In 2015, British Columbia (BC) realized there was a gambling problem. This one, though, was centered on what could only be described as an out-of-control money-laundering scheme that affected a number of casinos, including most notably, River Rock Casino Resort. Since the revelation was first made, the province and the BC Lottery Commission (BCLC), which oversees gambling activity, has implemented new anti-money-laundering (AML) policies, patting itself on the back for its ability to manage the situation. However, it quickly became obvious that the situation had not been managed and, even as recently as this past February, it was determined that money laundering was still happening – sometimes with the government’s own accounts. Now, the BCLC has thrown its hands up in exasperation and is making a public cry for help.

The BCLC spent about $5.4 million trying to control money laundering. Instead of conducting a competitive bidding process, it awarded a contract directly to a US-based company that supplies AML software to banks, but which had never been tested in a casino environment. As it turns out, the software wasn’t up to the task.

According to Peter German, a former deputy of the Royal Canadian Mounted Police (RCMP), testing was done on the software after it was already put into action. The software was found to contain a number of deficiencies, including the lack of a field for a customer’s middle name, which caused the instances of false positives to skyrocket “through the roof.”

German adds, “The inability of the new system to deliver as BCLC had hoped means that BCLC must rely on its existing systems and manual intervention to monitor patrons. Any attempt by government and Crown agencies to develop hardware and software solutions must always be approached with great caution … [competitive bidding processes] exist for a reason.”