Thank you.
Thank you to the committee for the invitation to appear here today.
The Canadian Gaming Association is a national trade industry association representing leading operators and suppliers in Canada's gaming industry. I had occasion to appear before the Senate's finance committee several years ago as part of their statutory review of the act, and I am grateful for today's opportunity.
To give you a snapshot of Canada's gaming industry, it directly employs more than 125,000 Canadians, contributing $6.5 billion in direct labour income. Our purchasing power equals more than $14.5 billion annually in goods and services, which generates over $8.5 billion annually for governments and charities in revenue.
Canada's gaming industry is one of the most highly regulated industries in the country, and virtually every facet of the gaming industry is subject to scrutiny. Regulations affect employees licensed to work in establishments, suppliers to the industry, gaming equipment, and rules of play. They also assist us in delivering on our requirements under the proceeds of crime and terrorist financing act. Regulatory oversight is built into the DNA of our industry. It's top of mind for every operator, every day.
The success of our business is built upon upholding the public trust by delivering fair games in safe and secure environments. We deliver on that trust through rigorous regulatory oversight, testing of gaming products, strong internal controls, and world-leading responsible gaming programs.
One measure of our regulatory oversight is through our industry's commitment to be a strong partner in Canada's anti-money laundering regime. We do this by collaborating with FINTRAC, provincial gaming regulators, and law enforcement, as we recognize that Canada's AML regime operates on the basis of three interdependent pillars: policy and coordination; prevention and detection; and disruption. In short, it's a partnership that is strongest when we work together.
As gaming operators, our role is prevention and detection, through identifying and reporting large and suspicious cash transactions and large cash disbursements made by casinos. We report that information not only to FINTRAC but also with gaming regulators and directly with law enforcement, as needed.
Our industry commitment is demonstrated through the deployment of a large number of dedicated and well-trained security, surveillance, and compliance professionals, and through the use of sophisticated tools such as state-of-the-art surveillance and information management systems to monitor and record activities. Our activities are regularly audited by provincial regulators, third-party firms, and FINTRAC itself.
The recently released Department of Finance memo identified the casino sector generally demonstrates high levels of compliance, and it should be noted that casino sector compliance levels were double those of chartered banks and money service businesses.
While casino reporting represents less than 2% of the reports received by FINTRAC in any given year, we value the relationship with the Department of Finance and FINTRAC, as they have been good partners to the gaming industry by working on refinements and improvements in the reporting relationship over the years.
Our industry participates in FINTRAC's industry advisory group, and on several occasions we have welcomed the participation of the Department of Finance and FINTRAC officials in our industry's annual conference, the Canadian Gaming Summit.
Recent media reports might leave one the impression that casinos are easy places to launder money. I want to make it clear—they aren't. It's virtually impossible to be anonymous in a casino. Surveillance begins in some instances as soon as you pull into the parking lot, and by the time you reach the front door, your image has been recorded. If you wish to buy chips with large amounts of cash, you'll be asked for ID, plus additional personal information, which we are required to collect by FINTRAC.
If you think you can play a couple of hands of blackjack and cash out with a cheque, you're wrong. Cheques are issued only for verified winnings, with your original buy-in returned in cash. You will receive only a cashback if there are no verified winnings.
Our industry works diligently to identify and mitigate risks, as in the case in British Columbia. It's been widely reported that the British Columbia Lottery Corporation and gaming operators in the province proactively responded to an increase in large cash transactions beginning in 2012. They did that by placing significant restrictions on the use of cash for certain players through increased interviews and scrutiny, increasing training and education for frontline staff, and encouraging—or mandating—customers to use cash alternatives such as player gaming fund accounts.
Thanks to these efforts, players were barred from B.C. casinos, including Paul Jin, who has been identified in media reports as a key suspect in B.C. money laundering efforts. Many of Mr. Jin's known associates were subsequently barred, and, as the media reported, details of their activities were shared directly by BCLC with the B.C. RCMP.
As a direct result of these proactive measures, we have seen a 60% decline in suspicious cash transaction reports since 2015. These types of transactions now represent less than 4% of the revenues of casinos, and they continue to decline with the recent efforts by the B.C. government.
Gaming operators are delivering on their pillar of Canada's AML regime—prevention and detection—but as others who have appeared before this committee have stated, there is a need for increased effort by law enforcement to disrupt the system. To my knowledge, despite information going back to 2012 collected by BCLC and B.C. gaming operators, which was shared with law enforcement, on the illicit attempts by Mr. Jin and his associates to launder money in B.C. casinos, he is still operating in the Vancouver housing market.
The assistant commissioner of federal policing criminal operations with the RCMP commented to this committee that “due to time constraints, resource limitations, and the efficacy of prosecuting certain charges over others in these dynamic and complex cases, following through on proceeds of crime or money laundering charges is often not tenable.”
Across Canada, the gaming industry has strong and productive working relationships with law enforcement, but we need to know that our reporting efforts are being acted on. Awareness of police investigations and of the ensuing arrests are visible outcomes and are deterrents as well as proof that the system works.
Thank you very much for your time. I will happily take any questions.