Despite criticism and FinTRAC review, OLG maintains they are operating within the law

Ottawa Life published an article on April 4th that waved red flags about whether the Ontario Lottery and Gaming Commission (OLG) is being less than attentive to certain operations under its authority that may be in violation of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Over the last four years, many old-fashioned bingo halls in Ontario have evolved into charitable cGaming venues, with 90 per cent of them hosting 50+ machines that are indistinguishable from those found on casino floors, but that generate number outcomes differently. There are 37 such cGaming operations in the province. It is this differentiation that raises the thirteen questions that we put to Tony Bitonti, OLG's Executive Director of External Communications. He addressed some of them.

The Alcohol and Gaming Commission of Ontario (AGCO) have responded in writing to an Ottawa Life inquiry stating that their overarching regulatory objective is to ensure that all gaming in Ontario is operated within the law. This includes cGaming sites and bingo halls. These locations are subject to the Registrar’s Standards for Gaming/Lottery and the Registrar's Standards for Gaming, including the associated Notification Matrices.

Staff at the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) also informed Ottawa Life Magazine that they are “aware of these [cGaming] centres, which have historically only offered lottery-type activities, such as bingo, are not covered under PCMLTFA.” They also told us they are actively reviewing this matter.

OLG’s reply appears to stress that, in contrast to the FinTRAC statement, cGaming in Ontario is covered under PCMLTFA. “OLG complies with all federal and provincial regulations regarding lottery and gaming operations including those that apply to cGaming Centres,” Tony Bitonti informed us. Furthermore, “OLG also complies with FinTRAC and PCMLTFA regulations. OLG’s approach to compliance is comparable to other provinces which also offer cGaming operations.” This is point of confusion number one.

PCMLTFA’s definition of a casino includes “games operated on or through a slot machine or similar electronic gaming device, located at a fixed place of business, where there are more than 50 machines or similar devices in the establishment.” Mr. Bitonti offered a thorough explanation regarding the difference between cGaming bingo machines and casino slots, both of which take money from a player hoping for a pay-out and who couldn’t care less about the pay-out algorithm. The payout probability for both types of machines is pretty much evenly matched. This is point of confusion number two, because, let’s say, a vehicle is a vehicle whether it’s diesel or electric. It still has to comply to the same road safety standards, because, like gaming machines, a similar device is a similar device; ergo, is a charitable cGaming venue a casino? This is point of confusion number three.

Mr. Bitonti referred us to the ACGO’s Standards for Gaming that include Minimizing Unlawful Activity Related to Gaming. “AGCO standards require these centres to have procedures and training in place to prevent and detect illegal activity. Any suspected illegal activity must be reported to the AGCO and OPP Investigation & Enforcement Bureau,” Bitonti stated. He also pointed out that while cGaming centres are exempt from AGCO Standard 6.3, which specifically requires casinos to identify and prevent suspected money laundering activities, “there are several measures in place that assist in reducing the risk of money laundering at cGaming centres.” Bitonti provided us with several examples.

cGaming Centres are much smaller operations, have more restricted product offerings and player capacity, and have a loyal customer base generally familiar to staff. A cGaming win is considered by the Family Responsibility and Support Services Act as a win in a lottery scheme. Any prize over $1000 requires a check with the Family Responsibility Office to ensure any amount of support owed or in arrears is deducted from winnings before being paid to the patron. This interaction is tracked and helps eliminates anonymity of payouts at or above $1000. Winners must also provide identification to claim all larger prizes and the maximum permitted payout in cash is $1999.99, and there is a $3000 limit on the amount any one individual can insert into a game at a cGaming centre. However, cash inserted at that level would be very conspicuous and would be tracked by staff as is required by AGCO Gaming Standards.

Doubt was raised as to whether the municipalities that host cGaming establishments were properly informed about these casino-type venues, and whether the agreed-upon revenue sharing arrangement with OLG was being honoured. Mr. Bitonti was asked for, specifically: a statement of account for each municipality showing the funds paid, or not paid, the requisite increase in these payments, and if any municipalities felt they had been unwittingly hosting casinos as per FinTRAC’s definition. He provided us with a positive statement including numbers on the community benefits of hosting a cGaming venue.

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