Casino workers deal cards to a camera, and the bets come in as Tether. That was a USDT-based underground online casino in Kokang, in Myanmar’s Shan State, which was shut down in December 2023 after armed conflict intensified. The United Nations uses it as an example of a much wider problem.
On 15 January 2024, the UN Office on Drugs and Crime (UNODC) published a report from Bangkok on how casinos, junkets and cryptocurrency now sit at the centre of underground banking and money laundering across East and Southeast Asia. Its title is blunt: “A Hidden, Accelerating Threat.” The cyberfraud and organized crime that grow out of it reach well beyond the casino floor.
Old habits, new tools
Casinos have laundered money for years. What changed, according to UNODC’s regional representative Jeremy Douglas, is the arrival of online gambling platforms and crypto exchanges with little oversight. “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,” he said. Faster, anonymous transfers have, in his words, “supercharged the criminal business environment,” especially in the Mekong.
The Organized Crime and Corruption Reporting Project pulled out some of the numbers. Tether, a coin backed by the US dollar, is among the currencies financial intelligence authorities in the region see most in criminal use. An audit cited in the report found users made more than US$17 billion in illicit Tether transactions between September 2022 and September 2023. Criminals can also chain several bank or exchange accounts together in a layering scheme called a “motorcade”, and advertise such services on Facebook and Telegram.
Industry estimates put the black market gambling business in China alone at more than US$145 billion in 2020. The report cites Levo Chan Weng Lian, an alleged triad leader charged in January 2022 with running dozens of illegal high-stakes online gambling venues, whose profits authorities say came to well over $4 billion. It also points to Crown Resorts in Australia, which a federal court ordered in July 2023 to pay a AU$450 million (US$300 million) penalty for more than 500 breaches of anti-money laundering law.
Crime that moves when pushed
Illegal casino operators have branched into cyberfraud and crypto laundering, the UN found, often inside compounds, special economic zones and border areas, including areas held by armed groups in Myanmar. Crackdowns in Cambodia and the Philippines pushed some of it elsewhere. “Organized crime groups have converged where they see vulnerabilities, and casinos and crypto have proven the point of least resistance,” Douglas said. Criminals have shifted to remote and border zones of the Mekong where they expect to escape accountability.
UNODC estimated that, as of early 2022, Southeast Asia had more than 340 casinos on land, some licensed and some not, with most having moved online to offer live-dealer streaming and proxy betting. Industry data projects the lawful online gambling market will pass US $205 billion by 2030, with Asia Pacific taking a projected 37% share of the growth from 2022 to 2026.
The study draws on more than a year of work with authorities, including indictments, court filings and an analysis of thousands of online “grey and black business” groups. It ends with recommendations on awareness, legislation and enforcement. Benedikt Hofmann, UNODC’s deputy regional representative, warned that the gap between organized crime and the authorities is widening quickly. “At this point,” he said, “we are just scratching the surface.”
Sources
- Casinos and cryptocurrency: major drivers of money laundering, underground banking, and cyberfraud in East and Southeast Asia (UNODC Regional Office for Southeast Asia and the Pacific)
- Casinos and Crypto Major Drivers of Money Laundering in East and Southeast Asia (OCCRP, Henry Pope)
Sources
- Casinos and cryptocurrency: major drivers of money laundering …
- Casinos And Cryptocurrency: East Asia And Southeast Asia Are…
