Executive Summary: Key Legal and Evidentiary Issues

• BCLC's authority to impose sourced cash conditions on casino patrons was challenged as exceeding its jurisdiction under the Gaming Control Act.

• Procedural fairness concerns arose from the petitioner receiving no advance notice, opportunity to be heard, or reasons for being placed on sourced cash conditions.

• The petitioner's pattern of frequent $9,000 cash buy-ins (just below the $10,000 threshold) raised money laundering "structuring" concerns despite his innocent explanation.

• Reasonableness of the decision was contested given the petitioner's documented $141,655 in net casino winnings during the relevant period.

• Privacy legislation was invoked, arguing BCLC had no authority to collect the private banking information of casino patrons.

• Whether the conditions constitute stigmatizing "blacklisting" or merely administrative risk management measures was central to the fairness analysis.

Background and facts of the case

Ali Ghotaymi, an employee of Canada Post, sought judicial review of a decision by the British Columbia Lottery Corporation (BCLC) to place him on "sourced cash conditions" for his activity at British Columbia casinos. Sourced cash conditions require a casino patron to provide evidence of the source of any cash used for buy-ins, including bank account information and records of the transaction by which the cash was withdrawn from that account. While BCLC imposes sourced cash conditions on any cash buy-in of $10,000 or more, Mr. Ghotaymi was required to provide source information for a cash buy-in of any amount.

The decision came after staff at River Rock Casino made an incident report of Mr. Ghotaymi making a cash buy-in of $9,000, just under the $10,000 limit. According to BCLC records, Mr. Ghotaymi had made 29 "large cash transactions" at BC casinos between February 2019 and July 2021. Eleven of those were in the amount of $9,000. On February 17, 2020, Mr. Ghotaymi made two $9,000 buy-ins at two different casinos within less than two hours. BCLC records at the time of the decision showed that Mr. Ghotaymi was an employee of Canada Post, meaning that he was not employed in a predominantly cash-based business. The conditions were imposed because Mr. Ghotaymi's pattern of cash buy-ins raised money laundering concerns for BCLC, although it did not find that Mr. Ghotaymi is actually involved in any money laundering activity.

The petitioner's explanation

Mr. Ghotaymi offered an innocent explanation for his buy-in practices. He explained that he frequently comes to the casino with $9,000 in cash, which typically comes from his earlier winnings at the casino. Despite BCLC's concern about the use of cash, it continues to allow winnings to be paid out in cash. Mr. Ghotaymi maintained that 9 is a lucky number, and he was not engaging in structuring by using cash buy-ins of $9,000. If he has a winning night, he deposits any amount of cash in excess of $9,000 in his bank account and keeps the base $9,000 cash for his next visit to the casino. BCLC's own evidence showed that in the period between February 2019 and July 2021, his net winnings at the casino, after buy-ins, was $141,655. Since the casino pays him out in cash, his explanation that his large cash buy-ins come from cash winnings paid to him by the casino has considerable merit.

Regulatory context and anti-money laundering framework

BCLC is an agent of the provincial government and is responsible under the Gaming Control Act, S.B.C. 2002, c. 14 to conduct and manage lottery, casino, and gaming operations in the province. Money laundering has long been a problem in BC casinos. In its June 2022 report, the Commission of Inquiry into Money Laundering in British Columbia found that casinos were a major source of laundered money, particularly before 2015. Commissioner Cullen reported that in 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more. He said there was a direct link between criminal organizations and cash transactions at BC casinos. Commissioner Cullen was critical of BCLC for inadequately addressing these obvious money laundering problems prior to 2015, stating that its approach "reflected the completely unacceptable and unreasonable risk tolerance."

However, starting in 2015, BCLC "finally began to respond to these concerns." In an October 1, 2015 letter of expectation, the Attorney General directed BCLC to "[e]nhance customer due diligence to mitigate the risk of money laundering in British Columbia" and to implement "processes for evaluating the source of wealth and source of funds prior to cash acceptance." BCLC's sourced cash condition policies are also supported by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000 c. 17, whose objectives include the implementation of "specific measures to detect and deter money laundering." BCLC has developed an Anti-Money Laundering and Anti-Terrorism Financing Compliance Manual, which sets out criteria for assessing the risk that a casino patron presents regarding money laundering.

Procedural fairness analysis

Mr. Ghotaymi argued the decision to place him on sourced cash conditions was procedurally unfair in that he was not given notice of the decision before it was made or reasons for the decision after. He was not advised that he was placed on sourced cash conditions until November 16, 2024. This was because in August 2021, he had enrolled himself in BCLC's "Voluntary Self-Exclusion Program," which meant that he had asked BCLC to bar him from admission to a casino for a three-year period. That period expired in 2024, and he returned to the casino after the break. It was then that he learned he had been placed on sourced cash conditions.

The Court disagreed with BCLC's argument that no duty of fairness arises from the decision, finding that placing Mr. Ghotaymi on sourced cash conditions affects at least his privileges and potentially his interests as it relates to participating in public gaming activities in British Columbia casinos. However, applying the Baker factors, the Court found the duty of fairness in this case is very much at the low end. The decision was administrative, not adjudicative, because it regulates how Mr. Ghotaymi may buy-in at a casino. It does not adjudicate whether Mr. Ghotaymi is involved in money laundering and does not impose sanctions or penalties on him. Furthermore, the activity in question—gambling—is not intrinsic to an individual's dignity, security, or fundamental liberty. It is a recreational activity.

The Court found that, generally, a patron placed on sourced cash conditions should receive reasons for the decision. However, BCLC has now provided Mr. Ghotaymi with an explanation for its decision, correcting the procedural fairness deficiency by supplying reasons. For these reasons, the Court found there has been no breach of procedural fairness in this case.

Substantive reasonableness of BCLC's decision

The Court found BCLC's decision reasonable. First, it is objectively reasonable for anyone who frequently uses large sums of cash in any type of transaction to have the source of that cash scrutinized. Second, when a person frequently uses cash in amounts that fall just shy of an amount that is known to automatically trigger a source assessment, the Court found that is a reasonable indicator, though certainly not proof, of possible money laundering activity. Third, it is very reasonable for BCLC to operate in a risk-averse way when it comes to possible money laundering. Commissioner Cullen found that money laundering was pervasive in BC casinos, and BCLC's efforts to control it had been inadequate.

The Court acknowledged that Mr. Ghotaymi's preferred practice of using cash winnings from one day as a buy-in at the casino on another day unfortunately overlaps with practices that others may use for money laundering. Thus, BCLC's administrative measures that seek to control criminal money laundering activity has the collateral effect of restricting the kind of innocent activity described by Mr. Ghotaymi. However, given the harms of money laundering and the relatively unintrusive requirements of sourced cash conditions, an overinclusive approach that captures some innocent activities in the sourced-cash-conditions net is preferable to one that might allow money laundering to slip through the cracks. The Court concluded it cannot say that BCLC is acting unreasonably by being cautious and overinclusive.

Privacy legislation claim and final ruling

Mr. Ghotaymi also argued that sourced cash conditions violate the Freedom of Information and Protection of Privacy Act because BCLC, a government agency, has no authority to collect the private banking or financial information of casino patrons. The Court was not persuaded by this argument. This issue was addressed by way of a complaint to the Office of Information and Privacy Commissioner who found that BCLC's collection of Mr. Ghotaymi's banking information did not offend s. 26(c) of the Act because the banking information collected relates directly to and is necessary for BCLC's anti-money laundering activities, which fall within its statutory mandate and are integral to its operation. The Court agreed with the Privacy Commissioner's decision.

The Court dismissed the petition. BCLC did not seek costs. No monetary award was at issue in this case, as the petition challenged the validity of administrative conditions rather than seeking damages.