Sanctions and Decisions

DATE OF HEARING:

HEARING PANEL:

HEARING BEFORE A PANEL OF THE BOARD OF ALBERTA GAMING, LIQUOR AND CANNABIS COMMISSION

IN THE MATTER OF the Gaming, Liquor and Cannabis Act Revised Statutes of Alberta 2000, Chapter G-1, as amended and the Regulation

APPLICANT / REPRESENTATIVE:

and

Calgary Casino Limited Partnership o/a Cash Casino Place (Applicant) 4040 Blackfoot Trail SE Calgary, AB T2G 4E6

REGULATORY SERVICES DIVISION:

December 7, 2022

Tongjie Zhang, Presiding Member Jack Fujino, Panel Member Maureen Moneta, Panel Member

Joseph Chapple, Casino Manager Mike Vickerman, Regional General Manager

Todd Stearns, Hearing Officer Petrina Nash, Resource Officer

DECISION OF THE HEARING PANEL The Panel finds that the licensee contravened sections 9.17.1 b) and 1.17.5 c) of the Casino Terms & Conditions and Operating Guidelines (CTCOG). However, in accordance with section 94(7)(b) of the Gaming, Liquor and Cannabis Act (the Act), the Panel replaces the administrative sanction of a $250 fine for the contravention of section 9.17.1 b) with a warning and replaces the administrative sanction of a $500 fine for the contravention of section 1.17.5 c) with a warning.

Further, the Panel replaces the condition imposed by Regulatory Services with the following condition: • Facility must add funds withheld from the tournament, totaling $11,236, to an approved manual progressive jackpot at Cash Casino Place before June 30, 2023, in accordance with section 1.17.5 c) of the CTCOG.

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I. Jurisdiction and Preliminary Matters [1] By letter dated September 16, 2022 Regulatory Services of the Alberta Gaming, Liquor and Cannabis Commission (AGLC) advised the licensee, Calgary Casino Limited Partnership operating as Cash Casino Place, that they failed to comply with Board policy and approved tournament structure and contravened: • Section 9.17.1 of the CTCOG: With prior written approval from AGLC: b) A manual progressive jackpot may be offered in conjunction with any poker game

•

Section 1.17.5 of the CTCOG: Casino facility licensees must split the revenue generated from entry fees, re-buys and add-ons with the charity holding the event licence as follows: c) the remaining revenue generated must be allocated to the casino facility licensee in order to pay all prize amounts.

[2] Regulatory Services, without a hearing, imposed an administrative sanction of a $250 fine for the alleged contravention of section 9.17.1 b) and a fine of $500 for the alleged contravention of section 1.17.5 c) of the CTCOG. Regulatory Services also advised Cash Casino Place that the following condition (the condition) had been imposed on the Casino Facility Licence 570351: • Facility must retroactively disperse funds withheld from the tournaments in accordance with Section 1.17.5 c) of the CTCOG. Any funds that cannot be dispersed within 90 days must be added to the currently approved “Hot Seat” manual progressive jackpot.

[3] Cash Casino Place subsequently applied for a hearing before a Panel of the Board of the AGLC pursuant to Section 94(1) of the Act.

[4] In accordance with section 11 of the Act, the Chair of the Board designated three members of the Board to sit as a Panel to conduct the hearing and make a decision – Tongjie Zhang, Jack Fujino and Maureen Moneta.

[5] The parties and the Hearing Panel were provided with a record containing various documents pertaining to the issues before the panel. The Applicant confirmed receipt of the Notice of Hearing dated October 26, 2022 and the attached hearing record. The following documents were entered into evidence: • Exhibit 1 Hearing Record, including Tabs A to D

[6] Mike Vickerman, representative for Cash Casino Place, requested that an email from Todd Stearns to Cash Casino Place dated January 16, 2019 be entered into evidence. Regulatory Services objected to the entry and Presiding Member Zhang asked Cash Casino Place to respond to Regulatory Services’ objection. Mr. Vickerman suggested that Cash Casino Place could speak to the contents of the email in their oral evidence and withdrew the request to have the document entered on the record.

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II. [7]

Issues Did Cash Casino Place contravene sections 9.17.1 b) and 1.17.5 c) of the CTCOG?

[8] If Cash Casino contravened both or either of the above, should the administrative sanctions of a $250 fine and a $500 fine imposed by Regulatory Services be confirmed, replaced or cancelled?

[9]

III.

Should the condition imposed by Regulatory Services be confirmed, replaced, or cancelled?

Regulatory Services Submissions

[10] Regulatory Services called one witness, Inspector Peter Snowdon, to provide evidence. He has worked as an AGLC inspector for nearly 15 years. Inspector Snowdon prepared an Incident Report dated September 15, 2022 for events that occurred from January 28 to May 5, 2022 at Cash Casino Place (Exhibit 1, Tab B).

[11] Inspector Snowdon specializes in gaming and is familiar with Cash Casino Place. He visits Cash Casino Place for the purposes of conducting regular operating checks and inspections to ensure compliance and address any policy issues.

[12] On April 12, 2022, Supervisor Ken Jennings and Inspector Ray Wen attended Cash Casino Place to conduct a routine operating check and identified a prize wheel in the poker room. Inspector Wen brought the wheel to the attention of Inspector Snowdon, who was the inspector assigned to Cash Casino Place at the time.

[13] On April 22, 2022, Inspector Snowdon attended Cash Casino Place ad spoke with Poker Manager, Don Tinordi, about the prize wheel. Mr. Tinordi advised Inspector Snowdon the following:

• • • • •

•

Cash Casino Place had changed an existing progressive jackpot tournament, called Hot Seat, to a Wheel of Cash promotion The changes were not submitted to Regulatory Services as Cash Casino Place had an existing approval for the Hot Seat tournament The same amount was held back from player entry fees (two dollars) to be put aside for the Wheel of Cash jackpot Mr. Tinordi began collecting entries for the Wheel of Cash on January 28, 2022 and began ballot entries on February 1, 2022 Players were no longer required to win and play in the final tournament for a chance to win the jackpot as previously required under the Hot Seat rules. Instead, all players that participated in the Wheel of Cash tournament received a ballot to be placed into a draw box At the beginning of each month, ten ballots were drawn. The players whose names were drawn had the opportunity to spin the Wheel of Cash which had various denominations for jackpot prize amounts to be won

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[14] Inspector Snowdon advised the Panel that a manual progressive jackpot is any poker game or event where a portion of the entry fee is held back and added to a jackpot pool to be awarded at a later time. He asserted that the casino is responsible for holding these player funds in trust and highlighted the importance of securing the funds and maintaining thorough records.

[15] Inspector Snowdon confirmed that a casino facility licensee may offer a manual progressive jackpot with prior written approval from AGLC and suggested that, in order to get approval, the licensee simply needs to submit a request to the Gaming Operational & Compliance Specialist of the Regulatory Services Division.

[16] Further, Inspector Snowdon confirmed for the Panel that any changes to a previously approved tournament structure must be submitted to Regulatory Services for reapproval.

[17] Inspector Snowdon stated that there were changes to the payout structure and to the entry method when the Hot Seat was changed to the Wheel of Cash, as the Hot Seat tournament required that a player win and play in the final tournament where they had the opportunity to open an envelope containing a random seat number in it. The player had the choice to open the envelope or to automatically collect 10 per cent of the jackpot. If the player chose to open the envelope and it contained their seat number, they would collect 100 per cent of the jackpot. If it did not contain their seat number, they did not win.

[18] Inspector Snowdon explained that when a request for approval for a manual progressive jackpot is submitted, it must include details about how the licensee plans to address player funds held in trust at the conclusion of the tournament, known as a termination plan.

[19] Inspector Snowdon found no evidence that a termination plan was submitted to Regulatory Services or posted in the casino facility.

[20] Inspector Snowdon confirmed that Cash Casino Place had documentation to track player funds held back and dispersed over the course of the Wheel of Cash tournament between January 28, 2022 and May 5, 2022. Although all monies collected were accounted for, some of the entry forms were missing player names or were incomplete.

[21] Inspector Snowdon advised the Panel that he has had numerous discussions with Mr. Tinordi and Cash Casino Place about the importance of record keeping and highlighted deficiencies found with a Bad Beat tournament in November 2021 and a ladies poker league tournament earlier in 2022.

[22] As a result of Inspector Snowdon’s discussion with Mr. Tinordi, Inspector Snowdon seized copies of the entry forms, tournament summary documents and ballots for review. Mr. Tinordi emailed the Gaming Operational & Compliance Specialist, Todd Stearns, at AGLC on April 22, 2022. He advised Mr. Stearns about the Wheel of Cash tournament and explained which rules of play had changed and what had not changed.

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[23] Inspector Snowdon advised the Panel that Mr. Stearns requested further information about the Wheel of Cash tournament. Mr. Tinordi advised Mr. Stearns via email correspondence (Exhibit 1, Tab B, Attachments 1, 3 and 5) that:

• • • •

•

$21,674 was collected during the operation of the Wheel of Cash tournament $10,438 had been awarded back to players through jackpot wins Cash Casino Place is holding the remaining Wheel of Cash monies, $11,236 Since February 1, 2022, the number of tournament entries per day had steadily increased, resulting in up to $90 of additional revenue per day to the in-house charity Majority of players have indicated their preference for the Wheel of Cash tournament

[24] Upon review of the details provided by Mr. Tinordi and the copies of tournament documentation collected by Inspector Snowdon, Mr. Stearns determined that the Wheel of Cash structure could not be approved as it created a raffle scheme. Inspector Snowdon explained that a raffle occurs where an entry fee is collected and a ballot is entered into a draw box, to then be drawn at random to identify the winners.

[25] Inspector Snowdon asserted that this raffle scheme included a random draw for winners who did not need to do anything to qualify other than pay the tournament entry fee which was vastly different than the qualification requirements to win the Hot Seat jackpot.

[26] Inspector Snowdon asserted that casinos in Alberta are not permitted to conduct raffles using player funds, only a licensed charity can conduct a raffle.

[27] Inspector Snowdon clarified that casino facility licensees may conduct promotions which involve a “no purchase necessary” ballot entry. A casino promotion must be entirely funded by the casino itself and not through the collection or hold back of player funds.

[28] Once Mr. Tinordi learned that the Wheel of Cash was not an approved tournament structure, he advised Mr. Stearns via email on May 5, 2022 (Exhibit 1, Tab B, Attachment 4) that he was suspending the Wheel of Cash tournament and would reinstate the Hot Seat tournament.

[29] Inspector Snowdon advised the Panel that the player funds were held back and dispersed by way of an unapproved tournament structure. As such, he stated that the condition imposed by Regulatory Services in the Notice of Administrative Sanction (Exhibit 1, Tab A) was imposed to attempt to collect the $10,438 that was awarded under the unapproved structure and put it back into the progressive jackpot.

[30] Inspector Snowdon suggested that the condition also stipulates that if Cash Casino Place is unable to pay a player that had previously won under the Wheel of Cash structure, their winnings would be placed into the Hot Seat progressive jackpot.

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[31] When asked by the Panel about why the condition required the return of funds through the Hot Seat tournament, Regulatory Services advised that the players who contributed to the progressive jackpot would be the same pool of players who would participate in the Hot Seat tournament.

[32]

Cash Casino Place currently operates three approved manual progressive jackpots.

[33] When asked by Cash Casino Place representatives, Inspector Snowdon confirmed that casino facility licensees are encouraged to follow best practices which include exploring opportunities that may exist to remove any policy barriers that restrict casino facilities from optimizing the potential of gaming floors and work together with AGLC to identify ways which help streamline processes and optimize efficiencies.

IV. Cash Casino Place Submissions [34] The representatives for Cash Casino Place called Don Tinordi, Poker Manager, to give evidence. Mr. Tinordi specializes in poker and is familiar with the portions of the CTCOG that govern poker and promotions.

[35] Mr. Tinordi stated that when there is a change in policy, the casino receives a bulletin which is shared with managers and then communicated with staff. He was not aware of a bulletin that was issued in August 2020 regarding changes to the manual progressive jackpot policies.

[36] Mr. Tinordi reiterated the differences between the Hot Seat and Wheel of Cash rules. He stated that the Hot Seat tournament had been in place at Cash Casino Place for several years and that it was approved by AGLC in 2019. He stated that when he changed it to the Wheel of Cash, he did not feel it was necessary to notify Regulatory Services as he felt the already approved Hot Seat structure was only slightly varied.

[37] When asked by the Panel whether the approval received in 2019 was intended to be ongoing, Mr. Tinordi advised that the January 16, 2019 email from Mr. Stearns suggested that the approval would expire on December 31, 2019. However, Mr. Tinordi stated that he could not find evidence of further communication about the approval and believed that if Cash Casino Place were not approved, it would have received further communication from Mr. Stearns.

[38] When Mr. Tinordi transferred the leftover Hot Seat jackpot funds into the Wheel of Cash jackpot, he did not consider those funds to be progressive jackpot funds but rather promotional funds. He felt that he was acting in accordance with the CTCOG and did not think consultation with AGLC was necessary at that time.

[39] Mr. Tinordi stated that generally, unless required by anti-money laundering provisions or other policies, a player who enters these tournaments is not required to verify their identity; they simply provide their name. Mr. Tinordi suggested that it would be challenging to locate all the players who won during the Wheel of Cash tournament to retroactively collect the $10,438 paid out. Cash Casino Place would need to review 300 tournament summaries and locate the winners from each tournament. He

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stated that, on average, 3-10 players were paid out per tournament so he estimated he would need to look through 1,500 entries.

[40] Mr. Tinordi shared that although some players preferred the Hot Seat tournament, the majority of players preferred the Wheel of Cash. He stated that Cash Casino Place did not receive any complaints from players about the tournament or the payout of funds.

[41] Mr. Tinordi reiterated that from January 28 to May 5, 2022, the entries per day increased by up to 17 which created up to $90 more per day for the in-house charity.

[42] Mr. Tinordi felt that he was always acting in accordance with section 9.18 of the CTCOG and with the best practices that have been shared with him by AGLC previously.

[43] After Mr. Tinordi learned from Mr. Stearns that the Wheel of Cash could not be approved, he submitted two follow up proposals to address the remaining jackpot funds. Both proposals were rejected by Regulatory Services. Mr. Tinordi stated that he understood the reasons for the rejection of his first proposal, which would have allowed one final draw of 10 winners, but that he did not receive any feedback on why his subsequent proposal was rejected.

[44] Mr. Tinordi clarified that, at the time of the hearing, Hot Seat is not currently available at Cash Casino Place but confirmed that there are two other approved manual progressive jackpots currently running. He confirmed that funds totaling $11,236 still need to be dispersed.

V. Summation Regulatory Services [45] Cash Casino Place conducted a manual progressive jackpot without prior approval by modifying an existing tournament structure including how players qualify and how the jackpot is paid out.

[46] Regulatory Services is of the opinion that Cash Casino Place failed to exercise its due diligence in conducting the Wheel of Cash tournament without consulting with known contact points at AGLC.

[47] By shifting the progressive jackpot to a raffle scheme, Cash Casino Place has violated various policies, including the alleged contraventions as well as the promotional policies found in section 1.16 of the CTCOG. Regulatory Services is of the opinion that Cash Casino Place has withheld money from players and given out $10,438 under an unapproved tournament structure.

[48] Regulatory Services is of the opinion that Cash Casino Place has not provided any viable alternative remedy to address the remaining $11,236 held by the casino. Regulatory Services maintains that the imposed condition appropriately addresses the funds that were mishandled.

[49] Firstly, the condition requires Cash Casino Place to return the $10,438 that was previously awarded to winners of the Wheel of Cash. Second, the condition addresses players who are directly impacted and who actually played in the Wheel of Cash tournament. Finally, the condition requires that, within a reasonable time frame, if the funds cannot be dispersed to the tournament players, the

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remaining funds will be returned into an approved progressive jackpot to ensure they make their way back into players’ hands.

[50] Regulatory Services acknowledges that the Hot Seat tournament has been suspended and suggested that the condition could be amended to state that “any funds that cannot be dispersed within 90 days must be added to a currently approved manual progressive jackpot.”

[51] As such, Regulatory Services requests that the Panel confirm the administrative sanctions totaling $750 in fines and the imposed condition, subject to the suggested revision.

Cash Casino Place [52] Cash Casino Place contends that they may have contravened the CTCOG but only as a result of confusion with the policies. Cash Casino Place maintains that it did not believe the variance of the pre­approved structure was a violation of policy and that Cash Casino Place does its best to be compliant.

[53] Cash Casino Place implemented the Wheel of Cash in an attempt to enhance the contributions made to Alberta’s charities. Mr. Chapple, on behalf of Cash Casino Place, reiterated that there were no player complaints about the altered tournament structure.

[54] At the time of the incident, Cash Casino Place did not believe the poker game was operated in conjunction with a manual progressive jackpot. However, if the Panel finds that the Wheel of Cash tournament was offering a manual progressive jackpot, Cash Casino Place would accept the administrative sanction imposed for the contravention of section 9.17.1 b) of the CTCOG and pay the $250 fine.

[55] Cash Casino Place does not agree that it contravened section 1.17.5 c) of the CTCOG and, as a result, disagrees with the condition imposed by Regulatory Services.

[56] It is the opinion of Cash Casino Place that the $10,438 that were distributed via the Wheel of Cash went to the right players and that the funds were fairly won. There was no harm done and no complaints received. The condition requiring Cash Casino Place to locate all the players who participated in the Wheel of Cash from February 1 to May 5, 2022 is unnecessary and onerous.

[57] As such, Mr. Chapple suggests that the Panel replace the condition imposed by Regulatory Services with a condition that eliminates the requirement to retroactively disperse funds already distributed.

[58] Further, as Cash Casino Place does not currently offer the Hot Seat tournament, Cash Casino Place requests that the Panel impose a condition that allows Cash Casino Place to put the remaining $11,236 into another approved tournament jackpot pool at the facility to ensure that tournament players would have the opportunity to win the withheld funds back.

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VI. Analysis [59] The Panel carefully considered the oral evidence of the witnesses and the submissions of the parties.

[60] The Panel finds that Cash Casino Place has demonstrated their intent to comply with AGLC policies, regulations and legislation but that it has made erroneous assumptions when interpreting the CTCOG.

[61] The Panel finds that although the CTCOG does not explicitly define a manual progressive jackpot, the policy is intended to be broadly understood. As such, the Panel finds that a plain language definition of “progressive jackpot” is a jackpot resulting from the growing accumulation of funds.

[62] The Panel finds that $2 were held back from each player’s tournament entry fee to be added to the jackpot pool. As such, the Panel finds that both the Hot Seat and Wheel of Cash tournaments used a manual progressive jackpot scheme.

[63] The Panel finds that in 2019, Cash Casino Place received written approval from AGLC to offer a manual progressive jackpot in conjunction with a Hot Seat tournament. The Panel heard evidence that the email contained an expiration date but also heard from Regulatory Services that the Hot Seat tournament was approved. The Panel is unclear as to whether the approval had expired.

[64] The Panel finds that Cash Casino Place altered the qualification and payout structure of the tournament when it introduced the Wheel of Cash. Inspector Snowdon gave evidence that the Wheel of Cash tournament structure was inherently conducted as a raffle. He explained that when an entry fee is collected and a player receives a ballot to be entered into a draw, a raffle is created. The Panel finds that when Cash Casino Place altered the rules of the Hot Seat tournament to the Wheel of Cash, it introduced a raffle scheme.

[65] The Panel acknowledges that Cash Casino Place varied its tournament structure to improve player experience and generate more revenue for Alberta’s charities, in accordance with the revenue allocation provisions of the CTCOG.