The British Columbia Lottery Corporation is challenging a federal penalty exceeding $1 million, claiming it was unfairly targeted in a money laundering investigation. The lottery corporation filed an appeal in Federal Court against the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) last week. It argues that it was penalized for three alleged violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act without proper notification.

In its appeal, the lottery corporation described the situation as an "ambush" by Fintrac, stating it was not given the opportunity to address misunderstandings regarding the casino and gaming industry. The corporation emphasized its commitment to complying with Canadian anti-money laundering laws, asserting that it has met all legal and regulatory obligations.

The appeal highlights a specific case involving an unnamed casino patron, identified as the highest-volume slot machine player in the lottery corporation's rewards program. This patron was flagged for frequently using $100 bills. The lottery corporation contends that Fintrac's conclusion that the patron was "gambling too much" was based on an irrelevant factor. The appeal states, "The amount gambled, in and of itself, is not a relevant factor in Fintrac’s money laundering and terrorist financing indicators."

The lottery corporation also claims that Fintrac incorrectly determined that a suspicious transaction report should have been filed based on the patron's behavior and responses during interviews. It argues that Fintrac did not take into account the patron's English language proficiency or their country of origin, although the appeal does not specify these details.

Fintrac had found the patron uncooperative and accused them of providing false or misleading information regarding their occupation and property ownership. The lottery corporation argues that the regulator failed to consider whether the perceived uncooperativeness stemmed from linguistic and cultural differences.

In March, the B.C. Lottery Corporation was issued $1,075,000 in administrative penalties for three alleged violations, which included failing to report suspicious transactions and not maintaining up-to-date compliance policies. The appeal, dated August 20, seeks to overturn the penalties or have them reduced or reconsidered by Fintrac's director. Fintrac has stated it will respond to written inquiries regarding the case.