Casinos turning into untraceable banks for money laundering in Southeast Asia, says UN report

According to a report released this week by the UNODC (UN Office on Drugs and Crime), the region’s casinos are the new banks to the criminal networks, allowing them to conduct money laundering on a larger scale.

Criminal networks operating in Southeast Asia have increasingly turned to casinos as their preferred means of money laundering, exploiting the industry’s loopholes to conduct vast-scale operations away from law enforcement. A recent United Nations (UN) report emphasizes the severity of the issue, revealing that despite major crackdowns, money-laundering networks have not only persisted but have become even harder to trace.

The security experts of the United Nations said that at any moment a bet is being laid in person, online, or even over the phone, at any moment in the border towns of Myanmar, Cambodia, and Laos. And in the flourishing underground economy of Asia, there are billions of dollars needing to be cleaned. All the illegally gained profits need to be cleaned and then repurposed into the actual economy. This is done often through property or else cryptocurrency.

Casinos in the region have become the new frontier for criminal enterprises seeking to legitimize their illicit gains. According to a report released this week by the UNODC (UN Office on Drugs and Crime), the region’s casinos are the new banks to the criminal networks, allowing them to conduct money laundering on a larger scale from the scrutiny and law enforcement. The UN report highlights the adaptability of these networks, which view casinos as an ideal environment for laundering money.

Benedikt Hofmann, the deputy regional director of the UN Office on Drugs and Crime, said that organized crime has created a parallel banking system by leveraging new technologies and the proliferation of loosely or entirely unregulated online casinos together with the crypto. Deputy regional director Hofmann also asserted, “And governments have struggled to keep up.”

According to the United Nations, money laundering networks are spread throughout the entire Southeast Asia and now it has become a difficult task to trace due to the widespread of cryptocurrencies, especially USDT, or Tether. The UN report underscores the need for urgent and collaborative action to address the issue at its roots. The report titled “Casinos, Money Laundering, Underground Banking and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerated Threat.” This report said that most countries in the region paid virtually no attention to casino junket operators and other VIP tour countries.

According to the study, in the year 2020, a total of US$157 billion was estimated by the government of China in money laundering through online gambling alone. On warrant being issued by China, the major players fled abroad. According to the United Nations study, it includes Wan Kuok Koi’s gambling networks in Cambodia and Myanmar, She Zhijiang’s compound in the Shwe Koko economic zone in Myanmar’s Shan state, and Zhao Wei’s Kings Romans casino complex in Laos.

Casinos, once regarded as hubs of entertainment and leisure, are now at the centre of a financial storm, facing increased scrutiny. The report also added that the crackdowns may hurt but in the long-term are of limited impact on criminal enterprises, which are in continuous evolution to make money and then clean it.