It goes without saying that the gambling industry is the perfect industry for criminal funds. We’ve seen this to varying degrees in films, with the result that many people see gambling as an opportunity for laundering money. A casino is simply a public place that houses a variety of games of chance and skill. Many casinos prefer to be oblivious to how clients finance their bets, which, unfortunately, can allow their casino table games to become conduits for illegal activity.
Let’s take a look at money laundering and the problems it creates in the gambling industry.
What Is Money Laundering?
Money laundering is the illegal process of making large sums of money generated by criminal activity, such as drug trafficking, seem legal. The money laundering process is done to make illicit funds appear to have come from a legitimate source. Money generated from criminal activity is considered dirty, while the practice of “laundering” makes that money “clean.”
It is a serious criminal offense committed by white-collar and street-level criminals. Many financial companies have anti-money laundering (AML) policies in place to detect and prevent money laundering.
How Does Money Laundering Work?
Criminal organizations depend on money laundering to use illegally obtained money effectively. Criminals need a way to deposit money in financial institutions legitimately, yet this can only happen if they can prove that it is from legitimate sources. Typically, three steps take place in money laundering: placement, layering and integration.
Placement
Placement describes the act of covertly injecting the “dirty money” into a legitimate financial system, such as a casino.
Layering
Layering conceals the source of the money through a series of transactions and bookkeeping tricks.
Integration
In the final step, the now-laundered money is legitimately integrated and withdrawn from the legitimate account to be used by the criminals.
How Money Laundering Works in Casinos
Money laundering at casinos can take up different forms. Here are some examples of how it is accomplished.
Cash In, Cash Out
The cash-in, cash-out form is the simplest and most typical method of laundering at a casino. All that needs to be done is for criminals to exchange their money for playing chips and then convert them back into cash. Dirty money is then mistaken for money won at a casino.
Collusion Between Players
With this strategy, one player must “lose” all their dirty money to another player with whom they are in collusion.
Combining Gambling and Non-Gambling Methods
Advanced criminals further conceal money traces through casinos by using virtual assets, such as cryptocurrencies, NFTs and property purchases. They do this to confuse the authorities by concealing the origin of the funds.
How Money Laundering Works Through Casino Online Betting
Much like land-based casinos, large sums of money flow in and out of online casinos, which makes it easy for criminals who want to go undetected. They also do not have to worry about facial recognition when playing online. Here are some ways people launder money through online gambling.
Cashing Out a Betting Account
In this money laundering scheme, a user starts by depositing money into a betting account. They must provide an ID and a bank account number as a verification step. However, once that step is completed, the user can use any payment method to deposit money. They will then place a few small bets to make it seem like a normal account before cashing out the funds. The money has now passed through a legitimate business — the online casino — and the origins of the money can no longer be traced.
Gambling in Exchange for Goods
Another efficient way of money laundering lets a player clean their money at the same time that they receive illegal funds and sell illegal goods. From a criminal perspective, this method is highly efficient. During a game or bet, both the buyer and seller of illegal goods (drugs or weapons) participate in the same online casino game. The buyer can transfer funds to the seller through the game or bet. The seller then collects the funds from their payment account in exchange for the goods. Technically, the money came through betting, so it cannot easily be traced as originating through illicit transactions.
Gamble Safely and Responsibly at BetMGM
At BetMGM, you will gain access to a great variety of online casino games, including online slots, live dealer casino games and so much more. Register with us and practice responsible gambling. Learn the best security tips for Mac and PC users and gamble in a safe online environment.
