Money Laundering In Casinos

Money laundering is one of the biggest bottlenecks for criminals today. Turning dirty money into clean money holds the most frequent failures for criminals, leading to arrests for all natures of crimes. Estimates for the amount of money laundered globally is in excess of 3% of the world’s GDP.

Turning illegal money into what seems like legitimate money has been a staple for many years in the form of small businesses, but now, criminals have turned to casinos to launder money at a very small amount of previous costs.

The Three Main Steps

Money Laundering is usually conducted in three main phases.

  • Placement – Placement is the act of initially getting the money into a financial institution or otherwise business. Most placement for smaller scale is done in cash, as this is where the majority of criminals get caught laundering money.
  • Layering – Layering is the most difficult part of the laundering process. Here the criminals try to disguise the trail of money, making it as untraceable as possible. In traditional laundering methods like a laundromat, this would be creating fake customers and invoices to justify the additional money coming in.
  • Integration – Integration is the final step where the now “cleaned” money is cleared into a financial Institution. In the laundromat example, this would be a simple bank deposit stating earnings.

These are the typical steps taken by small scale money laundering. As you can see, there is cost and delays involved. Depositing too much money at a time would cause suspicion and lead to potentially getting caught. Because of the typical limiting factors here, criminals have turned to casinos to better launder their money.

How It’s Done In Casinos

Criminals have taken to depositing money into a casino, mostly with cash or, if online, a cryptocurrency transfer. From there, a few games are played to make it seem more legitimate, usually in the form of low house edge or fixed-odds betting terminals. Once they have spent some time and money in the casino, the cash is withdrawn and deposited back into a bank account with a receipt as proof that the money is gambling winnings

Money laundering at a casino may seem simple in theory, however, casinos have implemented a few systems in place to try and prevent money laundering. The biggest difference here is scale, when money laundering on a smaller scale, casinos have little to no prevention methods. Authorities are only alerted when suspicious transactions take place at a certain size or frequency, depending on the particular casino.

Laundering In Online Casinos

With the systems put into place to try and limit money laundering in physical casinos, many criminals have turned to online casinos instead, specifically offshore online casinos. Online casinos, while regulated to be fair and safe, have little regulation in terms of what money they can receive. Being able to deposit and withdraw in cryptocurrency makes online casinos even more susceptible to money laundering. To battle this, new regulations need to be put into place to monitor money intake of online casinos.