In the past month, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued two significant enforcement actions against major players in the country’s gambling sector: the Canadian National Exhibition (CNE) Casino (under the Canadian National Exhibition Association) and the British Columbia Lottery Corporation (BCLC).
Together, the cases reflect a shift in FINTRAC’s enforcement posture and shine a spotlight on the growing compliance challenges facing casinos and lottery operators. They also come at a politically sensitive time, as Canada’s federal government has signalled sweeping reforms to strengthen AML oversight.
Background: FINTRAC’s Mandate & Public Enforcement
Established in 2000 under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (elegantly abbreviated as PCMLTFA), FINTRAC serves as Canada’s financial intelligence unit. It collects, analyzes, and discloses information about suspicious or large financial transactions, with a mandate to help detect and prevent both money laundering and terrorist financing.
Previously, enforcement actions were largely confidential. However, amendments introduced in 2019’s Bill C‑97 require FINTRAC to publicly name entities that receive administrative monetary penalties, unless the violations were voluntarily self‑disclosed before review. As a result of this change, enforcement now carries not only financial consequences but also reputational exposure.
That increased transparency is significant in the gaming sector, which has long been flagged as a higher‑risk environment for money laundering. Casinos and provincial lottery corporations, as reporting entities, are legally obligated to maintain compliance programs, assess client risk, and report suspicious transactions to FINTRAC. However, FINTRAC’s latest actions suggest that financial regulators believe even established operators are not meeting the bar.
The CNE Casino Case
In mid-August, it was announced that FINTRAC had levied a CAD $199,000 penalty against the CNE Casino, a seasonal, not‑for‑profit operation run by the Canadian National Exhibition Association in Toronto. The decision cited two administrative violations of the PCMLTFA, though the details of the violations were not disclosed in the public notice.
The CNE Casino has since filed an appeal with the Federal Court, contesting the penalty. In its public response, the Association emphasized its commitment to compliance and suggested the findings overstated the seriousness of the issues.
The CNE case is the first high‑profile instance of FINTRAC naming a not‑for‑profit casino operator under the 2019 disclosure rules. Even though the penalty amount is modest compared to penalties that have been levied against major financial institutions, the reputational impact of being publicly named could be far more costly.
The BCLC Case & Legal Challenge
Around a week later, the story broke that FINTRAC issued a much larger CAD $1.075 million penalty against the British Columbia Lottery Corporation (BCLC). The violations cited were:
Failure to report suspicious transactions
Failure to establish and implement AML policies and procedures for high‑risk clients
Failure to apply special measures for high‑risk clients
The case immediately attracted national headlines, not only because of the size of the penalty, but also because of BCLC’s response.
BCLC announced it was appealing the penalty in Federal Court, arguing that FINTRAC’s process was procedurally unfair. The corporation said it was “ambushed” during what it believed was a routine compliance exit meeting, leaving it without a proper chance to respond to FINTRAC’s findings.
Furthermore, FINTRAC’s examination appeared to focus on the activity of one casino patron, identified as the highest-volume slot machine user in BCLC’s rewards program, and who was flagged for “frequent use of $100 bills.” BCLC stressed in the filing that neither its own monitoring and examination policies nor those of its regulator, the Gaming Policy and Enforcement Branch (GPEB), “found [anything] unusual or suspicious about the patron’s activities that warranted further investigation.”
Importantly, BCLC emphasized that the penalty related to administrative compliance issues, not allegations of money laundering or criminal activity.
The outcome of this appeal could set an important precedent. If the Court rules in BCLC’s favour, it could constrain FINTRAC’s ability to levy penalties in the future. If it upholds the regulator’s approach, other provincial operators may face similar exposure to public sanctions and million‑dollar fines.
A Pattern of Stronger Enforcement
FINTRAC has been steadily ramping up enforcement over the past three years, with financial institutions among the first targets. In 2023, the Royal Bank of Canada (RBC) received a record CAD $7.5 million penalty for failures related to suspicious transaction reporting. That record was subsequently broken in 2024, when TD Bank was fined CAD $9.19 million for deficiencies in AML compliance programs.
These penalties also foreshadow potential changes from Bill C‑2, introduced in 2025, which would raise the maximum possible fines that FINTRAC can apply to CAD $4 million for individuals and CAD $20 million for entities.
Industry Perspective: Time to Modernize
While regulators emphasize enforcement, industry voices argue that Canada’s AML framework is struggling to keep pace with modern gambling realities.
In an interview with Canadian Gaming Business, Derek Ramm – a former FINTRAC officer and past Director of Anti‑Money Laundering for the Alcohol and Gaming Commission of Ontario – highlighted that some AML tools, such as the Casino Disbursement Report, were designed for an earlier era of land‑based casinos. These tools, he noted, are “increasingly ill‑suited to a world where online and hybrid gambling dominate,” creating compliance challenges and leaving gaps that could be exploited by bad actors.
Further, in a LinkedIn post, Ramm observed that Canada’s AML requirements are often misaligned with international best practices. He argued that reforms should focus on outcomes and effectiveness rather than box‑ticking exercises, warning that failure to modernize could leave Canada vulnerable.
Ramm’s perspective reflects a growing consensus within the industry that meaningful modernization is overdue. The current regulatory framework may inadvertently punish organizations for technical shortcomings while failing to address the most significant sources of financial crime risk.
Broader Implications
The CNE and BCLC penalties have implications that extend far beyond the immediate financial hit. They underscore three key dynamics shaping Canada’s gambling and financial compliance environment.
Reputational risk matters as much as financial cost. With FINTRAC now required to publish penalty decisions, the public reputational impact can surpass the monetary fine itself. For not‑for‑profit and provincial operators, public trust is crucial.
Provincial‑federal tensions are growing. BCLC’s appeal highlights friction between provincial regulators and federal authorities. The Federal Court’s decision could reset the balance of power by clarifying whether FINTRAC’s processes meet the standards of fairness expected in administrative law.
Regulatory modernization is essential. As Canada prepares for the FATF review, policymakers are under pressure to update outdated AML provisions. Industry leaders point to the need for flexible, technology‑enabled compliance obligations that reflect the realities of online gambling, while still meeting international expectations.
Conclusion
The recent enforcement actions against CNE Casino and BCLC signal that Canada’s AML landscape is shifting, with regulators adopting a more aggressive enforcement stance and the courts being asked to weigh in on how far that authority can extend.
At the same time, industry experts emphasize that Canada’s AML rules must evolve to address both new digital gambling models and sophisticated money laundering risks. Without reform, enforcement may continue to punish procedural gaps rather than targeting true threats.
The pressure is on for Canada to strike a balance between rigorous enforcement and modernized, effective regulation. How the CNE and BCLC cases unfold may offer the first glimpse into whether that balance can be achieved.
