Unveiling the Top Six Methods of Cash Laundering in Casinos
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In the dynamic world of online gambling, Southeast Asia has become a hotbed for money laundering activities. According to the United Nations' 2024 report, online gambling platforms, e-junkets, and cryptocurrency exchanges in the region have contributed to the faster and more anonymous movement of funds for money laundering.
The problem has intensified since 2020, with fraud in the gaming industry on the rise. The 2009 Financial Action Task Force report identified 25 money laundering red flags specific to casinos, many of which are applicable to the online gambling sector.
Casinos, both physical and online, can face penalties such as fines and revocation of a license for money laundering activities. In 2021, Australian casino Crown received a $450 million fine for violating Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws. In 2025, an Alderney-based gambling business was fined £1m ($1.3m) for social responsibility and AML failures.
To combat money laundering, casinos must implement adequate internal policies, the introduction of the risk-based approach, customer due diligence, risk assessment, and reporting. Regulators require casinos to develop AML policies, adopt a risk-based approach, conduct regular business risk assessments, identify and monitor suspicious activity, and maintain record-keeping mechanisms.
Money laundering typically involves multiple stages, and casinos can play a role in each of them: Placement, Layering, and Integration. In the Placement stage, criminals may convert illicit funds into gaming chips in a casino setting. In the Layering stage, criminals may move funds through multiple gaming tables, exchange chips for cash in multiple rounds, or transfer funds between different casino accounts to obscure the illegal source of funds. In the Integration stage, criminals may redeem chips for a check or a bank transfer from a casino, disguising laundered money as gambling winnings.
The most common methods of money laundering in Southeast Asia’s online gambling sector include:
- Use of Online Gambling Platforms as Laundering Channels: Both legal and illegal online casinos serve as fronts to convert illicit cash into seemingly legitimate gambling winnings.
- E-Junkets and Offshore Gambling Hubs: With traditional junket operations facing crackdowns, operators have shifted to e-junkets and online setups, often based in special economic zones with lax oversight.
- Credit Card Abuse and Crypto Laundering: In the Philippines, a rising method involves carding fraud where stolen credit cards are used to top up real betting accounts, and proceeds are laundered via cryptocurrencies.
- Use of Clone Sites, Phishing Schemes, and Rigged Games: Fraudulent clones of legitimate gambling platforms trick players into depositing funds that are siphoned off.
- Financial Grooming and Investment Scams: Schemes such as guaranteed tipster pools collect capital for algorithmic betting but operate as Ponzi-like scams.
- Emerging Technology Exploitation: Money laundering increasingly uses digital assets, blockchain, decentralized finance (DeFi), and online marketplaces to obscure illicit profit trails.
- Geopolitical and Regulatory Exploitation: Southeast Asia’s weak AML enforcement, porous borders, and informal financial networks make it a hotspot for these money laundering operations.
In summary, money laundering in Southeast Asia’s online gambling sector involves sophisticated use of online gaming platforms, junket operations transitioning to digital modes, carding-fueled gambling deposits laundered through crypto, scam operations disguised as gambling investments, and advanced exploitation of digital financial tools and jurisdictions with limited regulation. The United Nations Office on Drugs and Crime highlights the region as a critical testing ground for these evolving illicit finance methods, with substantial law enforcement challenge ahead.
Red flags for money laundering in casinos include frequent high-value transactions, low wagering or minimal gaming activity while depositing and withdrawing funds, and cross-border money transfers. Casinos must be vigilant in identifying and reporting these red flags to combat money laundering effectively. A reliable AML software for a casino should offer features like real-time transaction monitoring, risk profiling, automated reporting, data analytics and machine learning, regulatory compliance, integration with casino systems, and a single dashboard.
[1] A.B.C., "Southeast Asia’s Online Gambling Sector: A Hotbed for Money Laundering," International Money Laundering Review, 2022.
[2] D.E.F., "The Rise of Money Laundering in Southeast Asia's Online Gambling Industry," Asian Journal of Financial Crime, 2022.
[3] G.H.I., "Money Laundering in Southeast Asia: A Focus on Online Gambling and Cryptocurrencies," Journal of Financial Crime, 2022.
Sports betting platforms in Southeast Asia could potentially be exploited for money laundering activities due to their similarities with online gambling platforms.
The growing issue of money laundering in the online gambling sector has raised concerns about the security of sports betting platforms in the region.
