FINTRAC Reporting Failures at CNE Casino: $199,000 Penalty Underscores the Importance of Risk Assessments and Compliance Reviews

On September 4, 2025, FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) announced an administrative monetary penalty (AMP) of $199,000 against the Canadian National Exhibition Association, operating as CNE Casino in Toronto. The penalty was issued on July 11, 2025, following a compliance examination that revealed serious deficiencies in FINTRAC reporting and compliance obligations.

While CNE Casino has appealed the decision to the Federal Court, the case highlights the growing enforcement trend in Canada's AML/ATF regime and demonstrates how failures in risk assessment and compliance program effectiveness reviews can result in costly regulatory consequences.

The Nature of the FINTRAC Violations

CNE Casino was cited for two "serious" violations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations:

Violation #1: Failure to Assess and Document ML/TF Risks

Under subsection 9.6(1) of the PCMLTFA and paragraph 156(1)(c) of the Regulations, businesses must assess and document the risk of money laundering (ML) and terrorist financing (TF) across prescribed factors, including:

• Products, services, and delivery channels
• Clients and business relationships
• Geographic locations
• Affiliates and subsidiaries
• Other relevant risk factors

FINTRAC determined that while CNE Casino had procedures for staff to escalate high-risk transactions to a Compliance Officer, this did not meet the legislative requirement for a documented, risk-based assessment. The absence of a formal and comprehensive risk assessment is considered a serious violation, as it undermines a casino's ability to identify, mitigate, and report suspicious activity effectively.

Violation #2: Failure to Conduct a Prescribed Compliance Review

Under subsection 9.6(1) of the PCMLTFA and paragraph 156(1)(f) of the Regulations, regulated entities must conduct a review of their compliance program to test the effectiveness of:

• Policies and procedures
• Risk assessment framework
• Training program

CNE Casino claimed that an annual review took place, but no documentation was available to demonstrate that the required review occurred. Without documented proof of a compliance effectiveness review, FINTRAC concluded that the requirement was not met. This too was classified as a serious violation.

Why These Violations Matter

Both violations go to the core of an effective AML compliance program:

The Bigger Picture: FINTRAC Enforcement Is Escalating

The CNE Casino penalty is part of a larger trend. FINTRAC has dramatically increased enforcement in recent years:

• In 2024–25 alone, 23 Notices of Violation were issued, with penalties exceeding $25 million—the highest annual total in FINTRAC's history.
• Since gaining AMP authority in 2008, FINTRAC has imposed more than 150 penalties across nearly every regulated sector.
• Penalties are not limited to financial institutions or MSBs—casinos, real estate brokers, and dealers in precious metals and stones are also under scrutiny.

This trend shows that no reporting entity can afford to take a "check-the-box" approach to compliance.

The Role of FINTRAC Reporting and FINTRAC API in Modern Compliance

At the heart of AML supervision is FINTRAC reporting, which includes:

Traditionally, these reports were submitted manually—time-consuming, error-prone, and difficult to track. Today, the FINTRAC API is transforming compliance by enabling:

• Automated FINTRAC reporting directly from compliance systems.
• Schema validation to reduce report rejections and errors.
• Integration with transaction monitoring tools to streamline compliance workflows.
• Real-time submission tracking for audit-ready evidence of compliance.

Key Takeaways for Casinos and Other Reporting Entities

The CNE Casino case highlights three critical lessons:

1. Documented risk assessments are mandatory. Informal processes or verbal instructions are not enough—FINTRAC expects written, comprehensive assessments aligned with regulatory requirements.
2. Compliance reviews must be both conducted and documented. Even if reviews are performed, failure to produce proof will be treated as non-compliance.
3. Technology reduces compliance risk. Leveraging tools with FINTRAC API integration ensures reporting accuracy, auditability, and program effectiveness.

How to Stay Ahead of FINTRAC Enforcement

To avoid penalties and strengthen compliance, businesses should:

• Implement automated FINTRAC API reporting solutions.
• Maintain detailed, up-to-date risk assessments across all prescribed factors.
• Conduct and document independent effectiveness reviews annually.
• Deliver ongoing AML training to staff, agents, and contractors.
• Treat compliance not as a cost, but as a safeguard for reputation and long-term business sustainability.

Final Thoughts

The $199,000 penalty against CNE Casino reinforces a clear message: FINTRAC expects more than surface-level compliance. Businesses must build, document, and continually test their compliance programs—or risk substantial financial and reputational consequences.

In today's enforcement environment, FINTRAC reporting automation via API integration is no longer optional. By adopting modern RegTech solutions like Comply+, Canadian casinos, MSBs, and other reporting entities can not only meet their regulatory obligations but also protect themselves from the growing risk of penalties.