SBC News Voice of the Sports Betting Industry
The United Nations Office on Drugs and Crime (UNODC) has highlighted that casinos in East and Southeast Asia have become the main vessels of local underground banking and money laundering syndicates to facilitate their illicit activities.
In the report “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat”, the UNODC noted that crime groups in the region have gradually moved away from mainly relying on drug trafficking to support their organisations, undergoing a technological revolution and instead switching to operating casinos, affiliated junkets and crypto marketplaces.
Jeremy Douglas, UNODC Regional Representative for Southeast Asia and the Pacific, commented: “Casinos and related high-cash-volume businesses have been vehicles for underground banking and money laundering for years, but the explosion of underregulated online gambling platforms and crypto exchanges has changed the game.
“Expansion of the illicit economy has required a technology-driven revolution in underground banking to allow for faster, anonymized transactions, commingling of funds and new business opportunities for organised crime.
“The development of scalable, digitised casino- and crypto-based solutions has supercharged the criminal business environment across Southeast Asia, and particularly in the Mekong.”
The tentacles of the underground world have reached all corners of the lower Mekong River, with Myanmar, Thailand, Laos, Vietnam, and Cambodia serving as a pit stop for money laundering crime gurus due to under-regulated gambling.
“Organised crime groups have converged where they see vulnerabilities, and casinos and crypto have proven the point of least resistance,” Douglas added.
“That said, operations against syndicates in countries including Cambodia and the Philippines have caused a partial displacement, and we have seen criminals moving infrastructure into other places where they see opportunity — basically where they expect they will be able to take advantage and not be held to account, to remote and border areas of the Mekong, and recently elsewhere.”
According to the UNODC, the diversification in the business portfolios of local crime bosses has attracted countless new investors and networks, resulting in an illicit economy times bigger than the GDP of the countries it has latched onto.
Official estimates show that by early 2022, Southeast Asia boasted more than 340 licensed and unlicensed land-based casinos, which have also incorporated online due to the appeal of live-dealer streaming and proxy betting services.
The Asia Pacific is being touted as the leader in the global growth of online gambling, with a projected 37% share between 2022 and 2026 of the total US $205bn expected by 2030.
Benedikt Hofmann, UNODC Deputy Regional Representative, commented: “It’s clear that the gap between organised crime and enforcement authorities is widening quickly. If the region fails to address this criminal landscape the consequences will be seen in Southeast Asia and beyond as criminals look to reinvest profits and innovate operations.
“We trust the report will prove as a useful reference for deeper engagement between countries in Southeast Asia, UNODC, and international partners. At this point, we are just scratching the surface.”
One of the cases examined in the paper – that of Alvin Chau Cheok-wa – is closely linked to the UK.
Chau was recently sentenced to 18 years in prison by Chinese authorities after being tried for more than 100 charges relating to facilitating illegal bets through his Macau-based Suncity junket – at one time the world’s biggest junket operator.
After Chau’s sentencing, members of the British Parliament voiced their concerns over a white-label company registered in the Isle of Man, which UNODC suggests was, at some point, controlled by Chau and his Suncity Group.
Several offshore operators targeting Asian markets where gambling is illegal have managed to secure a UK gaming licence through the white-label company, including 138.com – a firm with links to Chau as suggested by the UNODC which in 2013 managed to secure a partnership with Newcastle United.
In April 2023, the unnamed business was issued a £316,250 fine by the UK Gambling Commission over AML and social responsibility failures.
