However, criminals have now moved onto online casinos and gambling sites to launder money. Illegally earned cash will be used to place sure-fire bets on gambling sites, enabling future illegal income to be disguised as gambling winnings. Is This Really Happening In Canada?
Payment document: In this scheme, money launderers typically purchase chips with cash or through their individual account with the casino. Repayment is then requested in form of a cheque or a bank draft or, in some cases, in cash.
Anti-Money Laundering Proposal for Casinos to be discussed at Regional Meetings: The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) will hold four regional meetings this summer to provide an opportunity for casino industry representatives and other members of the public to comment on a proposed rule announced.

Basically, online gambling offers ideal conditions for professional money laundering. Organized crime also partly uses online casinos to launder criminal money. In an article that was only a few months old, we looked at the question of whether the risk of money laundering is particularly high in online gambling. Chapter 3: Description of Possible Money Laundering Schemes A.1) Methods of Money Laundering through the Use of Casino Value Instruments 6. Casinos utilize various value carriers or instruments to facilitate the gambling process, and the type and use of these instruments differ depending on both local.

Money Laundering

“It is a process in which illegal funds are shielded, broken the link with the original source, given a new legitimate one. Simply black money is converted into white or illicit proceedings are legalized in this practice.”

Among all financial crimes, AML compliance is considered to have the highest intensity. It not only distorted the system but also encouraged other crimes. Money laundering has weakened the economies of different countries. The funds are transferred across the borders, through which the government can’t estimate the actual amount of money in their jurisdictions. They can’t design their annual budget efficiently because of this. The smooth flow of funds going through banking channels is not possible if they are used for money laundering.

How Casinos are Used for Money Laundering: Explained with Stages

The short-term procedure to turn small amounts of funds into a huge amount without alarming the police authorities. Gambling or betting is one of the ways that can be used for this motive. Because of this, casinos attract money launderers. A lot of ill-gotten funds are used in gambling and carried out from the other side as legitimate i.e. “winnings”. Typically, this approach has some associated risks. Despite this, if the whole amount can’t be extracted a small proportion is still acceptable. Online casinos or online gambling games provide an additional benefit i.e. anonymity of players. It means that one criminal can open numerous gaming accounts.

The casino approach operates by injecting the funds through gambling games. In casinos, chips are bought using illegal funds, which are then concisely played and converted back into cash. A money launderer himself converts the chips or uses his representative. In most cases, money launderers use foreign casinos. This raises the difficulty for law enforcers to collect evidence of money laundering.

Money laundering is done through three stages discussed below:

Placement

The illegitimate funds are placed in casinos by giving them to the agent. He takes the cash to the casino and buys chips against them. Sometimes websites give free chips on every new account opening. This makes it easier to purchase chips without leaving any record. The criminals are in search of ways like this where they can buy casino chips from sources other than casinos.

Structuring

Layering is done in gambling by taking the cash or chips into the casinos and used for playing betting games. Money launderers play smartly and use only a little portion of the chips because there is uncertainty in gambling games. Therefore, they use chips for a few hours and convert them back into cash.

Receipts from casino cashout are used as evidence of the fund’s legitimacy. Casinos do not have a proper record of how many chips are bought, played, win or lose and converted back. Thus, money launderers can claim any amount of winning.

Integration

In other methods, this stage is very sensitive but in casinos, it is the easiest one. Once the winning has reported and all the taxes are paid, the illegal money is legal now. The UBO can use this money easily in the financial system without any fear of getting caught.

AML Compliance for Online Casinos

To stay compliant with the latest AML regulations and laws, and provide protection to their players, casinos need an efficient AML program. Know your customer (KYC) verification along with anti-money laundering watchlist screening can help in that.

Know Your Customer

Every new player who wants to open a gambling account must be verified by giving his government-issued id documents. His name and other information are retrieved through the document. It helps in having legitimate and authentic customers, erasing anonymity additionally.

AML Screening

How Do Casinos Launder Money

Then the name of the player is checked against global watchlists or sanction lists. These lists contain the data of criminals and potential money launderers. Upon finding the name in any of the lists, the players will be allowed to gamble.

Money Laundering And Casinos

Wrapping it Up

How Are Casinos Used To Launder Money

Governments are also planning to take the gambling business under the AML umbrella. UK, France, Italy, and Spain have proposed AML regulations on gambling. Online casinos can clean their channels from financial crimes using a robust and automated AML program.

How Casinos Launder Money