A charitable gaming operation held at Toronto’s Canadian National Exhibition (CNE)—known as the CNE Casino—has initiated an appeal in Federal Court after being penalized nearly $200,000 by the federal anti‑money laundering watchdog, FINTRAC. The case stems from the charity casino’s failure, in FINTRAC’s view, to maintain adequate risk assessment procedures and to carry out a required biennial effectiveness review of its compliance program. Each violation, under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act, carries a maximum penalty of $100,000, resulting in the combined $199,000 fine.

The CNE Casino, which has operated seasonally as part of The Ex since 1991, functions as a not‑for‑profit and is licensed by the Alcohol and Gaming Commission of Ontario. It offers table games with bets capped at $300, and usually operates between 18 and 50 days annually under a model involving just two full‑time employees.

The Casino’s Response: “Opaque to the point of unintelligibility”

In its August 13 appeal filing, CNE Casino firmly rejects accusations of breaching the PCMLTFA, criticizing FINTRAC’s reasoning as “opaque to the point of unintelligibility.” According to the appeal, FINTRAC failed to specify which procedures were outdated or what regulatory aspects were missing. The casino emphasizes that it had already submitted extensive documentation of its risk‑assessment policies and procedures to FINTRAC earlier in April—yet received no acknowledgment of these in return.

As reported by National Post, regarding the review allegedly neglected, the casino explained that due to its limited seasonal timeline, it conducts an effectiveness review annually, rather than every two years. The appeal challenges FINTRAC’s insistence on a biennial formal review, insisting that regulatory obligations are about substance and not form.

FINTRAC’s own justification for the near‑maximum fines was that they were “necessary to encourage compliance.” The agency noted that the charity operation is well‑resourced and capable of paying the penalties; yet CNE Casino disputes that the punishment is fair, pointing out that the infractions were administrative and already rectified.

According to a Federal Court official, it is currently “too early to determine if a hearing will occur [or] where and when it would occur,” but such proceedings typically require a requisition within six months, followed by scheduling months later.

Industry Reaction: A Glitch, Not Criminal Behavior

The incident has reignited criticism within the gaming sector of Canada’s approach to anti‑money laundering enforcement. Derek Ramm, Kinectify’s Global Head of Advisory Services, took issue with the severity of the fines imposed on CNE Casino. While acknowledging the two compliance gaps identified by FINTRAC, Ramm noted that “there is no indication that FINTRAC’s findings in this case were associated to any alleged or actual criminal activity. … The violations, as outlined, do not point to systemic failures but relatively minor gaps in the casino’s compliance program that could be easily remedied (and, according to the article, were, in fact, remedied)”.

In addition, Ramm argued that a six‑figure fine absent criminal wrongdoing or intent reflects an overreliance on checkbox enforcement—at odds with the outcome‑focused model promoted by the Financial Action Task Force (FATF).

Another voice in the discussion came from Canadian Gaming Association senior advisor Amanda Brewer, who commented on Ramm’s post that “Canada will soon be (or is already) lagging behind other nations with its refusal to adopt a risk-based approach to AML. FATF should be spurring us on to adopt technologies and focus on outcomes. Instead, the industry gets a piecemeal approach and more shuffling around of paper.”

Meanwhile, FINTRAC’s communications advisor Lori Blair has declined to comment further, citing the matter’s presence before the Federal Court.