Casino Money Laundering – Wash Cash & Get Away
Casino money laundering is a standard way for many shady businesses and organised crime groups to transform illegally acquired money into legit profit. In this article, we mention a few of the most popular casino cash washing practices, how they affect the gambling world, and anti-money laundering laws.
You may not know that, but money laundering through casinos became popular at the beginning of the last century. This was one of the ways the mafia transformed its profits into legit earnings. In this article, you can read the short history of the money laundering schemes and who was the first to apply them. We will also mention online casino money laundering practices, which appeared with the online gambling operators and online banking.
What Is Money Laundering?
Before we get into the deep waters of the money laundering casino schemes, we will first talk about money laundering in general. It is not clear how far back in history these money swindling practices go, but today it is considered a serious organised criminal scheme. Before we say anything else, here is what “money laundering” means:
The definition may seem vague, but so is the crime. There are many ways to “clean” money and in the next paragraphs, we will mention some of them. Overall, the laundering of cash is considered any action or activity where money generated by any illegal or criminal activity makes money appear acquired via a legitimate source.
History of Money Laundering
The Casino (1995) movie with Robert DeNiro is a great example of a casino money laundering story. Even if we say it is “just a movie”, there are many other situations in history when the organised criminal groups and businesses washed illegal profit via legitimate businesses.
An excellent example is Al Capone, the notorious mafia boss from the 1920s and 1930s. He purchased “Laundromats” and mixed their profits with the illegal income from prostitution and bootlegged liquor sales. It is believed that this is the first time when the term “money laundering” was used to describe this illegal activity.
Another excellent example and contemporary to Al Capone is Meyer Lansky, the Father of Money Laundering. He took any measure to avoid being convicted for tax evasion (like Capone was) and figured out how to use banks to his advantage. The Swiss banking system seemed like the perfect way to hide his growing money piles and, at the same time, keep them safe from thieves.
But the mafia and organised crime groups are not the only perpetrators. Many popular figures and companies gain profits via side activities and shady deals. Even though those finances are not gained by criminal activity, the perpetrators are trailed and punished according to the anti money laundering laws worldwide.
Today, the world moves into the digital era and online casino money laundering is one of the latest trends in criminal activities. This is extremely easy because there are countless sites and online businesses, which do not require proof of identification or source of income. The new legislation of the different countries worldwide fights against illegal money transactions, but new schemes are always created to avoid the law.
How Money Laundering Is Done?
The most popular ways to gain cash that has to be “washed” are tax evasion, fraud, theft, bribery, drugs, trafficking, or terrorist financing. The criminals use various methods to launder the cash:
- Smurfing
- Bulk cash smuggling
- Counterfeiting
- Cash-intensive businesses
- Foreign exchanges
- Money laundering through a casino
- Trade-based money laundering
- Shell companies and trusts
- Credit card laundering
- Bank capture and funds transfer
Almost all countries worldwide have laws and a government authority dealing with each offence on the list. The casino anti-money laundering laws regulate the situation with online gambling and land-based casinos. So far, the authorities and prevention groups have managed to catch the perpetrators on time and during every phase of the money laundering process: placement, layering, and integration (extraction).
Money Laundering Through Casino
Now that you know what “washing dirty cash” means, it is time to give details about casino money laundering practices. This criminal offence is possible despite the efforts of the operators to keep financial criminals out of gambling. In this section of the article, we will tell you about a few of the money laundering schemes in the gambling cities around the world and how this criminal activity affects the gambling world.
Money Laundering in Legal & Illegal Casinos
The money laundering casino schemes have different levels of difficulty depending on the casino. For example, it is easier to wash cash in illegal online gambling sites and land-based underground gambling dens rather than at licensed operators. In the table below, we will remind you of the main differences between legal and illegal casinos:
2 Column HTML Table
| ⚖️ Legal Casinos | 🕶️ Illegal Casinos |
|---|---|
| Company Brand | No Company Brand |
| Gambling Licenses | No Gambling Licenses |
| Company Registration Information Is Provided | No Company Registration Information |
| Require Players Identification Documents | Players Can Remain Anonymous |
| Demand Proof of Income | Proof of Income is Not Required |
| Anti-Money Laundering Policy | No Anti-Money Laundering Policy |
| Underage Gambling Policy | No Underage Gambling Policy |
| Works with Mediators & Control Organisations | No Mediators or Control Organs |
| Legit Transaction Methods | Multiple Unknown Transaction Methods |
| Good Customer Service | No Customer Service |
| Responsible Gambling Policy | No Responsible Gambling Policy |
| Players Receive Full Wins (after tax) | Players Rarely Win |
The cash washing via gambling institutions is easy because casinos perform many different financial transactions. Players can open credit, buy or cash out chips, use safe leasing service, make a fund transfer, or use the operator’s checks’ endorsement feature. Since there are so many ways to convert cash, most of the countries have strict gambling laws, and an excellent example are the federal gambling laws in the USA.
Here Is How Money Laundering Affects Gambling
It is clear that every illegal activity damages the legal businesses. That is why the respectable licensed operators and especially the best safe online casinos have casino anti-money laundering policies and cooperate with the authorities to fight against illegal actions.
Any relations of a licensed operator with illegal activity or shady practices can result in players choosing another gambling site. Loss of clients is death to most operators. That is why they put their effort into keeping the criminal elements away from their business, or dealing with the matter fast by applying anti-money laundering policies.
Alongside the legal operators, the illegal casinos are home for money laundering activities of all sorts. Players are easily drawn by the promises of fast or high profits, and without realising it, they lose more than what they gain. Illegal gambling sites can cause incredible damage to societies, legal businesses, organisations, and even government structures.
Popular Casino Laundering Schemes
Overall, every money laundering casino scheme aims to pass illegally acquired money through the casino. Practice proves that all schemes we listed can be adjusted to online casino money laundering schemes, and that is why more countries work on creating stable online gambling laws. Now, here are the most popular casino schemes you might have heard of:
If you think that this can never happen in your favorite casino, then think again. Even the licensed and safe operators are constantly under attack from the criminal world. What protects them are strict procedures for players’ identification and cash upon registration.
Anti-Money Laundering Laws Worldwide
During the last decades, all countries worldwide turned their efforts to fighting and preventing money laundering. This is a challenging task considering that this criminal activity has no minimum financial threshold. Washing a small amount or millions is still a criminal offence.
An operator or his employees who fail to report money laundering may be considered collaterals in laundering money. Since illegal gambling and money laundering casino schemes are such a big problem worldwide, many laws and government institutions deal with those crimes. Here are a few examples:
- United States of America: the US gambling laws, Money Laundering Control Act of 1986, Intelligence Reform & Terrorism Prevention Act of 2004, and more are used by responsible organs including US’s Financial Intelligence Unit, The US Department of the Treasury, Office of Terrorism and Financial Intelligence, IRS, FBI, and CIA.
- Latin America: here the casinos attract money laundering organisations. Countries like Aruba, Cayman Islands, Colombia, Mexico, Netherlands Antilles, Panama, and Venezuela are among the washers’ high priority countries.
- Canada: Canada’s Financial Intelligence Unit deals with money laundering and terrorist financing according to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its associated Regulations.
- United Kingdom has the gambling laws in the UK, Serious Organised Crime and Police Act 2005, Criminal Finances Act 2017, and Sanctions and Anti-Money Laundering Act 2018, and more.
- Australia & New Zealand: the Asia/Pacific Group on Money Laundering (APG) organisation follows the Australian Transaction Reports and Analysis Centre (AUSTRAC), Anti-Money Laundering and Counter-Terrorism Financing Act 2006, and cover most of the New Zealand gambling laws.
- India: has Prevention of Money Laundering Act 2002 and modern gambling laws in India.
- South Africa: the Financial Intelligence Centre Act (2001) is in power, but this country still has big trouble with illegal gambling, crimes, and money laundry.
The European Union also makes constant changes in the legislation to catch up with the innovative criminals. The latest amendment is the Fifth Money Laundering Directive (5MLD), which came into power on 10 January 2020. The latest innovation is applied all over the European Union and serves as a base for many other countries.
Casino Money Laundering Popular Questions
Our casino money laundering article has enough information about this crime. Here, we have collected and answered questions about money laundering. Each question has a brief and concise answer with a link to more information on our website.
