Secret Service warns: Black market gambling sites are fertile ground for money laundering
Canada's financial intelligence unit FinTRAC warns that criminals continue to launder money through online gambling platforms, with unlicensed black market sites their preferred method by far, especially when these sites are located in countries with weak anti-money laundering regulations Money laundering or terrorist financing.
One common method is to use dirty money to buy prepaid gift cards or vouchers, which are then used to deposit the money into online gambling accounts, the report said. The money can then be paid into a bank account as a "bonus" via bank transfer or electronic transfer.
It is common for black market operators to accept gift cards as a method of deposit because federal law (UIGEA) prohibits U.S. financial institutions from processing unlicensed online gambling transactions. As a result, unlicensed operators have to find more creative ways to get U.S. players to fund their accounts.
Organized Crime
Money launderers also often use electronic wallets and payment processors to move funds between bank accounts and online gambling sites. FinTRAC observed an organized crime group using e-wallets to deposit funds into unlicensed offshore gambling sites and withdraw funds via wire transfers to financial institutions in Canada.
Online gambling sites also offer ways to accumulate dirty money. This is often characterized by transaction activity that "appears to be circular in nature, with funds being received and sent back to the same gambling site multiple times," FinTRAC said. This method also allows money launderers to mix illicit funds with cash from various sources.
Accounts associated with this type of activity often lack routine banking transactions and consist primarily of transfers between online gambling sites, which is a red flag for money laundering.
In preparing the report, FinTRAC reviewed suspicious transaction reports related to online gambling between 2016 and 2023. It collects data from other financial intelligence units and international governmental and non-governmental organizations and analyzes publicly available information to strengthen and confirm it.
Operator Precautions
While money laundering is less common in regulated markets, FinTRAC provides licensed operators with some key indicators to pay attention to. Warning signs of money laundering in both online and physical markets include “minimal gaming.” Here, players are given the illusion of playing a game before paying.
According to FinTRAC, in the case of sports betting, this may lead to players specializing in betting on low-risk games to minimize losses.
The agency also pointed to the practice of "chip dumping," in which an online poker player deliberately loses chips to participants who are acting with him.
This method is commonly used in credit card fraud, where funds are deposited into a gambling account using a stolen credit card and then transferred to another account via a chip dump. ” FinTRAC said.
Licensed operators should also be wary of customers requesting the transfer of winnings to another party's bank account or a high-risk jurisdiction, as well as customers whose geo-location login does not match their registered address or login history.
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Source: www.casino.org
