ALCOHOL AND GAMING COMMISSION OF ONTARIO
IN THE MATTER OF The: Gaming Control Act, 1992, as amended
B E T W E E N:
Registrar, Alcohol and Gaming Commission of Ontario
Registrar
-and-
Min Yao He and Xiao Yan He operating as Lambton Daily Mart
Registrant
DECISION
Panel: Jacqueline Castel, Board Member
Bruce S. Miller, Board Member
Decision Date: May 13, 2010
Hearing Location: Toronto, Ontario
Alcohol and Gaming Commission of Ontario
90 Sheppard Avenue East, Suite 300
Toronto, Ontario M2N 0A4
Phone: (416) 326-0366 Fax: (416) 326-5566
Toll Free In Ontario: 1-800-522-2876
Website: www.agco.on.ca
Appearances
Registrar, Alcohol and Gaming Commission ) Sujin Chan, Representative
Min Yao He and Xiao Yan He, Registrant ) John Lee, Representative
Allegations
A hearing into an Amended Notice of Proposed Order (“NOPO”) dated January 14, 2010, file number 165369, to revoke the registration of MIN YAO HE and XIAO YAN HE (the “Registrant”), operating as LAMBTON DAILY MART, 102 Lambton Avenue, Toronto, Ontario, M6N 2S9 (the “establishment”), registration number 153973, as a gaming supplier in the class of lottery retailer, on the basis that it is not entitled to registration under section 10 of the Gaming Control Act, 1992 (“GCA”), was held on April 27, 2010 in the City of Toronto.
After considering all the evidence and submissions, the Board FINDS the Registrant is not entitled to registration under section 10 of the GCA, and ORDERS that the registration of MIN YAO HE and XIAO YAN HE, operating as LAMBTON DAILY MART be REVOKED.
Preliminary Matters
Ms Kwan Lee Chan was sworn in as interpreter for Mr. Min Yao He and Mrs. Xiao Yan He.
The Registrar’s Representative, Ms Sujin Chan provided the Board with a copy of their decision dated January 29, 2010 emanating from a hearing held on January 12, 2010 into an Order of Immediate Suspension (“OIS”) dated December 4, 2009, file number 165369, to suspend the registration of the Registrant. The decision was entered as Exhibit # 1 on consent. Ms Chan stated the Registrar would be relying on the evidence that was contained in the decision.
Ms Chan advised the Board that she wished to amend the NOPO, specifically paragraph 13, which stated the Deputy Registrar believes that the Registrant is not entitled to registration “as there are reasonable grounds to conclude that it’s Director will not act as a gaming supplier in accordance with law, with honesty, integrity or in the public interest as evidenced by the underlying conduct related to the aforementioned criminal charges and the repetitive nature of criminal conduct and the failure to comply with the Terms of the Registration”. Ms Chan stated she would not be relying on the failure to comply with the Terms of the Registration and that she would like to delete reference to compliance with the Terms of the Registration under paragraph 13. The Registrant had no objections to the proposed amendment, and the Board therefore approved the amendment on consent.
Mr. Lee advised that Mr. He and Mrs. He could not be in the hearing room at the same time due to child care issues.
Registrar’s Evidence
Mr. Frank Cuda has been the Deputy Registrar under the GCA for ten years. As Deputy Registrar, he is responsible for making registration suitability decisions.
His concerns relating to Mr. He’s suitability for registration relate to the fact that Mr. He committed the same offences of possession of property obtained by crime under $5,000 and fraud under $5,000 twice within a four month period.
It was clear in the Board’s decision (Exhibit # 1) that Mr. He was not forthright when he stated he didn’t sell DVDs after June 2009.
Detective Constable (“DC”) Rennie testified he attended the premises to check on a compliance issue under the Smoke Free Ontario Act. He would not have noticed the DVDs unless they were in plain view on the counter.
Mr. Cuda questioned Mr. He’s ability to conduct himself with honesty and integrity, in accordance with the law and in the public interest, due to the fact he committed the same offence twice in four months at the same location. Mr. He pled guilty on September 30, 2009 in relation to the first offence and was charged with the same offence less than a week later on October 2, 2009.
A further suspension would not alleviate Mr. Cuda’s concerns. Mr. He was offered Terms of Registration which Mr. He accepted after the first offence and he was charged with the second offence less than a week after signing the Terms of Registration. It is clear that Mr. He cannot conduct himself with honesty and integrity.
Mr. Cuda is concerned with the Registrant as a whole entity. Mr. He and Mrs. He applied as partners and are registered as such. One cannot be severed from the other as they become a new entity and would have to apply as a new registrant and go through the application process.
On cross-examination, he stated he believed Mr. He received a conditional discharge for both convictions. Mr. Cuda was not aware that the Crown agreed to the second conditional discharge as it considered the second offence to be part of the first offence. Mr. Cuda stated he was not aware that a conditional discharge was not considered a criminal conviction.
Mr. Cuda believes the charges against Mrs. He were withdrawn. He does not believe Mrs. He was charged in relation to the second incident.
DC Rennie did not see Mr. He sell any of the DVDs, but they were on the counter in plain view.
Mr. Cuda does not always request a licence revocation if someone is convicted of two offences. The decision depends on the situation and any pattern that is involved.
Mr. Cuda does not consider the economic impact of a revocation. His role is to consider the public interest and to be satisfied that a registrant will act in accordance with the law and with honesty and integrity.
Registrant’s Evidence
Min Yao He stated he pled guilty twice to possession of property obtained by crime under $5,000 as a result of the two incidents.
Mr. He stated he explained at the previous hearing that he didn’t know how to handle the DVDs that were left in the store and that is why he was charged a second time. He got rid of every DVD in the store after he was charged the second time. There are no DVDs, counterfeit or legitimate, in his store on today’s date. He will never be charged for the same offence again. He understands the Registrar’s concerns. He will be very careful from now on and has learned his lesson.
His wife, Xiao Yan He, helps out in the store. She was in China when he first started to sell DVDs. She was charged as she came into the store when the police were there on the first occasion. She was only charged because Mr. He and his wife are partners. Her charges were withdrawn.
His wife is able to operate the store by herself.
On cross-examination, he stated his wife can look after the store by herself. He stated he was always in the Toronto area when his wife ran the store.
Xiao Yan He is married to Min Yao He. She owns the store with her husband and helps him run it at lunchtime.
She was in China when her husband started to sell the DVDs. They stopped selling DVDs after her husband was arrested the first time. She was charged for the first incident but the charges were withdrawn as she was not involved.
She continues to help her husband run the store. She can manage the store without him. She would be able to look after the store by herself and her husband could look after their child.
Their registration to sell lottery tickets was suspended. All of their customers complain that they are unable to buy lottery tickets in their store. They have customers who come in and say they will never return because they cannot buy lottery tickets.
Lottery tickets were a major part of the store’s revenue. They purchased the store for $520,000. They are unable to sell the business because of the lottery ticket licence suspension. They are in debt and can’t repay a good portion of it because of the decrease in revenue. They are having a hard time surviving.
They have learned a lesson. They will do a much better job in the future. Her husband will obey the law from now on. She doesn’t believe that her husband realized it was against the law to sell the DVDs.
On cross-examination, she stated she has run the store for a few hours a day. Her husband has always been in Toronto when she runs the store. She looks after their home and their child when she is not in helping in the store.
Her husband completed her registration form when she applied to be a registrant.
Registrar’s Submissions
The Registrar’s concerns centre on the repetitive criminal conduct of Mr. He.
The Board upheld the OIS. The Board was concerned the Registrant would not act in accordance with the law and act with honesty and integrity. Those concerns were highlighted in paragraphs 97, 100 and 101 of the Board’s decision (Exhibit # 1).
Mr. He was charged twice in September and December of 2009 and was found guilty of possession of property obtained by crime under $5,000 in regards to both incidents. The Board, in its decision, noted Mr. He did not learn his lesson.
The Deputy Registrar gave the Registrant a second chance after the first incident by imposing terms and conditions instead of a NOPO.
The Board, in its decision, did not find Mr. He to be entirely forthright. The Board found his criminal conduct to be both serious and repetitive and upheld the OIS.
Both Mr. and Mrs. He had nothing concrete to offer when they were asked about any measures they had taken to prevent criminal activity.
The standards are very high for gaming registrants and Mr. He’s conduct falls very short of the standard. It should be noted only four months have passed since his last conviction.
The matter must be examined in its entirety. Mr. and Mrs. He share a partnership and as such they both share responsibility.
The Board should find that the Registrant cannot act in accordance with the law, with honesty, integrity or in the public interest and revoke their registration.
Registrant’s Submissions
One cannot overemphasize the difference between a suspension and revocation. A suspension is a kind of penalty which alerts and disciplines the registrant. It also affords the registrant an opportunity to correct conduct. A revocation on the other hand is akin to a death penalty.
Both Mr. and Mrs. He testified to the serious financial ramifications that the suspension had on their business. Customers come into the store and don’t return because of the lack of lottery sales. This has an impact on all sales. They invested over $500,000 in their business, most of which was borrowed, and they are now deeply in debt and have serious financial difficulties.
They have learned their lesson and now manage their business in accordance with all laws and regulations. This fact was unchallenged by the Registrar.
The Board should consider the outcome of the criminal proceedings. Normally one does not receive two conditional discharges. The court realized in the case of Mr. He that both occurrences were very close to being a single incident. It should be noted that a conditional discharge is not a conviction and does not constitute a criminal record.
If the Board cannot see past their concerns surrounding Mr. He, then the Board should let Mrs. He manage the store. She was not involved with the DVDs. There were no concerns raised over Mrs. He’s ability to conduct herself with honesty and integrity, in accordance with the law and in the public interest.
It should be noted that Mr. Cuda testified that the Registrar does not always revoke a licence as the result of two criminal convictions. The criminal court gave Mr. He a second chance and the Board should do the same.
Reply Submissions
Criminal standards and administrative standards are different and no parallel should be drawn between the two.
The Board’s task is to regulate the gaming industry in accordance with honesty and integrity and to discipline or revoke when appropriate.
The Registrant’s financial difficulties are unfortunate but the Board cannot disregard questions of honesty and integrity. Public confidence in the gaming industry must be maintained.
Mrs. He testified she can run the business but has only done so for a few hours a day and only when her husband is in the city. Procedurally she will have to submit a new application if she wishes to operate the business by herself.
The Board should revoke the Registrant’s registration as a gaming supplier.
Reasons and Analysis
The Board has carefully considered all the evidence and the submissions presented.
The Board must decide whether the Registrant will act as a gaming supplier in accordance with law, with honesty, integrity or in the public interest.
The Board is sympathetic to the challenges posed by the current economic environment. However, a suspension at any time has financial ramifications for a licensee, which is part and parcel of the deterrent effect. Financial considerations cannot override the Board’s role in ensuring that gaming suppliers act in accordance with the law, with honesty, integrity or in the public interest.
As noted in the Board’s decision on the OIS (exhibit # 1), Mr. He pled guilty twice to possession of DVDs obtained through crime, in contravention of Section 355 of the Criminal Code, in a period of four months, most recently, in October 2009. The criminal conduct was both serious and very recent. The decision, in paragraph 97 to 99, stated:
The fact that Mr. He committed that same offence twice in a period of four months indicates that he did not learn a lesson and correct his conduct after he pled guilty the first time. The Board did not accept, as an excuse for breaking the law the second time, Mr. He’s evidence that he did not dispose of the pirated DVDs because he was afraid of the DVD supplier. There were other options open to Mr. He which would not have involved breaking the law, such as refusing to accept delivery of the DVDs or involving the police. The Board also considered, in deciding whether to uphold the OIS, the fact that the criminal conduct, on both occasions, occurred at the same premises to which the lottery retailer registration applies. Mr. He has testified that he has learned from his mistakes and will not make the same mistakes in the future. However sincere Mr. He’s future intentions may be, they cannot override his recent, repetitive criminal conduct.
The Board also found that Mr. He was not entirely forthright at the hearing of January 12, 2010, as explained in the January 29, 2010 decision.
The public puts a great deal of trust in lottery retailers who are spread out over thousands of retail outlets throughout the province. The gaming industry is rife with opportunities for registrants to take advantage of the public. It is not possible for regulators and enforcement personnel to monitor all transactions. As a result, it is necessary that registrants be held to very high standards. Public confidence demands nothing less.
The Board is tasked with deciding whether to revoke the registration of Min Yao He and Xiao Yan He operating as Lambton Daily Mart. The Board cannot sever the business partnership of Mr. and Mrs. He and must deal with the entity as it currently exists. Mr. He’s serious, repetitive and recent criminal conduct gives the Board reasonable grounds to believe that he will not act as a gaming supplier in accordance with the law, with honesty, integrity or in the public interest. The Board acknowledges Mr. He’s assertion that he has learned from his mistakes and that he will not repeat them. However, the test under subsection 10(b) of the GCA is whether, having regard to the past conduct of the applicant or registrant, there are reasonable grounds to believe that the applicant or registrant will not act as a supplier in accordance with the law, or with integrity, honesty or in the public interest. As such, Mr. He’s future intentions, however sincere they may be, have little relevance under subsection 10(b) and, in any case, cannot override his recent actions, while registered as a supplier in the class of lottery retailer.
The Board notes for the record that there were no concerns raised about Mrs. He’s honesty and integrity at the hearing. Ms Chan did raise the concern that Mrs. He lacks business experience, but this is not one of the criteria which the Registrar has the authority, under the legislation, to consider when determining suitability for registration. As such, although the Board cannot sever the existing business partnership, Mrs. He may apply for registration as a lottery retailer as a new entity. Her application, like all others, would then be subject to a due diligence suitability review by the Registrar.
Order
- For the above reasons, the Board FINDS the Registrant is not entitled to registration under section 10 of the Gaming Control Act and ORDERS that the registration of MIN YAO HE and XIAO YAN HE, operating as LAMBTON DAILY MART, 102 Lambton Avenue, Toronto, Ontario, M6N 2S9, registration number 153973 be REVOKED.
DATED AT TORONTO THIS 13^th^ DAY OF May , 2010
JACQUELINE CASTEL, BOARD MEMBER BRUCE S. MILLER, BOARD MEMBER