Casino Money Laundering Absent in Online Gambling Activities

by Devon Chappell, News Staff Writer

July 11, 2009

One of the major concerns of anti-online gambling proponents is that internet betting is an activity that fosters money laundering. A valid concern on paper, to say the least, money laundering certainly has been linked to several land-based casino and sports betting operations. The early days of Las Vegas alone were a breeding ground for casino money laundering. Since that time, the gambling industry has come a long way in setting up laws and preventive measures to keep money laundering out of betting activities. More often than not, the money laundering that takes place these days starts off in quasi regulated offshore gambling havens like Costa Rica.

But what about the online gambling industry? Are online casinos engaging in money laundering activities? Well, according to the Remote Gaming Association (RGA), they're not. Issuing a new report undertaken with the help of MHA Consulting, the RGA says there have been no case-study examples of gambling money laundering taking place within online licensing jurisdictions.

Objectively speaking, it should be no surprise to hear this information coming from the RGA, which is a trade body for a number of premiere software developers and online casinos. If there was documented casino money laundering in online gambling, I don't think you would hear the RGA broadcasting that information for all to hear. And if they did, you can bet it would be "massaged" as much as possible to give online gambling the benefit of the doubt, if you will.

However, the fact of the matter is that no massaging was needed for this report. MHA Consulting concluded that both statutory and self-regulation have been effective at reducing the number of documented gambling money laundering incidents in jurisdictions that license online casinos. Specifically, key findings noted an absence of terrorist financing, fueled by a "strong commitment" within the internet betting industry to prevent and detect money laundering and complying with regulatory mandates.

Furthermore, the report concluded that online gambling is not especially susceptible to money laundering activities. Besides the lack of documented cases, this was attributed to the actual nature of online gambling itself. Since all identities of online bettors are known, transactions are electronically processed, and all wagering activities are tracked and recorded, online gambling lends itself to transparency and conducting comprehensive audits.

Not surprisingly, all of the information used in the report was compiled by reviewing European licensing jurisdictions, which provide more regulation of online gambling than anywhere else in the world. Statistics were also collected from the European Money Laundering Directives and Financial Action Task Force.

In the end, both the RGA and MHA concede that the online gambling industry will need to remain vigilant in the area of money laundering prevention and detection. Casino operators are encouraged to work with licensing jurisdictions and to stay abreast with new technological innovations and tactics being employed by money launderers. As a relatively new industry with equally new regulatory framework, operators must continue working collectively and individually to keep criminal activities out of internet betting. So far, so good. Chalk another one up for the "pros of online gambling".

Back to CASINO NEWS