Licence Appeal Tribunal
Safety, Licensing Appeals and Standards Tribunals Ontario
Tribunal d’appel en matière de permis Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario
Appeal under the Gaming Control Act, 1992, S.O. 1992, c. 24 from a Notice of Proposed Order to Revoke Registration issued by the Deputy Registrar of Alcohol, Gaming and Racing
Between:
Cuong Vuong o/a TD Convenience
Appellant
-and-
Registrar of Alcohol, Gaming and Racing
Respondent
DECISION AND ORDER
Adjudicator: Mary Ann Spencer, Member
Appearances:
For the Appellant: Self-represented
For the Respondent: Aviva Harari, Counsel
Place and date of hearing:
Toronto, Ontario, January 8, 2018
REASONS FOR DECISION AND ORDER
A. Overview
1This is a hearing before the Licence Appeal Tribunal of an appeal by Cuong Vuong o/a TD Convenience of a Proposed Order to Revoke Registration issued by the Deputy Registrar of Alcohol, Gaming and Racing on August 18, 2017. The Deputy Registrar also issued an Order of Immediate Suspension of Mr. Vuong’s registration on August 18, 2017. Mr. Vuong did not appeal the Order of Immediate Suspension.
2The Deputy Registrar proposes to revoke Mr. Vuong’s registration as a gaming supplier in the class of Seller on the basis that there are reasonable grounds to believe that he will not act in accordance with law, or with integrity, honesty or in the public interest.
3The Deputy Registrar alleges that Mr. Vuong allowed illegal gambling at his convenience store and received payment for doing so. On July 18, 2017 and July 31, 2017, inspectors with the Alcohol and Gaming Commission of Ontario (“AGCO”) found electronic devices on the premises of TD Convenience which they determined were being used to play an illegal lottery scheme. Further, when the AGCO conducted an inspection on January 5, 2018, the electronic devices were still on the premises.
4Mr. Vuong does not dispute that he permitted operation of the lottery scheme on his premises or that he was paid to do so. His position is that once the Order of Immediate Suspension was issued, he no longer permitted operation of the lottery scheme. The electronic devices are still on his premises because they have yet to be picked up by the individual who supplied them. Mr. Vuong needs to be able to sell Ontario Lottery and Gaming Corporation (“OLG”) lottery tickets to attract customers to his convenience store.
5For the reasons set out below, I confirm the Deputy Registrar’s Proposed Order to revoke Mr. Vuong’s registration.
B. ISSUES
6The issue to be considered in this appeal is:
(a) whether the past conduct of appellant provides reason to believe that he will not act a gaming supplier in the class of seller in accordance with law, or with integrity, honesty, or in the public interest.
7If I find that there is reason to believe that the appellant will not act as a gaming supplier in accordance with law, or with integrity, honesty, or in the public interest, then I must determine the appropriate action to direct the Registrar to take.
C. LAW
8Section 12 of the Gaming Control Act states that the Registrar may propose to revoke a registration for any reason that would disentitle the registrant to registration under section 10 if the registrant were an applicant.
9Section 10(b) of the Act states that a registration may be refused if the past conduct of the applicant provides reasonable grounds to believe that the applicant will not act as a supplier in accordance with law, or with integrity, honesty, or in the public interest.
10Section 13(8) of the Act provides that the Tribunal may confirm or set aside the proposed order of the Registrar. The Tribunal may also substitute its opinion for that of the Registrar and may attach terms to its order or to the registration.
D. EVIDENCE
Registration Requirements
11Frank Cuda has been the Manager of Gaming Eligibility at the AGCO since 1999. Mr. Cuda testified that in order to sell lottery tickets in Ontario, individuals or corporations must be registered with the AGCO. Mr. Vuong was registered by the AGCO as a gaming supplier in the class of Seller on November 17, 2016.
12Mr. Cuda testified that the Act is consumer protection legislation. The gaming industry is cash-intensive and standards for participants must be high. He testified that registrants must be “beyond reproach”. Applicants for registration must sign a Retailer Agreement with the OLG which supplies lottery terminals and tickets. One of the terms of that agreement is that the registrant may sell only authorized products.
13Mr. Cuda explained that with authorized gaming, there is accountability. The proceeds of the sale of lottery tickets go to the province of Ontario for the benefit of its citizens. When an individual participates in unauthorized gaming, there is no such accountability.
Notice of Immediate Suspension and Notice of Proposed Order to Revoke Registration
14Mr. Cuda testified that after an inspection by AGCO inspectors on July 18, 2017, Mr. Vuong was advised to remove electronic devices which had been found on his premises and had been determined to be being used by customers to play an unauthorized lottery. The machines were still in place when a second inspection was conducted on July 31, 2017. Therefore, on August 18, 2017, the Registrar issued an Order of Immediate Suspension and the Notice of Proposed Order to Revoke Mr. Vuong’s registration. Mr. Cuda also noted that in allowing the unauthorized lottery to be played on his premises, Mr. Vuong had breached the Retailer Agreement he had signed with the OLG.
The July 18, 2017 Inspection
15Kevin Pierobon has been an inspector with the AGCO for approximately 2.5 years. One of his responsibilities is to inspect registrants’ premises to ensure they are complying with the requirements of the Act and regulations.
16Inspector Pierobon testified that he inspected TD Convenience on July 18, 2017. When he arrived, he saw a customer playing on a tablet computer. A second tablet computer with a large number taped on it was also visible. He also found 8 tablet computers on an open shelf under the store’s main service counter, each of which had a large number taped to it. There was also a number of Canadian currency bills, in various denominations, sitting on an open shelf under the counter.
17Inspector Pierobon testified that Mr. Vuong was not at TD Convenience when he arrived for his inspection. Therefore, he spoke to employee H.T. who advised him that the tablet devices were connected to Vietnam and were used by customers who picked numbers and paid for a ticket. If their numbers won, the customers were paid by the store’s owner in the evenings. Inspector Pierobon asked H.T. to demonstrate how to use the tablet devices but H.T. stated he did not know how. H.T. explained that the currency was used for the store’s Moneygram machine and was kept in the open for convenience.
18Inspector Pierobon left the store and returned approximately an hour later. Mr. Vuong was present. Mr. Vuong explained that the machines were used by customers to pick numbers in various games, similar to Lotto 6/49. They then paid at the store’s main counter and were issued a receipt. When asked who provided winnings, Mr. Vuong stated that he did and that many people came to the store to pick up their share.
19Inspector Pierobon testified that Mr. Vuong told him he had received the machines approximately two to three months earlier. However, Mr. Vuong could not tell the inspector who owned them. He advised the inspector that he received between $300 and $400 monthly to have the machines on his premises.
20Inspector Pierobon asked Mr. Vuong how the games worked. H.T. input a code into the tablet to access the program. Mr. Vuong then explained that customers could play multiple games. Inspector Pierobon took photographs of the various screens displayed on the tablet.
21On July 19, 2017, Inspector Pierobon called Mr. Vuong and advised him that he was permitting illegal gambling and that he had submitted a report which indicated that Mr. Vuong was not complying with the Act and regulations. He advised Mr. Vuong that he would be contacted by the AGCO’s legal department.
The July 31, 2017 Inspection
22Ka Ng has been an inspector with the AGCO since 1994. On July 31, 2017, he and Inspector Trevor Joseph conducted an inspection at TD Convenience to determine if the devices used for the illegal gaming had been removed.
23Inspector Ng testified that he found two tablet computers charging behind the store’s main service counter. Employee H.T. confirmed that they were used for gaming and said the game was called “Back Home”. H.T. turned on one of the tablets and entered a PIN code. The screen then displayed a number of games which Inspector Ng testified appeared similar to Lotto 6/49 and Lotto Max. H.T. showed him the screen on which a customer picked numbers and explained that a customer would be paid after the numbers were confirmed. Inspector Ng asked H.T. what the biggest win he had seen was and H.T. stated it was $10.00. However, H.T. then stated he did not want to get into trouble and the inspectors should speak to Mr. Vuong who he telephoned. Mr. Vuong arrived approximately 30 minutes after the inspection had begun.
24Inspector Ng testified that he asked Mr. Vuong to explain the games which were played on the tablets. Mr. Vuong signed in using a PIN code. He advised Inspector Ng that customers could bet any amount and paid at the store’s service counter where a receipt would be printed. Mr. Vuong created a $1.00 ticket and went to the counter and produced a receipt. When Inspector Ng asked Mr. Vuong how customers knew whether they had won, Mr. Vuong stated he did not know and advised that customers’ prizes were paid off site. Mr. Vuong indicated that he was paid $400 a month to keep the devices in his store. Inspector Ng then advised Mr. Vuong that the lottery game was illegal gambling and that he had to remove the devices from his premises.
25Inspector Trevor Joseph joined the AGCO on secondment in 2016. Inspector Joseph, who had been excluded from the hearing room while Inspector Ng testified, provided consistent testimony with respect to Mr. Vuong’s demonstration of the games on the system and production of a receipt. Inspector Joseph took photographs of the various screen displays and the receipt.
26Inspector Joseph confirmed that Inspector Ng advised Mr. Vuong that the games on the tablet were illegal. He testified that Mr. Vuong was of the opinion that he was not allowing gambling because prizes were not being paid on his premises. Inspector Joseph testified that Mr. Vuong stated that he did not know the tablet lottery was illegal and, after Inspector Ng again advised that it was, indicated he would remove the devices from his store.
The January 5, 2018 Inspection
27Inspector Pierobon testified that he inspected TD Convenience on January 5, 2018 and found that all of the devices he had seen at his July inspection were still on the premises at the front service counter.
The Characteristics of Illegal Gaming
28Sergeant John Custode is a gaming specialist with the Ontario Provincial Police. He provides training and investigative support to police officers and AGCO staff on the rules of play for approved casino games, “cheat at play” techniques and scams, and money laundering. Sergeant Custode was qualified as an expert with respect to law enforcement in the gaming industry and an expert able to identify the aspects of legal and illegal gaming.
29Sergeant Custode testified that it is an offence under section 206(1)(d) of the Criminal Code to conduct a lottery scheme. Sergeant Custode explained that a lottery has three elements; there must be an element of chance or mixed chance and skill; there must be consideration or payment; and, there must be a prize. Section 207 of the Code exempts lotteries conducted by the government of a province or by an organization authorized by the province. He stated that if a game is not authorized by the OLG and is played in Ontario, it is illegal.
30On August 18, 2017, after reviewing the inspection reports produced by Inspectors Pierobon and Ng and the photographs of the screens taken by Inspectors Pierobon and Joseph, Sergeant Custode prepared a report for the AGCO. He testified that his conclusion was that the game being played on the tablet devices at TD Convenience was an illegal lottery scheme. The three elements of a lottery were all present and the game was not one authorized by the OLG. He further testified that neither the size nor the location of the payment of a prize would change his opinion.
Testimony of Cuong Vuong
31Mr. Vuong testified that when he purchased TD Convenience, there was not a lot of customer traffic in the store. However, his costs were high. He stated that “everything is about expenses” and he stopped operating a walk-in cooler in his store in order to save money on his electricity bill. Approximately three or four months after he took over the business, a “guy stopped by” and asked to place the tablet devices in his store and told Mr. Vuong he would be paid $100 a week. Mr. Vuong agreed in order to earn the extra income. He testified that he thought it was “maybe okay”. Asked who had provided the devices, Mr. Vuong stated he did not know and has neither the individual’s name nor his contact number.
32Mr. Vuong testified that he received his last payment for the devices in August or September of 2017. He told his employees to stop allowing the use of the devices after his OLG lottery terminal was shut down on August 18, 2017. He told him to come and remove the devices “last month”. The “guy” has said he will come in to remove the machines and he does not know why they are still on his premises. Mr. Vuong explained that he operates another business and relies on his employees since he does not spend much time at TD Convenience.
E. SUBMISSIONS
33Ms. Harari submitted that the appellant’s registration should be revoked. Mr. Vuong allowed illegal gaming which is contrary to the public interest and stated that the Registrar was sufficiently concerned to issue an Order of Immediate Suspension on August 18, 2017. Even though Mr. Vuong then became aware that the devices were a significant problem, they were found to be on the premises of TD Convenience, in working order, on January 5, 2018. Mr. Vuong’s testimony that he does not know the identity of the individual who provided them or have a contact number for the individual is not credible.
34Mr. Vuong indicated he needs to be able to operate an OLG lottery terminal to attract customers to his convenience store.
F. ANALYSIS
35The first issue before me is whether or not Mr. Vuong’s past conduct provides reason to believe that he will not act as a gaming supplier in accordance with law or with integrity, honesty and in the public interest.
36I find that Mr. Vuong allowed illegal gaming to take place on his premises. The evidence is that in exchange for a weekly payment of $100, Mr. Vuong permitted devices to be placed in TD Convenience which were used by customers to play a lottery game. The devices were found and the game was demonstrated to AGCO inspectors on July 18 and 31, 2017. This evidence was not disputed. It is an offence under section 206(1)(d) of the Criminal Code to conduct a lottery scheme. I accept the evidence of expert witness Sergeant Custode who testified that the game being operated at TD Convenience was an illegal lottery.
37Further, as Mr. Cuda testified, illegal gaming is not in the public interest because it diverts funds from provincially sponsored lotteries which benefit the public. I note that Mr. Cuda’s evidence is that Mr. Vuong’s conduct also violated his Retailer Agreement with the OLG.
38Therefore, I find, based on his past conduct, that there is reason to believe Mr. Vuong will not act as a supplier in accordance with law, or with integrity, honesty or in the public interest. Having made this finding, I must decide what action to order the Registrar to take.
39Mr. Vuong testified that he thought it was “maybe okay” to allow the devices to be used on his premises when “a guy” asked to place them there. On July 18, 2017, Inspector Pierobon found the devices at TD Convenience. On July 19, 2017, Inspector Pierobon advised Mr. Vuong that the lottery scheme the devices were being used for was illegal.
40The evidence is that the devices were still on the premises when Inspectors Ng and Joseph conducted an inspection on July 31, 2017. On July 18, 2017, employee H.T. and Mr. Vuong both advised Inspector Pierobon that winnings were paid out to customers on the premises. At the July 31, 2017 inspection, Mr. Vuong indicated that he did not know how customers learned they had won or where prizes were paid. Inspector Joseph testified that Mr. Vuong believed that the devices were not a problem if winnings were paid off the premises. Even if Mr. Vuong did believe that this apparent change in the location of payout of winnings made the lottery scheme allowable, he was advised by the inspectors that it was illegal regardless of where the winnings were paid. However, on January 5, 2018, Inspector Pierobon found the devices were still on the premises.
41Mr. Vuong testified that he does not know why the devices have yet to be picked up. His explanation is that he does not know either the name of the individual who provided the devices or how to contact him. However, I find that it is not credible that someone would allow Mr. Vuong possession of equipment and ongoing access to a cash generating scheme without providing a means of contact. Mr. Vuong’s testimony raises questions as to whether this individual exists or whether Mr. Vuong himself is solely responsible for the lottery scheme operating at TD Convenience.
42At no point in this hearing did Mr. Vuong testify that he was not aware that the lottery scheme being played on the devices at TD Convenience was illegal. Even if he believed the scheme was legal, he failed to remove the devices after being told by Inspector Pierobon on July 19, 2017 and by Inspector Ng on July 31, 2017 that he was conducting illegal gaming. It was not until his OLG lottery terminal was shut down on August 18, 2017 that he allegedly told his employees to stop the use of the devices. However, the devices were still on the premises when Inspector Pierobon inspected on January 5, 2018.
G. CONCLUSION
43I have found that Mr. Vuong’s past conduct provides reason to believe that he will not act as a gaming supplier in accordance with law or with integrity, honesty and in the public interest. He allowed an illegal lottery scheme to be operated on his premises and he failed to remove the devices used to operate the scheme after twice being told to do so by AGCO inspectors. This pattern of past conduct indicates Mr. Vuong lacks respect for the law and for regulatory authority. He provided no evidence to support that his future conduct would differ. For these reasons, I find his registration should be revoked.
ORDER
44Pursuant to the authority set out in section 13(8) of the Act, I confirm the Proposed Order of the Deputy Registrar dated August 18, 2017 to revoke the registration of Cuong Vuong o/a TD Convenience as a gaming supplier in the class of Seller.
Mary Ann Spencer, Member
Released: January 22, 2018