Quebec casinos, gaming halls still vulnerable to money laundering by organized crime, experts say

Quebec casinos and gaming halls are still easy targets for organized crime, with millions of dollars in dirty money likely being funnelled through the government-run venues, experts warn.

According to Loto-Québec data obtained by CBC/Radio-Canada, the provincially owned corporation reported nearly $420 million in large cash transactions to Canada's anti-money laundering watchdog over the past six years.

Criminals often use casinos as their playground, both as a place of entertainment and as a "place [where] they launder their money," said Matt McGuire, an internationally recognized money-laundering expert.

Although it's impossible to know the ratio of legitimate transactions to unlawful ones, McGuire said it's a "virtual certainty" a portion of the cash used in casinos is linked to organized crime networks, which profit from illegal activities such as drug and human trafficking.

"The average person carries very little cash, so you know, an excess of cash is a warning sign," said McGuire.

By law, Canadian casinos have to report both suspicious cash transactions and large cash transactions totalling $10,000 or more to the Financial Transactions and Reports Analysis Centre (FINTRAC). FINTRAC's mandate is to identify money-laundering threats and pass on the information to law enforcement.

If a casino fails to follow the rules, it faces hefty fines.

CBC News has fought to obtain access to the transaction reports Loto-Québec sends to FINTRAC since October 2017. These reports can include details about a casino patron's occupation, how the money was brought in or the grounds for suspicion.

Loto-Québec provided CBC/Radio-Canada with the number of suspicious and large cash transactions it submitted to FINTRAC each quarter, between January 2015 and March 2021. The monetary value of the suspicious transactions and other details were not available.

Between the 2015-2016 and the 2019-2020 fiscal years, Loto-Québec reported an average of $77 million a year in large cash transactions to FINTRAC, amounting to about 5,000 transactions a year — or 14 per day. That number has remained relatively constant.

The number of suspicious transactions, however, grew from 254 in 2015-2016 to 395 in 2019-2020.

McGuire said he isn't surprised Loto-Québec is reporting more suspicious transactions now, as it is likely being more careful following an administrative penalty it received for failures in compliance a few years ago.

In February 2020, Loto-Québec was fined $147,000 for three violations dating back to a 2012 compliance assessment at the Montreal casino.

FINTRAC accused Loto-Québec of failing to submit suspicious transaction reports and not providing specific details about a client's occupation in certain large cash transactions over $10,000.