A new report shows that key players are casinos, junkets, and cryptocurrency. They are part of East and Southeast Asia’s underground banking and money laundering. They help transnational crime. The study is ‘Casinos, Money Laundering, and Underground Banking in East and Southeast Asia. ‘
A Hidden Threat.’ It is about transnational organized crime. This crime is growing fast.’ It points out:
- The rise of illegal online casinos
- The increase of e-junkets
- The growth of cryptocurrency exchanges
These factors are driving cross-border crime in the region. “Casinos and high-cash-volume businesses have long enabled underground banking and money laundering. “The rise of unregulated online gambling and crypto exchanges has changed the game,” said Jeremy Douglas. He represents the UNODC for Southeast Asia and the Pacific. Platforms like Vave Casino show how the illicit economy uses these technologies. This use impacts the region.
How Online Casinos and Crypto are Revolutionizing Organized Crime in Southeast Asia
The illicit economy has grown, needing a tech-driven revolution in underground banking. This allows:
- Faster, anonymous transactions
- Mixing of funds
- New business opportunities for organized crime
Digitized casino and crypto solutions have boosted crime in Southeast Asia. This is especially true in the Mekong.
The report shows that crime groups use online casinos. They also use related businesses to launder large sums of money. They use both state-backed cash and cryptocurrencies. This helps them move billions in criminal proceeds into the financial system.
These underground banking methods have grown the illicit economy in the region. They have lured in new networks, innovators, and service providers to crime.
Diversifying Illegal Activities Through Online Casinos and Crypto Laundering in Southeast Asia
The cases also show how illegal online casinos have diversified. They added cyber fraud and cryptocurrency laundering. The casinos have strong evidence of organized crime. This includes crime at casinos in Myanmar controlled by armed groups. “Organized crime groups have gone where they see weaknesses. Casinos and crypto have proven the easiest targets,” Douglas added. Crackdowns in Cambodia and the Philippines forced criminals to move. They are relocating to:
- Places with more opportunities
- Areas where they expect less enforcement.
- Remote and border areas of the Mekong.
- Other regions recently.
UNODC Analysis on the Evolution and Regulation of Online Casinos in Southeast Asia
UNODC analysis shows that by early 2022, Southeast Asia had over 340 land casinos. Both were licensed and unlicensed. Most of these casinos have moved online, offering:
- Live-dealer streaming
- Proxy betting services
The latest industry data projects the official online gambling market to grow. It will be over US $205 billion by 2030. The Asia Pacific region will drive most of the growth. It is projected to have a 37% market share increase from 2022 to 2026. The study lists the steps. They took them to combat illegal capital outflows from casinos. Also, to fight corruption and money laundering. These crimes have partly caused these trends.
The brief is technical. It describes the mechanics, details, and causes of underground banking in the region. The study looked at criminal indictments, case records, and court filings. It also studied public disclosures. It looked at other data from authorities and partners over a year. It involved mapping and analyzing thousands of online groups. They were called ‘grey and black business’. These groups are on the clear web and dark web. They are used for illicit activities. The study also offers a list of recommendations. They aim to strengthen knowledge and awareness, laws and policy, and regional enforcement. The goal is to help governments address the situation.
Final Thoughts
The gap between organized crime and police is growing. Suppose the region fails to address this criminal landscape. “The impact will spread in Southeast Asia and beyond. Criminals will reinvest profits and innovate,” said Benedikt Hofmann. He is a UNODC Deputy Regional Representative.
“We trust the report will be a useful reference. It will help Southeast Asian countries. It will also help UNODC and partners engage more closely,” Hofmann said. “At this point, we are scratching the surface.”