VANCOUVER — Canada’s financial intelligence agency has hit the British Columbia Lottery Corporation with a $1.075-million penalty for failing to report suspicious transactions and monitor high-risk high-rollers — the first major suspected money-laundering case against the province’s casino arm since the Cullen Commission, whose more than 100 recommendations remain largely ignored by Premier David Eby’s government.

The case centers on BCLC’s failure to report suspicious cash transactions tied to a particular “high-risk” gambler, as well as its failure to maintain adequate compliance measures for such cases.

The provincial Crown corporation has appealed the decision in Federal Court, reportedly contending that Fintrac failed to consider whether the gambler’s “perceived uncooperativeness and inconsistencies arose from linguistic and cultural differences.”

This line of defense reflects a familiar refrain from the province’s casino administration: pushing back on audits and regulatory findings by pointing to cultural practices around gambling, especially large cash “buy-ins” by wealthy visitors from China.

The documents state that Fintrac examiners judged a patron to be evasive and at times dishonest, providing false or misleading information about their occupation and ownership of property.

Such gaps in vetting patrons echo a major vulnerability identified by the Cullen Commission.

But BCLC argues that in this case the perceived inconsistencies may have stemmed from language barriers and cultural context. The appeal reportedly specifies that the regulator neglected to take into account the patron’s English-language skills or the country from which they emigrated.

BCLC has a history of resisting anti-money-laundering enforcement. In 2010, it contested a $695,750 penalty, successfully securing its cancellation via a Federal Court consent order.

That judgment was followed by exponential increases in “Vancouver Model” laundering — which peaked with more than $1.2 billion in suspicious cash transactions in 2014, according to Commissioner Austin Cullen’s 2022 final report.

Fintrac’s July 17, 2025 decision cites three violations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. BCLC failed to submit two suspicious transaction reports despite “reasonable grounds to suspect” that a high-volume patron’s play was linked to money laundering or terrorist financing. Fintrac’s examiners noted gaps in the corporation’s enhanced due diligence reviews and identified multiple laundering indicators that were overlooked. The regulator also found that BCLC failed to keep its compliance policies up to date and approved by senior officers, and lacked documented procedures for identifying high-risk patrons.

The latest penalty comes against the backdrop of the Cullen Commission’s scathing 2022 report, which catalogued how billions in drug-linked cash flowed unchecked through B.C. casinos, real estate, and luxury markets. Cullen issued 101 recommendations, calling for sweeping reforms to break the province’s dependence on illicit capital. Yet more than three years later, only a handful of recommendations have been implemented by the Eby government. The most urgent — Cullen’s call for an independent Anti-Money Laundering Commissioner to oversee the provincial response — underscores the vulnerabilities exposed by BCLC’s latest alleged failing.

“The only way to reverse the state of affairs is to vest with one office the responsibility to support, oversee, and monitor the provincial response to money laundering,” Cullen wrote.

One particular set of data from the Commission’s final report illustrates how integral Chinese underground banks were to B.C. casino operations, and how easily gangsters accessed government-regulated financial sites. “In 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more, including 1,881 individual cash buy-ins of $100,000 or more,” Cullen’s report said. That means that in 2014, almost 2,000 times, a gambler was allowed to walk into a B.C. government casino carrying at least $100,000 in cash and buy casino chips. In almost all cases these were gamblers who traveled from China or gangsters who facilitated them. “In addition to the extraordinary amounts, the cash used in many of these transactions exhibited well-known characteristics of cash derived from crime,” Cullen’s June 2022 report added.

BCLC Internal Review Claimed “High-Risk” Gaps Addressed

Meanwhile, an internal review from BCLC, obtained by The Bureau through freedom of information, suggested the corporation had addressed gaps it was informed of. A February 2025 report on BCLC’s money laundering controls found a “current maturity” level of 3.5 out of 5 — functioning fairly well, but with room for improvement.

“Money laundering is often linked to various forms of organized crime, including drug trafficking, human trafficking, and terrorism financing,” the auditors noted. “By implementing robust AML practices within BCLC’s operations, the organization plays a crucial role in disrupting these criminal activities.”

Several problems were identified, which BCLC said in an appendix have since been fixed. The AML compliance manual for service providers was outdated, filled with technical jargon that made it “challenging for employees to understand and adhere to.”

And iTrak, BCLC’s casino reporting system, contains sensitive player information, but since its inception — and contrary to BCLC’s data retention policy — no data had been purged. This could produce outdated player information, reduce accuracy, and potentially create incorrect profiles.

Three high-risk patrons were also not designated as such in iTrak, which “could lead to suspicious activities being overlooked,” that report said.

BCLC additionally needed more clarity on casino chip passing to comply with ministerial directives.

Additionally, documents obtained by The Bureau in 2023 revealed that the RCMP’s internal response to the Cullen Commission — dubbed Project Neutralize — was not aimed at cracking down on laundering, but rather at blunting the Commission’s damaging findings. Records showed federal police sought to negate criticism that the force had failed to investigate the unprecedented surge of Chinese underground banking and cartel cash in B.C. casinos.

With research from Stanley Tromp