Black Market Gambling Sites Fertile Ground for Money Laundering, Intelligence Agency Warns

Canada’s financial intelligence information unit, FinTRAC, warns that criminals proceed to launder muddy money through online gambling platforms, and that unlicensed, black-market sites are past far their method of choice, particularly if the sites are based inward jurisdictions with weak anti-money laundering or anti-terrorist financing regimes.

A common method mired using soiled money to purchase prepaid gift cards or vouchers, which can so live used to deposit money into an online gambling account, according to the report. The money can buoy and then be withdrawn via conducting wire or e-transfer to a camber calculate as “winnings.”

It’s common for black-market operators to have gift cards as a deposition method because US financial institutions are prohibited from processing unlicensed online gaming transactions under federal law of nature (UIGEA). Thus, unlicensed operators must feel more creative slipway of letting US players fund their accounts.

Organized Crime

Money launderers also oft enjoyment e-wallets and defrayal religious service providers to displace money 'tween bank accounts and online gambling sites. FinTRAC observed one organised criminal offense group depositing finances to unlicensed offshore gambling sites using e-wallets and withdrawing monetary resource using a wire transpose to financial institutions inward Canada.

Online play sites also bring home the bacon a method of layering foul money. This was often characterized past transactional activity that “appeared rotary in nature, where finances were received and sent backward to the same gaming sites multiple times,” FinTRAC said. This method also allows launderers to mingle illicit funds with cash from split up sources.

The accounts mired inwards this typewrite of activity often lacked mundane banking transactions and in the first place consisted of transfers to and from online play sites, a ruby-red flag for money laundering.

In compiling its report, FinTRAC examined suspicious transaction reports related to online gambling 'tween 2016 and 2023. It collated information from other financial intelligence service units and international regime and nongovernment organizations, and it analyzed information from clear sources to raise and underpin suspicious trends and patterns.

Advice for Operators

While money laundering is to a lesser extent usual inward the regulated markets, FinTRAC provided licensed operators with some paint indicators to seem come out for. Red River flags for money laundering in both the online and land-based markets include “minimal play.” This is where a player will create the phantasy of play before a withdrawal.

In sports betting terms, this mightiness involve players betting exclusively on low-risk matches, thereby minimizing losses, FinTRAC said.

The agency also highlighted the apply of “chip-dumping,” where an online poker player purposefully loses his chips to a colluding participant.

This method has been commonly used in conjunction with credit scorecard fraud, where stolen credit entry cards are used to deposition cash in hand into i play answer for and are transferred to another calculate through and through chip-dumping,” FinTRAC said.

Licensed operators should also keep an eye on out for customers who quest the carry-over of profits to the bank business relationship of another political party or to a high-risk jurisdiction, and for customers whose geolocation log-ins aren’t consistent with their registered addresses or log-in history.

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