Reported by Comply Advantage

Cash-intensive facilities that utilize complex transaction chains often attract criminals looking to launder illicitly obtained funds. Casinos fall into this category, offering gamblers anonymity and the ability to transact large amounts of money at a rapid scale. 

While the market size of the casino and online gambling industry was forecast to reach $261.8 billion in 2022 – representing a $54.5 billion increase from 2021 – more and more casinos are being held responsible for their insufficient anti-money laundering (AML) controls. In 2022 alone, reports show casino regulators in the US, the UK, Austria, Sweden, and the Netherlands issued over $264 million in fines to casinos – representing a 444 percent increase over 2021.

How Does Casino Money Laundering Work?

In many cases, criminals exploit the anonymity provided by the casino environment. Gamblers can give the casino incorrect, incomplete, and/or vague identifying information, meaning red flags may not be raised around their identity. When playing in an online casino, they can also create and use multiple accounts, which means suspicious transactions are not noticed quickly.

A common technique in casino money laundering involves converting “dirty” money into physical casino chips, which are then played with in various games before being cashed out as “clean” money in the form of a check. Fixed-odds betting terminals are often used in this laundering method, as they allow the gambler to only lose a small amount before cashing out. 

Legal and Illegal Casinos

Casino money laundering can take place in both legal and illegal gambling establishments:

• Legal casinos – these casinos need to be licensed and are required to pay taxes. 
• Illegal casinos – these undercover casinos are not licensed and do not pay taxes.

According to the US Department of Justice (DOJ), illegal casinos are one of the five major types of illegal gambling – the other types being sports betting with bookmakers, horse betting with bookmakers, sports parlay cards, and numbers (also known as “the Mafia lottery” or “the numbers racket”). 

In a joint operation carried out in September 2021, INTERPOL commented on the common convergence of illegal gambling with organized crime networks and money laundering efforts. The city of Los Angeles, California, has experienced this on an unprecedented scale since the COVID-19 pandemic, with illegal casinos (known as “casitas”) emerging “everywhere” under the control of the Mexican Mafia. According to authorities, the illegal casinos can generate tens of thousands of dollarsper week, with the proceeds primarily benefiting incarcerated members of the gang. In addition to contributing to elevated levels of crime – such as drug use, shootings, and kidnappings – illegal casinos present a higher risk of money laundering as gamblers and organized crime members look for ways to make their winnings appear legitimate in the financial system. 

Casino Money Laundering Examples

Incidents of money laundering through casinos have repeatedly made headlines over the past few years, with some jurisdictions facing a great deal of scrutiny for insufficient anti-money laundering (AML) measures and slow enforcement proceedings. 

Macao, China

While gambling is strictly prohibited in China, it is permitted in the special administrative region of Macao. However, Thomson Reuters found that Macao “has not scrutinized money laundering risks in the gaming industry with as much rigor as casino regulators in other jurisdictions.” Following this report, an amendment to gambling laws now means that Macao’s Chief Executive can revoke a casino’s license if it fails to pay its taxes on time, or on national security grounds. 

Australia

Additional examples of money laundering in casinos can be found throughout Australia. In March 2022, the Australian Transaction Reports and Analysis Centre (AUSTRAC) started federal proceedings against’s the country’s largest casino operator, Crown Resorts. Crown’s alleged failings include not undertaking appropriate ongoing customer due diligence (CDD) on high-risk customers and not having a risk-based transaction monitoring program to identify suspicious activity. As of March 2023, Crown’s proceedings are still underway.

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