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The Globe and Mail

B.C. casino operator wins Ontario contract amid money-laundering probe

A morning workout at Woodbine Racetrack on June 27, 2013.

Moe Doiron/The Globe and Mail

The gambling operator whose flagship casino is at the centre of money-laundering probes in two provinces has been awarded another contract by Ontario's lottery corporation despite calls for the government to halt its dealings with the company.

The Ontario Lottery and Gaming Corporation (OLG) announced on Tuesday that it has selected Great Canadian Gaming Corp. and its partner, Clairvest Group Inc., to run a casino and three slots operations west of Toronto for the next 20 years. Great Canadian was awarded a lucrative contract in August to run the casinos in the Greater Toronto Area.

The latest deal makes Great Canadian, which is based in Coquitlam, B.C., the dominant gambling operator in Ontario. Once both contracts are finalized, the company will control gambling along a vast stretch of Highway 401, from casinos in Eastern Ontario to Woodbine Racetrack in the GTA, and a casino in Brantford and slots at Mohawk Racetrack and Flamboro Downs west of Toronto.

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Rod Baker, chief executive officer of Great Canadian, called the latest contract a "true milestone" for the company. "We thank OLG for their confidence in our company."

The contracts are part of a strategic review OLG is conducting of its casino and lottery businesses in an effort to find new revenue sources. But money-laundering allegations swirling around Great Canadian's River Rock Casino in Richmond, B.C., have cast a cloud over the OLG's plans to privatize and increase the number of gambling establishments in the province.

Concerns about money laundering in British Columbia were sparked by a report from the province's gambling regulator that $13.5-million in $20 bills was accepted at River Rock in July, 2015. An independent expert retained by B.C.'s Attorney-General confirmed this month that casinos in the Lower Mainland are conduits for large, suspicious cash transactions. The scale of the problem is still under investigation. A spokesman for the Alcohol and Gaming Commission of Ontario told The Globe and Mail the regulator is reviewing the B.C. report and how it would affect Great Canadian's "obligations" in Ontario.

Tony Bitonti, a spokesman for OLG, said Great Canadian is "currently in good standing with the regulator."

Terrance Doyle, chief operating officer of Great Canadian, has said, "to our knowledge, the company is not under investigation in any jurisdiction."

Ontario's two opposition parties are calling on the provincial government to halt much of OLG's modernization until the two probes are finished.

Progressive Conservative finance critic Victor Fedeli said on Tuesday it is "quite shocking" that Ontario's lottery corporation would award another contract to Great Canadian before the regulatory probes are complete.

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In October, he called on the government to put the deal on hold for the GTA casinos.

Premier Kathleen Wynne told The Globe earlier this week that she saw no reason to halt any deals with Great Canadian. "They're actually not charged with anything as I understand it," she said. "Everybody needs to follow the rules, whether you're an individual or whether a gambling conglomerate."

The four establishments in Tuesday's deal include 2,500 slot machines and 60 table games, which generated about $450-million in gambling revenue last year.

OLG is facing opposition from the Niagara Falls region on plans to modernize casinos in the border city. Lawyers will seek a judicial review in court on Wednesday, arguing that the region has not been consulted about the OLG's plans and it wants a greater say.

A report the city commissioned from consulting firm HLT Advisory found OLG's proposal to expand gambling at Toronto's Woodbine Racetrack could cost the region up to 1,400 of its nearly 4,100 gambling jobs.

Niagara Falls wants more gambling, Mayor Jim Diodati says, but he adds that the provincial government has been unreceptive to working with the city. He also wants OLG to make the competitive bidding documents for the two Niagara Falls casinos public so they can be debated.

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"This is the No. 1 employer in our community, and what they're proposing is like the closing of an automotive plant in Oshawa," Mr. Diodati told The Globe.

Mr. Bitonti said the documents contain commercially sensitive information and must remain confidential.

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