As global anti-money laundering regulators are set to conduct an in-depth review of Canada's national framework in November, Canadian gaming industry and regulatory experts are urgently calling for systemic reforms to the current anti-money laundering system. This assessment, initiated by the Financial Action Task Force (FATF), will be Canada's first comprehensive review by this global authority since 2016.
The background pressure is intensifying. Recently, the U.S., Canada's southern neighbor, has frequently imposed heavy penalties on casino giants such as MGM, Wynn, and Resorts World, mainly for allowing illegal gambling companies to use casinos for money laundering. In Canada, despite progress in regulatory reforms in Ontario, which have brought parts of the grey market into the legal system, online gaming platforms are still considered emerging high-risk areas, especially in potential money laundering chains involving fentanyl and other drug trades.
At the Canadian Gaming Summit held in Toronto, the anti-money laundering issue was a focal point. Several panel members, including the anti-money laundering director of the British Columbia Lottery Corporation, pointed out that online platforms and payment channels are easily exploited by drug traffickers to "launder" illegal proceeds. Reports from the federal financial intelligence agency FINTRAC show that some drug traffickers frequently use electronic transfers to top up iGaming accounts and disguise these as everyday transactions to withdraw funds, thereby bypassing financial institution monitoring.
Currently, Canada still employs a "big data-style" anti-money laundering mechanism, which encourages as many transaction reports as possible rather than precisely identifying suspicious activities. According to Paul Burns, chairman of the Canadian Gaming Association, this approach has created "the world's largest haystack," making it difficult to find the "needles" of criminal clues. Last year's cyberattack on FINTRAC further exposed technological vulnerabilities, with a large volume of transactions needing to be submitted manually, resulting in extremely low efficiency.
Meanwhile, the Canadian Parliament is advancing Bill C-2, which would raise the maximum personal fine to 4 million Canadian dollars and the maximum corporate fine to 20 million Canadian dollars, and plans to strengthen the definition of casinos, information sharing, and reporting standards for suspicious transactions. Once the new regulations are implemented, they could bring a structural upgrade to the country's anti-money laundering system.
However, as Derek Ramm, a global advisor at Kinectify, stated, legislation alone is far from sufficient. Canada needs to move from a "form-filling" compliance approach to a "results-oriented" enforcement mechanism—otherwise, in the next round of FATF assessments, Canada may be placed on the "grey list" of countries needing enhanced monitoring. The reform is urgent.
