Canada’s money-laundering watchdog has intensified its crackdown on casinos, fuelling mounting frustration in the industry over its more aggressive approach than in the past.

Canadian Gaming Association CEO Paul Burns said two recent penalties against the British Columbia Lottery Corporation (BCLC) and the CNE Casino show the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) is taking a harder line against the gambling industry. Burns said Fintrac is levying heavy penalties for alleged administrative failures, or what he called “tick-the-box compliance.”

Both the BCLC and the CNE Casino have appealed the penalties. Burns said he expects more appeals will be filed soon by other gambling authorities Fintrac has sanctioned.

“Everything is resulting in fines… and it sounds like they’re more interested in raising money than understanding the compliance outcomes,” Burns said. “There’s a high level of frustration from our industry after this round of audits.”

In an email, Fintrac spokesperson Erica Constant confirmed the agency increased its scrutiny of casinos over the past year because the sector is “highly vulnerable to money laundering and terrorist financing threats.” Fintrac “broadened the scope and depth” of its overall enforcement activities in 2024 and 2025, increasing the number of assessments it conducted by 40 per cent and launching more than 50 investigations in the casino sector, she said.

Burns said Fintrac’s two fines totalling $199,000—just shy of the maximum—against the CNE Casino are “a reflection of an agency that’s lost its way.” The CNE Casino operates seasonally during Toronto’s annual Canadian National Exhibition, limits bets to $300 and donates its proceeds to charity. In its appeal last month, the organization said it was unclear how Fintrac determined its procedures were outdated or non-compliant, adding it presented the regulator with substantial evidence to the contrary.

The CNE Casino admitted to not conducting a two-year effectiveness review in a questionnaire—because it conducts one annually instead, after each season. “These effectiveness reviews may not take on the form Fintrac prefers, but the regulatory obligation is one of substance, not of form,” the organization said in the appeal.

The BCLC filed its appeal a week after the CNE Casino did, alleging the regulator never told the organization it was under investigation before it was “ambushed” in a December meeting where it was notified of the probe’s findings. Fintrac fined the BCLC just over $1 million for three alleged legal violations tied to reporting and oversight failures in its review of a single high-volume slots player.

The BCLC declined to comment and the CNE Casino did not respond to a request for comment. Fintrac has not yet filed a response to the two organizations’ notices of appeal, which have not been proven in court.

Constant said she could not comment directly on the two cases because they’re before the courts. Fintrac “is taking decisive, risk-informed actions to ensure that businesses… meet their compliance obligations,” she said.

Speaking at a Toronto gambling industry conference in June, lawyer Scott Hutchison—who represented the CNE Casino in its appeal—said Fintrac is currently under pressure to demonstrate it’s cracking down on money laundering.

The Financial Action Task Force (FATF) will conduct a high-stakes audit of Canada’s effectiveness in tackling money laundering and terrorist financing this fall, while Ottawa is proposing to increase the fines companies face for money-laundering oversight failures amid pressure from the U.S. to beef up border security. It comes amid a series of high-profile scandals, including TD Bank’s US$3-billion penalty last October for failing to prevent money laundering by drug cartels and a 2024 cyberattack that took down Fintrac’s system for reporting suspicious transactions for months—including those filed by Ontario’s online casinos.

“Fintrac started to perceive itself as a bit of a toothless tiger, and they’ve decided to flex the legal muscle that they have,” Hutchison said on the panel. He did not respond to a request for comment. 

Asked to what degree the FATF review or pressure from the U.S. are influencing its enforcement decisions, Constant responded “None.”

“Fintrac is focused on fulfilling its core mandate, which includes delivering a comprehensive, risk-based supervision program to ensure that businesses fulfill their obligations,” she said.

The Canadian Gaming Association met with Department of Finance officials in July to present a series of proposals for making money-laundering oversight of casinos more effective, said Burns. He said many regulations were made with banks, rather than casinos, in mind, creating a lot of paperwork—and opportunities to run afoul of Fintrac’s requirements—for little actionable intelligence.

“We want to make sure that we have a regime that’s tailored to what our industry is,” he said. “And then produce the most effective information for law enforcement authorities to act.”