Ontario’s Casino Rama has been making the news recently. An investigation into money laundering by a drug trafficking ring is said to show that as much as C$5 million was exchanged through the casino and the Mohawk Racetrack in 2004. In another report, documents obtained under freedom of information show that millions of dollars of Casino Rama revenue meant to reduce poverty of First Nations has gone elsewhere.

The drug ring appears to have avoided suspicion by playing just below the $10,000 threshold of reporting cash transactions required by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). When members of the drug ring cashed out they would ask for a cheque, which would then be deposited in their bank accounts. The Royal Canadian Mounted Police (RCMP), who conducted the investigation into the drug trafficking organisation, is certain that other criminals use the same loophole to launder money at casinos.

Around C$60 million a year of Casino Rama revenue is paid to a small board of First Nation directors to distribute to 133 chiefs in Ontario. Legal fees, unexplained expenses and even a payment to a band that does not officially exist have eaten away millions of dollars. According to the Ministry responsible for casinos, there are auditing measures to ensure that Casino Rama revenue is accounted for, but the chiefs must monitor how the money is spent.

Casino Rama is the largest aboriginal (First Nations) casino in the country and the only First Nations commercial casino. Under an agreement due to expire in 2011, some aboriginal communities receive a share of the gaming revenue and in February, after three years of negotiations, a deal has been struck that should double their income. Under the agreement the Chiefs of Ontario in 2011 will give up their rights to casino revenue and in return get a 1.7% share of revenue from provincial lotteries and casinos and an immediate payment of C$201 million. The deal should is expected to provide over C$3 billion over 25 years. (E-05.20.08)

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