BCLC as committed to and employing AML
best practices and doing our part to enable police to combat organized crime;
Create a unified voice on this topic in the industry.

Audience/Stakeholders
Service providers/BCGIA
GPEB
JIGIT
Media
BCLC staff
Service provider staff
Players
Public

Communications tactics

1. Media relations
Develop common messaging so that the industry is using the same messaging to speak to AML
matters
Coordinate a media tour/security walk-through at a casino (BCLC/BCGIA/Service Providers)
give a reporter $10,000 in cash and show them what happens when they buy in, the questions
asked, forms completed
 Walk reporter through various scenarios such as attempting to cash out after limited play and
requesting a cheque
Develop a composite of a player who plays with a large amount of cash (based on BCLCs data
base) in order to dispel the myths around the use of cash and high dollar value buy-ins
Develop an op ed from the BCGIA that is vetted by service providers and can be easily
customized for quick use in the event an issue arises
Media training for Peter Goudron on this topic so that he can be engaged to speak on behalf of
the organization on this topic, using the unified messaging. Leverage the industrys unhampered
ability to speak.

2. Third-party validation
Work with JIGIT and BCLC on signage in casinos indicating that police will investigate suspicious
transactions. Place signage in highly visible locations in all casinos and CGCs to raise awareness
of AML and the measures in place to deter money laundering attempts
Host a joint-news conference with JIGIT, BCGIA, BCLC to unveil the signs and use this as an
opportunity to reiterate the roles and responsibilities.

3. Service provider employee engagement

Develop an internal marketing campaign that reminds and re-engages service providers and their
staff on their role in preventing money laundering and preventing facilities from being targeted
Work with BCLC to create collateral materials for players/Encore members that positions AML
efforts as being in place to help protect law-abiding citizens and businesses from being targeted