Forget Macau’s junket launderers, dirty Chinese cash has a new home: Southeast Asia’s casino scam hubs

“There was, before 2022, a wave of funds coming out of mainland China in breach of capital-control regulations and some of that was passing through unlawful gambling activities in Southeast Asia and Macau,” said Steve Vickers, CEO of Steve Vickers and Associates, a regional political and corporate risk consultancy.

In recent years, Southeast Asia’s casino industry has experienced exponential growth, with more than 340 licensed and unlicensed casinos in operation by early 2022, the United Nations Office on Drugs and Crime (UNODC) said in a report in January. This followed a series of enforcement actions in Macau, the report explained, which were driven partly by efforts to tackle corruption, money laundering, and illegal capital outflows from mainland China.

Chau was arrested in November 2021 and sentenced to 18 years in prison in Macau in January last year. Chan was sentenced to 14 years, later reduced to 13 years, last April.

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Macau police arrest Suncity casino junket boss in crackdown on online gambling

As a result of the clampdown, operators have been relocating from Macau to the special economic zones of Southeast Asia, the UNODC report said – as evidenced by a sizeable drop in the number of licensed junkets in Asia’s gambling capital, plunging from a high of 235 in 2014 to just 36 last year, with only 12 still thought to be in operation.

“Many illegal online casino[s] in Southeast Asia have diversified their business lines into cyberfraud operations, with extensive evidence of infiltration of organised crime within casinos and SEZs [special economic zones] for the purposes of concealing various illicit activities,” the UNODC report said.

On April 13, China’s Ministry of Public Security announced that 130 Chinese