The Auditor General of Ontario used mystery shoppers to test money laundering systems in Ontario casinos. [Image: Shutterstock.com]
sting process
Bonnie Lysick, the Auditor General of Ontario, has hired independent mystery shoppers to test Anti-Money Laundering (AML) systems in Ontario casinos. In a report published Wednesday, Lysyk said mystery shoppers walked away with checks worth C$36,700 ($27,311) from two casinos, nearly the full amount they originally brought into the casinos in cash.
To determine whether, in Ontario, money can be laundered through a casino.
The audit, part of an overall audit of the Ontario Lottery and Gaming Corporation (OLG), was conducted from January to September 2022. Outlining the use of mystery shoppers, Lysyk said: “It was intended to determine whether, in Ontario or not, it was possible to Money laundering through the casino.
Mystery shoppers went to the casinos with cash amounts ranging from C$5,000 ($3,725 USD) to C$11,000 ($8,195 USD). They played slot machines and table games for ten or fifteen minutes before trying to cash their chips and get checks in return.
Some disturbing results
At a casino, shoppers were able to get a C$4,900 ($3,651) check after entering with a C$5,000 ($3,725) C$10,600 cash check from an initial cash fund of C$11,000 ($8,195). . While the auditor noted that casino employees attempted to verify that the mystery shopper had wagered on the property, they were unable to confirm that the money came from legitimate winnings.
The total amount of checks shoppers were able to leave from two of the casinos was C$36,700, about 98% of the cash they entered. The report said the checks could be considered laundered money because “they can be represented as casino winnings as a source of funds for deposit in a bank.”
Mystery shoppers used their own money
In two other casinos, Mystery shoppers have been denied checks I had to leave the building with the cash. They were investigated by the Ontario Provincial Police for possible money laundering activity and banned from both casinos. Lysick asserted that the mystery shoppers used their own money, not the government’s money.
Changes are on the way
Lysyk made a number of recommendations that should help OLG reduce the risk of money laundering occurring in its casinos. One recommendation is that casinos require proof of source of funds when a person wants to buy for at least $10,000 Canadian ($7,442).
She believes that casinos should only issue a check if the funds can be verified as casino winnings. Lysyk also believes that OLG in general needs to improve its anti-money laundering practices, especially when it comes to proactive enforcement.
In response to local media after the report was published, an OLG spokesperson said that combating money laundering is a top priority for OLG. He said the company will consider Lysyk’s recommendations and that OLG plans to implement a source of funds verification on cash purchases over C$10,000 starting in June 2023.
Not everyone was happy with Lysyk’s sting operation. Ontario Premier Doug Ford said, “You can’t do sting operations, you can’t suddenly delegate yourself and think you’re the Secret Service — you go around doing sting operations that fail, by the way.”
