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Casinos compliant despite fear of losing VIP gamblers, says lawyer

Despite security report, VIPs at River Rock Casino and Resort were not treated differently, says Great Canadian Gaming Corporation counsel
The Commission of Inquiry into Money Laundering in B.C. heard cross-examination of BCLC investigator Daryl Tottenham, right, by Great Canadian Gaming Corporation lawyer Mark Skwarok, left, in front of Commissioner Austin Cullen, top.

Great Canadian Gaming Corporation (GCGC) did not put profit before people, the company’s lawyer Mark Skwarok asserted at the Commission of Inquiry into Money Laundering in B.C. online Tuesday.

Case in point, said Skwarok, is when casino staff reported an apparent sexual assault of a colleague by a VIP gambler to authorities. Skwarok suggested it stands to reason if the casino was so concerned about upsetting a high roller in fear of losing his table play, it would not have reported how he groped a female employee.

“So, would you say this is an example of putting compliance ahead of revenue?” Skwarok asked B.C. Lottery Corporation investigator Daryl Tottenham, who had previously stated how service providers, such as GCGC, were concerned about revenue loss from the sanctioning of VIP players.

Skwarok’s assertion contradicts an April 30, 2018, report by Paladin Security on how VIP players at Richmond’s River Rock Casino and Resort received preferential treatment, and, according to staff, the company failed to report numerous incidents. This included one unreported sexual assault that Paladin determined to be “founded.”

Nevertheless, Skwarok pressed on with his cross-examination of Tottenham.

Skwarok also noted that the Richmond casino upgraded its camera systems to “above and beyond” the standards set by BCLC.

As well, Skwarok said there were times casino staff expressed concerns about a lack of police presence to deal with suspected loan sharks.

Preceding Skwarok’s cross-examination, Tottenham told Commissioner Austin Cullen how gaming service providers, such as GCGC, worried about sanctions against VIP players impacting their bottom line.

Tottenham had testified last week that BCLC was responsive to the service provider's concerns about losing revenue, and this constrained the actions that investigators were permitted to take, such as being instructed in 2012 by BCLC executive Terry Towns to not interview VIPs.

Skwarok suggested to Tottenham that this did not prevent BCLC investigators from obtaining information about a possibly suspicious patron via casino staff, who presumably would make a VIP more comfortable in a line of questioning.

Tottenham’s testimony also prompted questions from Chantelle Rajotte, counsel for the Gaming Policy and Enforcement Branch (GPEB).

Rajotte focused her questions on the notion BCLC may have also considered revenue over enforcement of suspicious activity, as has been suggested by whistleblowers. BCLC is the Crown agency that licenses gaming venues, promotes gambling and disperses net revenue to the provincial government. GPEB regulates gaming sites, not unlike the Nevada Gaming Commission.

Rajotte noted a September 2015 email from Tottenham’s supervisor Ross Alderson noting their then-boss Robert Kroeker, BCLC vice-president of security and compliance, had asked for the total drop figures of a VIP patron about to face sanctions.

“There was clearly going to be a huge impact on the service providers when we did this and it was my understanding when they’re looking for table drop they are looking for that kind of data because they have to have that conversation, obviously, with the service provider and senior management,” said Tottenham.

However, Tottenham maintained it was only a matter of BCLC being considerate and accommodating to the casinos to inform them of the potential revenue impact to the business. Tottenham said revenue loss played no role in BCLC’s decision making.

“We didn’t want to just drop this on the sites and all of a sudden, boom, 10 or 20 of their players are now on sourced-cash conditions,” Tottenham elaborated.

“Senior management, in part the VP [Kroeker], wanted to be able to reach out with the service providers in advance …because that didn’t necessarily happen with Jia Gao,” said Tottenham, referring to the most lucrative high roller at the time.

“The revenue concern from the perspective of BCLC was not an issue,” said Tottenham.

The commission has heard varied testimony about what regulatory and law enforcement agencies (BCLC, GPEB, RCMP, FINTRAC) may have failed to prevent money laundering in B.C. casinos. The commission has heard of how bags of $20 bills, amounting to hundreds of thousands of dollars, were routinely deposited at cages for years on end (around 2010-17). As such, each agency has been represented by their own set of lawyers, such as Rajotte.

Tottenham was also cross-examined by Olivia French, counsel for the Canadian government, including the RCMP.

Tottenham had previously said he was unaware of any action being undertaken by police, but as French noted, police would never provide details to BCLC of a criminal investigation, if there was one.

Indeed there was one called E-Pirate — that tracked connections between organized crime and underground banks from China — however charges were dropped in November 2018.

In the coming months the inquiry will also examine how money laundering may have impacted Vancouver’s housing market.

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