Online casinos 'used to launder cash'


Dormant account
May 7, 2004
Critics say laws that were meant to stop criminals abusing gaming sites are not working properly

ONLINE gaming sites have created a money-laundering arms race as criminals try to exploit internet casinos to hide stolen money, ministers have been told.

As representatives from 33 countries met in Ascot yesterday to discuss ways of curbing online gambling, the scale of the dangers posed by internet casinos and poker sites were outlined in a government-funded report.

Its research indicates that three quarters of people who use internet gambling sites were classified as problem or pathological gamblers, compared with just one in five of those who visit casinos.

The report for the Department for Culture, Media and Sport also highlighted the similarity between gambling sites and video games, which, it said, made them particularly dangerous for children. Free games that allow adolescents to learn how to play without betting money distorted their perception of reality.

The most significant revelation is that criminals are targeting betting sites to move tainted money and disguise its illegal origins.

This is an embarrassment for the Government because the gambling reforms of last year which legalised internet gaming in Britain were introduced to prevent gambling from being a source of crime and disorder, being associated with crime or disorder or being used to support crime.

The meeting devoted a session to the dangers of criminal activity and money laundering. According to research, criminals can deposit money under a false name and wager an amount before withdrawing it from their account, or open a remote gambling account to store funds until they can be transferred into a legitimate account, pretending that they are winnings.

Hugo Swire, the Shadow Culture Secretary, said: It is hard to see how the key aim of the legislation
You do not have permission to view link Log in or register now.

Intriguing media interpretations of UK government study

Readers opening their newspapers on Tuesday evening this week were met with a barrage of largely negative interpretations regarding the content of the RSe Consulting survey prepared for the British government Remote Gambling Summit.

Some of the comments looked like this:

* research shows that three out of four people who bet on the Internet are either problem or pathological gamblers - compared with just one in five who gamble, but not on the Internet.

* "It found that more children and women are being encouraged to gamble online and that the ease with which people can lose vast sums of money very quickly has exacerbated the problems of existing gambling addicts," the report continues, adding that the study claims that criminal gangs are exploiting lax security on casino websites to launder millions.

* highlighted the similarity between gambling sites and video games, which, it said, made them particularly dangerous for the underaged. Free games that allow adolescents to learn how to play without actually betting money distorted their perception of reality.

* quoting an example where a 16-year-old was able to place bets online on 30 of the 37 sites tested.

* The newspaper reported on one American study that found that three-quarters of gamblers who use internet sites were either problem or pathological gamblers. The comparable figure for gamblers who did not use the internet was only 22 per cent.

The mainstream media has always had a tendency to embrace the negative when it comes to gambling stories, but some of the following items in the report were worth noting instead of being ignored:

* The market is so competitive that the reputation of operators is paramount. Players will switch to rival sites if practices are questionable;

* The Asian market is growing fastest and is likely to become the largest market in the next few years; Mobile gambling is also likely to grow.

* Online gamblers tend to be educated and younger people comfortable with technology.

* While many of the factors associated with problem gambling appear to be related to remote gambling, the profile of online gamblers does not conclusively match that of problem gamblers; This indicates that most studies are based on land experience - there has not yet been a proper, scientific and online gambling-specific survey of problem gambling.

* Remote gambling has appealing characteristics to young people, but age verification controls, when used, are effective;

* Opinions differ about how much of a threat money laundering poses via remote gambling. Some believe the limits on gambling are too low to make laundering a problem while others believe that it is too difficult for operators to trace money definitively. This rather inconclusive comment would appear to indicate that there is inadequate proof that online gambling is being used by money launderers - "opinions differ" suggests diverse and subjective opinions but no firm proof. Whilst US politicians and enforcement officials in particular are prone to make generalised public accusations along these lines, conclusive evidence has yet to be seen - and online gambling financial tracking systems are more advanced and sophisticated than many realise.

* There is no greater risk to the remote gambling industry in regard to money laundering as there is to any other e-commerce business' has been totally ignored.

* Some micro regulations, legal and technology frameworks such as age verification controls, kite-marks etc., when adopted appear to be effective;

* Some level of international cooperation, and possibly regulatory harmonisation, is required to effectively curb problem and youth gambling.

Users who are viewing this thread

Meister Ratings