Money laundering in the casino: How, who and why?

The fight against money laundering in online casinos is the reason for many measures such as proof of identity and verification of payments.

In this article, we will take a closer look at this problem and explain what money laundering is, why casinos are easy targets, and how the problem can be mitigated.

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Casino money laundering: Methods

There are several main methods that criminals use to launder money. Many groups rely on splitting deposits into small batches to avoid detection – a practice known as structuring.

Others simply buy chips with cash, spend some time on the casino floor and try to cash them out as winnings. There are many methods that involve the use of shell companies to disguise transactions, bank accounts, and individuals involved. It is an incredibly complex area of finance and one that authorities are fighting tirelessly to seize and eradicate in all forms.

Casino money laundering: What makes casinos a perfect target?

Casino gambling is a brilliant way to make money disappear and reappear in separate bank accounts. Of course, the casino industry takes measures to make this more difficult, which we’ll discuss in more detail later in this article.

The casino does not have to be involved in money laundering activities for criminals to be successful, however, many have been in the past. Since there is a black market everywhere in the world, criminals know of many casinos and sports betting operators that they can exploit to launder their money.

Without the rule conformity of the regulated casino industry, this is an uphill battle that the authorities cannot fight alone. There are many well-funded and tightly organized criminal groups that persistently try to use casinos to launder money. Within the casinos themselves, there are also many entry points and vulnerabilities that can be easily exploited.

Casino staff are one of the biggest risk factors for money laundering, as they are often low-paid administrative staff who can easily be bribed or threatened to help criminals launder money. But what makes casino money laundering so attractive, as opposed to, say, offshore shell companies or other methods?

Money laundering in the casino

The top three reasons for money laundering in casinos

Casinos and sports betting operators have huge money flows that make it easy to place bets intended for money laundering in the sea of transactions flowing in and out. It doesn’t matter who you are if you’ve been convicted of financial crimes, or where your money comes from. Most casinos around the world are happy to accept bets from anyone with money to gamble.

High-rollers are an important source of profit for many casinos – and in order to maintain a good relationship with customers, it often happens that the staff ignores a suspicious transaction or turns a blind eye. As you can imagine from the above statements, revenue and profit are huge motivating factors for casinos.

It’s hard to deny that casinos are powerless when it comes to stopping these activities. Industry regulators, on the other hand, should do more to systematically monitor customers who raise red flags with suspicious deposit activity.

Industry regulators certainly already play a role in this regard by regularly auditing major casino companies around the world and analyzing financial reports for irregularities. It remains to be mentioned that the biggest operators also make enough money from legal transactions. So, it is rather the smaller casinos with less strict rules & supervision that are involved with money launderers. Asia in particular has a long-standing problem with these illegal activities – and a thriving underground gambling industry.

Fighting casino money laundering: Regulation

In highly regulated industries like Europe and North America, casino money laundering is a very low threat to operations. Regulators in these areas are very conscientious and use a system composed of law enforcement, technology and other methods to mitigate the problems. Europe and North America are definitely quite resistant to the risks associated with exposing themselves to organized crime and are more active in their resistance to money launderers.

The Asian gaming industry is worth over $180 billion annually. Before the market became such an enormous part of the local economy, a strong and thriving underground gambling scene was firmly established. Even now, with the interests of the major casino corporations firmly in control of the market, there is still a dark underbelly.

Certain casinos in Asia are notorious for being linked to the criminal underworld – and to a much greater extent than their European counterparts. It has been proven in the past that the Yakuza has a strong influence over many gambling operators in Japan, and Southeast Asia has seen several high-profile arrests for gambling manipulation and money laundering in the last decade.

However, the tide is turning. Many of these casinos have begun to verify the identity of their new customers. More importantly, the selection of payment options, of which there used to be countless, has been reduced to just a few, making it much easier to track payments. The ability to use different accounts for deposits and withdrawals has enabled money laundering in casinos in the past; ending this practice will do much to eliminate the remnants of money laundering in this industry.

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Is the game over for money launderers?

Preventing the use of casinos as vehicles for money laundering is a constant battle between law enforcement, criminals and casino operators. In the UK, customer verification procedures are constantly being improved, and in its current state, the system is very impenetrable. The same is true for much of Europe and North America.

However, the lax approach to financial controls in certain countries continues to allow the practice of money laundering to remain under the radar. The sums involved are unimaginable, and with them, powerful illegal gangs have their hands in gambling, determined to continue their business undisturbed. So, the battle between criminals and the authorities will definitely continue to rage.

David West
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