Bill C-31: Tightening Up
Bill C-31 proposes a new and effective definition of casino, including not just brick-and-mortar establishments but also a provincial government that “conducts and manages a lottery scheme … that is accessible to the public through the Internet or other digital network,” excluding certain things like an internal progressive network for slots in a land-based casino covered elsewhere in the casino definition. Clearly, then, casinos covered by the Budget Implementation Act include only the provincial offerings, and not the international casinos and sports betting operators regulated abroad—or by First Nations in Canada—that are taking business from Canadian customers.
This approach still brings AML–CTF oversight into a system that needs it. Provincial casinos, whether land-based or online, clearly benefit from the procedures and structures inherent in reporting up to FinTRAC, and these provisions in C-31 should be seen as salutary. Moreover, it’s not clear that FinTRAC is vested with the necessary resources, to say nothing of the legal authority, to actively and meaningfully regulate casinos that are themselves regulated outside of Canada but taking bets and wagers from Canadians. And we shouldn’t forget that many of those foreign gaming operators’ sites—PokerStars.com and PartyCasino.com spring to mind as just two examples of many—are not lightly regulated and already have tough AML and CTF regimes in place.
However, this limitation of Bill C-31 leaves a hole in Canadian law, and one that has caught international attention. In the FATF’s most recent mutual evaluation report on Canada (from 2008), the organization called attention to the regulation of Internet gaming by a First Nations group in Quebec, the Mohawks of Kahnawake. While acknowledging that the Kahnawake gaming law and regulations were designed to ensure licensee suitability and fair play, the FATF concluded that “these activities [the regulation of Internet gaming and betting] are not subject to AML/CTF regulations and Canada’s federal and provincial governments are faced with substantial challenges in determining the appropriate course of action to take … Canada must either enforce its prohibition effectively or introduce comprehensive AML/CTF regulation for the industry.”
Fitting non-provincially-licensed casinos into the PCMLTFA isn’t easy. But by taking the path of least resistance, the government has done nothing to cure a continuing blind spot: many other operators taking wagers from Canadians.