BC Lottery Corp. says it was ‘ambushed’ by Fintrac in money laundering investigation

VANCOUVER – The British Columbia Lottery Corp. is taking the federal government to court, claiming it was wrongly penalized more than $1 million for anti-money laundering and terrorist financing violations earlier this year by a federal financial watchdog. 

The lottery corporation filed a notice of appeal last week in Federal Court against Fintrac for allegedly wrongfully penalizing the Crown corporation for three alleged violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

The lottery corporation claims it wasn’t properly notified it was under examination, and was instead “ambushed” by the anti-money laundering regulator without a chance “to correct Fintrac’s misunderstandings and misapprehensions” about the casino and gaming industry.

The lottery corporation said in a statement Wednesday that it “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 appeal says Fintrac zeroed in on one unnamed casino patron who had been identified as the highest-volume slot machine player in the corporation’s rewards program, and was flagged for “their frequent use of $100 bills.” 

It says Fintrac officials relied on an “irrelevant factor,” by subjectively concluding that “the patron was simply gambling too much.” 

“The amount gambled, in and of itself, is not a relevant factor in Fintrac’s money laundering and terrorist financing indicators,” the appeal says, without saying how much money the player gambled.

“The director’s reasoning reflects a moral or value-based judgment rather than an objective application of the regulatory framework.”

The lottery corporation further alleges that the regulator wrongfully concluded that a suspicious transaction report over potential money laundering should’ve been filed due to the patron’s “behaviour and responses to interview questions.” 

The lottery corporation alleges Fintrac failed to consider the patron’s English language skills or the country from which they emigrated, but the document does not specify where they’re from or what language they speak. 

Fintrac found the patron was unco-operative and provided false, misleading, or incorrect information about their occupation and their ownership of property. 

The BC Lottery Corp. says in it appeal that the regulator “failed to consider whether the perceived uncooperativeness and inconsistencies arose from linguistic and cultural differences.” 

The lottery corporation was issued $1,075,000 in administrative penalties in March for three alleged violations, including failing to report suspicious transactions, failing to keep up-to-date compliance policies and failing to take “special measures” related to the “high risk” patron. 

The appeal dated Aug. 20 says the BC Lottery Corp. is seeking to set aside the penalties or have them reduced or sent back to the director of Fintrac for reconsideration. 

Fintrac said it would respond to written questions.

This report by The Canadian Press was first published Aug. 27, 2025.