Atlantic Lottery Corporation Inc. has been hit with a C$212,025 administrative monetary penalty by Canada’s anti-money-laundering watchdog after a compliance review found failures in its controls.
According to FINTRAC’s release, the penalty was imposed on 29 May for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the associated regulations. The agency classified one breach as very serious and the other two as serious.
The most serious failure was the company’s decision not to file a suspicious transaction report when there were reasonable grounds to suspect the activity was tied to money laundering or terrorist financing. FINTRAC said the transactions involved unusual rapid transfers, a client who avoided contact with employees and unexplained sources of funds.
The regulator also found weaknesses in Atlantic Lottery’s compliance policies and procedures, including client identity verification practices and reporting processes. It said the company’s overall assessment of money-laundering risk was missing key elements and did not necessarily consider all of the required factors.
Atlantic Lottery Corporation, which also operates as Atlantic Lottery, is a casino-sector company headquartered in Moncton, New Brunswick. It is jointly owned by the governments of Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island.
In announcing the penalty, FINTRAC said Canada’s anti-money-laundering and anti-terrorist-financing regime is meant to protect Canadians, businesses and the integrity of the financial system. The agency added that the obligations are designed to deter criminals and terrorists from operating in the legitimate economy and to ensure it receives reporting that can support law-enforcement and national-security investigations.
FINTRAC has also been publishing wider guidance on gambling-related risk. In a special bulletin on laundering the proceeds of crime through online gambling sites, it said the purpose was to help identify and assess money-laundering and terrorist-financing risks, apply controls to mitigate them, and detect and report suspicious transactions.
The bulletin said reporting entities need only reasonable grounds to suspect before filing a suspicious transaction report, and that proof of money laundering is not required. It also said indicators are red flags drawn from a mix of characteristics, behaviours, patterns and contextual factors, and should not be treated in isolation.
The same bulletin said Project Dolus targets the laundering of criminal proceeds through online gambling sites, and that Canada’s March 2023 updated risk assessment raised the threat from unlicensed gambling, including online gambling, from high to very high.
FINTRAC said the penalty has been paid and the case is considered closed.
