The British Columbia Lottery Corporation (BCLC) is pushing back against federal regulators, taking the unusual step of filing an appeal in Federal Court after being hit with more than $1 million in penalties related to alleged anti-money laundering violations.
“Ambushed” Into the AML Investigation
The Crown-owned gambling operator behind PlayNow argues that Canada’s financial intelligence watchdog, the Financial Transactions and Reports Analysis Centre (FINTRAC), unfairly sanctioned it earlier this year under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
In its notice of appeal, filed on August 20, the corporation claims it was never properly informed that it was being reviewed and that it was instead “ambushed” without the chance to “correct FINTRAC’s misunderstandings and misapprehensions” regarding the gaming industry.
In a statement released Wednesday, the corporation reiterated its seriousness when it comes to complying with Canada’s AML legislation.
The Controversial Top Player Situation
At the centre of the dispute is a high-volume casino patron who drew FINTRAC’s attention. The individual, described as the top slot machine player in the corporation’s rewards program, was flagged for frequent use of $100 bills.
BCLC’s appeal argues that regulators placed too much weight on the amount that the top player wagered, saying FINTRAC improperly judged that “the patron was simply gambling too much.”
BCLC disagrees with the conclusion, saying the amount that the player gambled, “in and of itself, is not a relevant factor in FINTRAC’s money laundering and terrorist financing indicators” and that “the director’s reasoning reflects a moral or value-based judgment rather than an objective application of the regulatory framework.”
The corporation also takes issue with FINTRAC’s view that a suspicious transaction report should have been filed based on the player’s conduct and responses during questioning.
BCLC suggests the watchdog didn’t take into account the possibility that cultural or language barriers may have influenced the interaction, saying the regulator “failed to consider whether the perceived uncooperativeness and inconsistencies arose” from these obstacles.
In March, FINTRAC levied administrative penalties totaling $1,075,000 against BCLC for three alleged violations, including not reporting suspicious activity, failing to maintain current compliance policies, and not taking “special measures” in relation to the high-risk patron.
Through its appeal, BCLC wants the court to overturn or reduce the size of the penalties, or to send the matter back to FINTRAC’s director, where it would be reviewed for a second time.