Casinos must fulfill specific obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations to help combat money laundering and terrorist financing in Canada. For the purpose of the PCMLTFA, a casino is an entity in Canada that is authorized to do business in Canada if it is:
- a lottery scheme, located at a fixed place of business that includes games of roulette or card games; or
- games, located at a fixed place of business, where there are more than 50 slot machines or similar electronic gaming device in the establishment. This could include a place of business such as a restaurant that has these electronic gaming machines; or
- a lottery scheme accessible to the public through the Internet or other digital network. This does not include an entity if it is solely offering online bingo or the sale of lottery tickets through the Internet or other digital network.
A registered charity authorized to carry on business in a casino for a period of two consecutive days or less, under the supervision of the casino, is not considered to be a casino.
The Regulations refer to the term ‘conduct and manage’ to identify the entity legally responsible for the gaming activities at a casino. The definition is in line with the Criminal Code terminology that sets out who can oversee, carry out or license out the gaming activities (lottery schemes). The entities that conduct and manage lottery schemes, as authorized by the Criminal Code, must do so in line with the provincial legislation on gaming.
In Canada, the provincial and territorial governments delegate the legal responsibility as to who can conduct and manage gaming activities (lottery scheme) at a casino. The entity that is delegated this responsibility by the province or territory is then responsible for meeting the obligations of the PCMLTFA and Regulations for that casino.
In some cases, the entity that conducts and manages a casino is not necessarily the same entity that operates the casino activities on a day-to-day basis. For example, if a provincial government has delegated the responsibility to conduct and manage the lottery scheme to a provincial lottery corporation who then delegated their reporting under the PCMLTFA to another entity, the provincial lottery corporation remains the reporting entity responsible for ensuring compliance with the PCMLTFA and Regulations. In other words, the legal entity responsible for the casino, as per the PCMLTFA, may choose to delegate the reporting to another entity but they remain responsible for meeting these obligations.
Casinos as described above are responsible for providing FINTRAC with certain transaction reports, for implementing a compliance program and for keeping records that may be required for law enforcement investigations. Their obligations under the PCMLTFA and associated Regulations are described below.
A comprehensive and effective compliance program is the basis of meeting all of your obligations under the PCMLTFA and associated Regulations. During a FINTRAC examination, it is important to demonstrate that the required documentation is in place and that employees, agents, and all others authorized to act on your behalf are well trained and can effectively implement all the elements of your compliance program. A senior officer must approve the compliance program and the compliance officer must have the necessary authority to carry out the requirements of the program. You must:
- Appoint a compliance officer responsible for the implementation and oversight of the compliance program;
- Develop and apply written compliance policies and procedures that are kept up to date and approved by a senior officer;
- Apply and document a risk assessment, including mitigation measures and strategies;
- Develop and maintain a written training program for employees, agents, and others authorized to act on your behalf; and
- Review your compliance program (policies and procedures, risk assessment and training program) every two years for the purpose of testing its effectiveness.
See the Compliance program requirements guidance and the Risk assessment guidance for more information on these obligations.
Know your client
As a casino, you must verify the identity of clients for certain activities and transactions according to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR). Part of knowing your client includes following the methods to identify clients, as well as conducting certain additional activities as listed below.
- When to identify individuals and confirm the existence of entities – Casinos;
- Methods to identify individuals and confirm the existence of entities;
- Business relationship requirements;
- Ongoing monitoring requirements; and
- Third party determination requirements.
Casinos are required to complete reports about certain transactions and property and submit them to FINTRAC. Financial transaction reports are critical to FINTRAC’s ability to analyze transactions in order to develop financial intelligence that is disclosed to law enforcement and partner agencies. Therefore, the quality of your reporting will be reviewed by FINTRAC in examinations.
Suspicious transactions: You must submit a suspicious transaction report (STR) as soon as practicable after completing the measures required to establish reasonable grounds to suspect that a transaction is related to the commission or the attempted commission of a money laundering/terrorist activity financing offence. The following STR guidance pieces explain how to identify and report suspicious transactions and should be read together. See What is a suspicious transaction report?, Reporting suspicious transactions to FINTRAC and Money laundering and terrorist financing indicators - Casinos.
Terrorist property: When you know that property in your possession or under your control is owned, controlled by or on behalf of a terrorist or a terrorist group, you must submit a report without delay. You must also submit a report to the Royal Canadian Mounted Police (RCMP) and the Canadian Security Intelligence Service (CSIS). See Guideline 5: Submitting Terrorist Property Reports.
Large cash transactions: When you receive $10,000 CAD or more in cash (including taxes or other fees) either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 15 calendar days. See Guideline 7A: Submitting Large Cash Transaction Reports to FINTRAC electronically and Guideline 7B: Submitting Large Cash Transaction Reports to FINTRAC by paper.
Electronic funds transfers: When you send or receive client-initiated instructions to transfer $10,000 CAD or more internationally; either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 5 business days. See Guideline 8A: Submitting non-SWIFT Electronic Funds Transfer Reports to FINTRAC electronically, Guideline 8B: Submitting SWIFT Electronic Funds Transfer Reports to FINTRAC and Guideline 8C: Submitting non-SWIFT Electronic Funds Transfer Reports to FINTRAC by paper.
Casino disbursements: When you disburse $10,000 CAD or more, either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 15 calendar days. See Guideline 10A: Submitting Casino Disbursement Reports to FINTRAC electronically and Guideline 10B: Submitting Casino Disbursement Reports to FINTRAC by paper.
If you have a computer and an internet connection, you must submit all reports to FINTRAC electronically, except Terrorist Property reports, which can only be submitted on paper.
You are responsible for keeping certain account, transaction and client identification records. These records are to be kept in such a way that they can be provided to FINTRAC within 30 days if required to do so. See Record keeping for casinos for details.
Penalties for non-compliance
Non-compliance with Part 1 or 1.1 of the PCMLTFA may result in criminal or administrative monetary penalties.
FINTRAC has created a Guidance glossary that defines certain terms used throughout its guidance documents.
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