Unlicensed black-market gambling sites have become a hotbed for money laundering, according to a recent warning from Canada's financial intelligence unit. Criminals are taking advantage of weak anti-money laundering measures in certain jurisdictions to launder dirty money through online gambling platforms. This article delves into the methods used, such as using prepaid gift cards to deposit funds into gambling accounts and withdrawing them as 'winnings.' E-wallets and payment service providers are also utilized to move money between bank accounts and online gambling sites. Learn about the red flags for operators to watch out for and how to combat this growing issue.
Money Laundering through Black-Market Gambling Sites
Money laundering has become rampant in the black-market online casino industry, with criminals using unlicensed gambling sites as their preferred method. These sites, especially those based in jurisdictions with weak anti-money laundering measures, provide fertile ground for illegal activities.
A common method employed by money launderers is the use of prepaid gift cards or vouchers. These can be purchased with dirty money and then used to deposit funds into online gambling accounts. The laundered money can then be withdrawn as 'winnings' via wire transfers or e-transfers to bank accounts.
Black-market operators often accept gift cards as a deposit method to circumvent US federal laws that prohibit financial institutions from processing unlicensed online gambling transactions. This forces unlicensed operators to find alternative ways for US players to fund their accounts.
Exploiting E-Wallets and Payment Service Providers
Money launderers frequently use e-wallets and payment service providers as a means to transfer funds between bank accounts and unlicensed offshore gambling sites. One observed method involves depositing funds to these sites using e-wallets and then withdrawing them via wire transfers to financial institutions in Canada.
Online gambling sites also provide an opportunity for money launderers to 'layer' their illicit funds. This is often done through circular transactional activity, where funds are received and sent back to the same gambling sites multiple times. Such activity raises red flags for money laundering.
These suspicious accounts primarily consist of transfers to and from online gambling sites, lacking everyday banking transactions. This pattern serves as a clear indicator of potential money laundering activities.
Red Flags for Money Laundering in the Gambling Industry
While money laundering is less common in regulated markets, licensed operators should remain vigilant for certain red flags. One such red flag is 'minimal play,' where players create the illusion of gambling before making a withdrawal. This may involve exclusively betting on low-risk matches to minimize losses.
Another red flag is the practice of 'chip-dumping' in online poker, where a player intentionally loses their chips to a colluding participant. This method is often associated with credit card fraud, where stolen credit cards are used to deposit funds into one gambling account and then transferred to another through chip-dumping.
Operators should also be wary of customers who request the transfer of winnings to bank accounts in high-risk jurisdictions or to the accounts of third parties. Inconsistent geolocation log-ins and discrepancies with registered addresses or log-in history should also raise suspicions.
