Commission of Inquiry into Money Laundering

in British Columbia

Application for Standing as a Participant in the Inquiry by

Gateway Casinos & Entertainment Limited
Tel: 604-296-5077
Email: legal@gatewaycasinos.com

September 6, 2019

Counsel:

David Gruber
2500 – 666 Burrard Street
Vancouver, BC V6C 2X8
Tel: 604-891-5150
Email: gruberd@bennettjones.com

Laura L. Bevan
1600 – 925 W. Georgia Street
Vancouver, BC V6C 3L2
Tel: 604-631-9106
Email: lbevan@lawsonlundell.com

Meg Gaily
1600 – 925 W. Georgia Street
Vancouver, BC V6C 3L2
Tel: 604-631-9250
Email: mgaily@lawsonlundell.com
A. Gateway’s interest in the Inquiry

1. Gateway Casinos & Entertainment Limited (“Gateway”) seeks standing as a participant

in the Commission of Inquiry into Money Laundering in British Columbia (the

“Inquiry”), in relation to the Commission’s examination of the gaming sector in British

Columbia.

2. Gateway is one of the three main gaming service providers to the British Columbia

Lottery Corporation (“BCLC”). It operates three of the largest gaming and entertainment

facilities in the Lower Mainland: Grand Villa Casino in Burnaby, Starlight Casino in

New Westminster, and Cascades Casino in Langley. Gateway also operates 11 additional

gaming sites across metro Vancouver, Vancouver Island, and the Okanagan. Gateway

has approximately 3,900 employees in British Columbia, the bulk of whom are registered

gaming workers.

3. Outside of British Columbia, Gateway operates the Grand Villa and Starlight Casinos in

Edmonton, Alberta, and 11 gaming and entertainment facilities in Ontario, including

Casino Rama, one of the premier gaming and entertainment destinations in Ontario.

Gateway’s operations are regulated in those provinces by the Alberta Gaming, Liquor

and Cannabis Commission and the Alcohol and Gaming Commission of Ontario,

respectively. Gateway has approximately 8,300 employees across Canada.

4. Gateway is operated by professionals with years of experience in the gaming industry in

British Columbia, across Canada, and internationally. In Dirty Money: An Independent

Review of Money Laundering in Lower Mainland Casinos conducted for the Attorney
 3

General of British Columbia (“Dirty Money”), Peter German, Q.C. accepted that

Gateway has a positive reputation in the industry of operating in compliance with

applicable laws and regulations, and of following anti-money laundering (“AML”)

requirements for service providers. 1 Consistent with that, Gateway intends to engage

with the Commission’s process in an open and transparent manner.

B. Why Gateway seeks standing

5. Gateway’s participation is relevant to the Commission’s mandate. The Commission’s

terms of reference contemplate a wide-ranging review of the regulatory environment that

Dr. German concluded in Dirty Money contributed to the rise of money laundering in

Lower Mainland casinos. As Dr. German noted, gaming service providers are “at the

pointy end of the stick” 2 of the complex web of provincial and federal regulations of the

gaming industry that make up that regulatory environment.

6. Service providers are subject to provincial regulation under the Gaming Control Act 3 and

Gaming Control Regulation 4, which are administered through the Gaming Policy and

Enforcement Branch (“GPEB”) of the provincial government. Federal regulations apply

to casino service providers through the Proceeds of Crime and Terrorist Financing

(Money Laundering) Act 5 and the Criminal Code6. In large part, the manner in which

Gateway is required to meet the standards set by these provincial and federal regulations

regarding combatting money laundering in the gaming industry is determined by BCLC

through its Operational Service Agreements (“OSAs”) with service providers and

1
Dirty Money, March 31, 2018, para. 260A.
2
Ibid., para. 24.
3
S.B.C. 2002, c. 14
4
B.C. Reg. 208/2002.
5
S.C. 2000, c. 17.
6
R.S.C. 1985, c. C-46.
 4

BCLC’s Casino and Community Gaming Centre Standards, Policies and Procedures (the

“Standards”).

7. The Commission is required to examine the above regulatory environment under its

Terms of Reference, in particular:

(a) Section (1)(a)i, which requires the Commission to conduct hearings and make

findings of fact respecting the extent, growth, evolution and methods of money

laundering in the gaming and horse racing sectors;

(b) Section (1)(b), which requires the Commission to conduct hearings and make

findings of fact respecting acts or omissions of,

(i) regulatory authorities in respect of the gaming and horse racing sectors,

and

(ii) individuals with powers, duties or functions in respect of the gaming and

horse racing sectors; and

(c) Section (1)(c), which requires the Commission to conduct hearings and make

findings of fact respecting the scope and effectiveness of,

(i) regulatory authorities in respect of the gaming and horse racing sectors,

and

(ii) individuals with powers, duties or functions in respect of the gaming and

horse racing sectors.

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8. Prior consideration of applications for standing in public inquiries and related

proceedings establishes that a party will have a sufficient interest in the Inquiry to merit

full standing not only in the typical case where the party reasonably apprehends its

reputational interests could be harmed; but also where the party's legal interests stand to

be affected, where the party may be seriously affected by a recommendation or finding in

relation to its interests in a way not shared by the general public or where the party has

vital information to give to the Inquiry. 7

9. Gateway's legal and practical interests do stand to be affected by findings of fact and

recommendations made by the Commission in its final report, which will have a direct

impact on the regulation of gaming service providers’ operations in British Columbia,

and perhaps elsewhere in Canada. 8 The manner in which those legal and practical

interests stand to be affected differs from the general public in that providing gaming

services is the core of Gateway's business.

10. As a key gaming service provider, Gateway has vital information to give to the Inquiry.

Gateway participated voluntarily in Dr. German’s review of the gaming industry.

Gateway provided Dr. German and his team with “complete access” 9 to the information

and materials required for his study of money laundering in Lower Mainland casinos.

Gateway’s employees provided documents, sat for interviews, and conducted site visits

with Dr. German’s team to ensure Dr. German had a complete understanding of the

measures Gateway takes to comply with applicable regulations, and to prevent, detect and

7
R. Bessner & S. Lightstone, Public Inquiries in Canada: Law and Practice (Toronto: Thomson Reuters, 2017) at
134.
8
Gateway is subject to a similar web of regulation in Alberta and Ontario, though there are some key differences
among the provincial regulatory regimes.
9
Dirty Money, supra note 1, para. 255.
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report suspicious activities within Gateway’s casinos. Dr. German noted that no request

for information was rejected. 10

11. The Commission has described the Inquiry as an “opportunity to further shine a light” on

the issues examined in Dirty Money, among others. To the extent the Commission

requires further information from Gateway to assist in this effort, Gateway’s participation

will ensure the Commission has the same access to and quality of information that was

available to Dr. German.

12. While this application is not focussed on potential reputational impact to it or its officers

or employees, Gateway does note that Dr. German described gaming service providers in

Dirty Money as the “front line of defence” 11 against money laundering in casinos. As

such, Gateway anticipates that the hearings and fact finding of the Commission in the

above-referenced parts of the Terms of Reference will likely involve a review of the

conduct of gaming service providers such as Gateway, and that Gateway may have an

interest in findings of fact to be made in respect of that evidence.

13. Participating in the Inquiry will ensure Gateway has the flexibility to respond to issues

raised by the Commission in the course of the Inquiry, and will contribute to the thorough

and fair fulfillment of the Commission’s mandate.

14. In Dirty Money, Dr. German described casinos in British Columbia as “an integral part of

the Province and a vital industry.” 12 Gateway understands the need to protect the

10
Ibid.
11
Ibid., para. 25.
12
Ibid., para. 9.
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integrity of this vital industry, and the good reputation of Canada’s gaming service

providers, through transparency and accountability.

15. Gateway understands that the province is in the process of reviewing and implementing

the 48 recommendations set out in Dirty Money. There remains much work to be done,

however Gateway has and will continue to work with GPEB and BCLC to implement

recommendations that require action within Gateway, and is committed to providing the

necessary feedback to the regulator and to BCLC about the effect of those

recommendations, including through input into the recommendations that may be made

by the Commissioner.

C. Gateway’s proposed contribution to the Inquiry

16. As indicated above, Gateway has already provided Dr. German with considerable

evidence and information, which it can supplement, explain and contextualize as

necessary. Gateway proposes to supplement that information and evidence to the extent

necessary to assist the Commission in fulfilling its mandate under the Terms of

Reference.

D. The nature and extent of Gateway’s proposed participation

17. Gateway seeks full standing as a participant in those phases of the Inquiry dealing with

the aspects of the Terms of Reference referred to in paragraph 7 above, including public

hearings on the gaming and horse racing sectors and on government and official

regulation and oversight thereof, and the study commission to the extent it may include

any public sessions on those topics.