High-rolling slot machine gambler at centre of $1M fight between B.C. lottery and FINTRAC

OTTAWA — A single, high-rolling casino slots player is at the centre of a nasty $1 million fight between British Columbia’s gambling authority and the federal anti-money laundering watchdog, court documents allege.

Last month, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) issued a $1.075 million fine against the British Columbia Lottery Corporation (BCLC).

The bulk of the fine was for failing to submit two suspicious transaction reports relating to one “high-risk patron.” FINTRAC says there were reasonable grounds to suspect that money laundering or terrorist activity funding was at play in those transactions.

“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,” reads the violation notice published by FINTRAC .

The investigation into the “very serious” violation also found that BCLC failed to consider numerous “money laundering and terrorist financing indicators” that required the agency to flag the transactions to FINTRAC.

The fines come just three years after Commissioner Austin Cullen published a scathing report on money laundering in B.C . His public inquiry concluded that BCLC and law enforcement were aware of the growing problem of money laundering under their noses but failed to act for years.

“(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,” read the report.

But in a lawsuit filed last week, BCLC says FINTRAC conducted a botched investigation and is asking a Federal Court judge to quash the fine.

The lawsuit sheds light on growing tension between BCLC and the federal regulator that began when FINTRAC “ambushed” the provincial gambling corporation with the investigation into its anti-money laundering checks in late 2024, reads the document.

The lawsuit argues that the investigation was conducted unfairly, that FINTRAC ignored information provided by BCLC and the final decision failed to consider improvements the gambling agency made to its anti-money laundering program.

At the centre of the battle is the province’s biggest slot machine gambler, identified in court filings as BCLC’S “#1 High-Volume Encore Slot Patron.”

“The (FINTRAC) director relied on her subjective view, or the subjective view of the FINTRAC examination team, that the Patron was simply gambling too much,” reads BCLC’s lawsuit.

The lawsuit does not identify the patron, the source of their wealth nor how much they gamble. But the document says BCLC reported 541 “casino disbursement reports” of over $10,000 to the patron between March 1, 2017, and Feb. 28, 2018, suggesting a minimum payout of $5.41 million that year.

A FINTRAC report quoted in the lawsuit says the watchdog found the “high risk” patron uncooperative and accused the gambler of having provided “false, misleading, or incorrect information” namely about their occupation and property ownership.

But BCLC says it and the provincial gambling regulator both investigated the patron in 2024 and found “nothing unusual or suspicious” other than a frequent use of $100 bills to gamble.

“The (FINTRAC) Director failed to consider the Patron’s facility with the English language or the country from which the Patron emigrated to Canada/from which the Patron’s funds originate,” reads the lawsuit.

“(FINTRAC) failed to consider whether the perceived uncooperativeness and inconsistencies arose from linguistic and cultural differences.”

FINTRAC has not yet filed a reply to Federal Court. In a press release announcing the fine Thursday, FINTRAC Director and CEO Sarah Paquet said the watchdog is “firm in ensuring that businesses continue to their part” in fighting money laundering and terrorist financing.

The provincial agency also argued that the amount of money the gambler has bet is lower than FINTRAC claims because it doesn’t account for churn, or the amount of money bet that was obtained from previous gambling winnings.

BCLC says FINTRAC discounted its churn analysis of the patron as a mere “accounting exercise.”

“The Director also wrongly concluded that BCLC had not obtained information about the Patron’s sources of funds and wealth, and that BCLC imposed a ‘ban’ on the Patron when this was not the case,” reads the lawsuit.

BCLC also accused FINTRAC of failing to give it a reasonable amount of time to reply to its investigation 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 said in a statement Wednesday.

National Post

cnardi@postmedia.com

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