OTTAWA — A dispute involving a high-stakes slot machine player has escalated into a $1 million conflict between British Columbia’s gambling authority and Canada’s anti-money laundering agency. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently imposed a fine of $1.075 million on the British Columbia Lottery Corporation (BCLC) for failing to report suspicious transactions related to a so-called “high-risk patron.”

FINTRAC claims there were reasonable grounds to suspect that money laundering or funding for terrorist activities was involved in these transactions. The agency's violation notice stated, “Due to the patron’s rate of play and the volume of funds, along with other factors, British Columbia Lottery Corporation should have identified the patron as high-risk and should have applied prescribed special measures.”

The investigation revealed that BCLC did not adequately consider various indicators of money laundering and terrorist financing, which should have prompted them to alert FINTRAC. This fine comes three years after a critical report by Commissioner Austin Cullen highlighted systemic issues with money laundering in British Columbia’s casinos. The inquiry found that BCLC and law enforcement were aware of the growing problem but failed to take action. The report stated, “(BCLC managers) stood by and permitted BC casinos to accept vast sums of illicit cash. BCLC’s approach reflected a completely unacceptable and unreasonable risk tolerance.”

In response to the fine, BCLC filed a lawsuit last week, claiming that FINTRAC conducted a flawed investigation. The lawsuit seeks to have the fine overturned, citing a lack of fairness in the investigation process. According to BCLC, the tension between the provincial gambling authority and FINTRAC intensified when the latter initiated an investigation into BCLC’s anti-money laundering practices in late 2024.

BCLC argues that the investigation overlooked critical information and failed to acknowledge improvements made to its anti-money laundering program. Central to the case is the identity of the province’s largest slot machine gambler, referred to in court documents as BCLC’s “#1 High-Volume Encore Slot Patron.”

The lawsuit claims that the FINTRAC director relied on subjective assessments, suggesting that the patron was simply gambling excessively. While the lawsuit does not disclose the patron's identity or the source of their wealth, it notes that BCLC reported 541 disbursement reports exceeding $10,000 to this patron between March 1, 2017, and February 28, 2018, indicating a minimum payout of $5.41 million that year.

A report from FINTRAC, cited in the lawsuit, described the patron as uncooperative and accused them of providing “false, misleading, or incorrect information” regarding their occupation and property ownership. However, BCLC contends that both it and the provincial gambling regulator investigated the patron in 2024 and found no unusual or suspicious activity, aside from the frequent use of $100 bills for gambling.

The lawsuit further argues that FINTRAC failed to consider the patron's language proficiency and cultural background, which may have contributed to perceived uncooperativeness. As of now, FINTRAC has not responded to the lawsuit in Federal Court.

In a press release announcing the fine, FINTRAC Director and CEO Sarah Paquet emphasized the agency's commitment to ensuring that businesses fulfill their responsibilities in combating money laundering and terrorist financing. BCLC contends that the amount wagered by the patron is less than what FINTRAC claims, as it does not account for churn, or the money wagered that was derived from previous winnings.

BCLC also criticized FINTRAC for concluding that it had not gathered sufficient information about the patron’s financial sources and for incorrectly stating that BCLC had imposed a ban on the patron. Additionally, BCLC accused FINTRAC of not allowing adequate time for a response before issuing the fine.

“BCLC takes its responsibilities under Canadian anti-money laundering legislation very seriously. It is confident in its position that it has fully complied with all its legal and regulatory obligations,” the agency stated.