Inside Southeast Asia’s Casinoland: the ‘underground bank’ at the centre of transnational crime

To the criminal networks, the region’s casinos are the new banks, allowing them to launder money on a vast scale away from scrutiny and with little likelihood of law enforcement catching up with them, according to a report released this week by the UN Office on Drugs and Crime (UNODC), which has carried out extensive research on the issue.

“Most countries in the region pay virtually no attention to casino junket operators and other VIP tour companies,” said the report, titled “Casinos, Money Laundering, Underground Banking and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerated Threat”.

As China issued warrants, the major players fled abroad, hidden under layers of new nationalities and false passports, to build casino networks and “smart city” projects in Southeast Asian countries.

Crackdowns may hurt, but in the long-term are of limited impact to criminal enterprises which are in constant evolution to make money and then clean it, the report added.

Casinos and their money exchanges handle all aspects of money laundering, according to the report: “placing” black money into a legal business, “layering” it by distancing and redistributing the funds from their original source and then “integrating” it among general gambling proceeds and other businesses within a casino.

Casino junkets in particular – which bring high rollers into casinos with private rooms, VIP services and even free flights and hotel rooms – serve as a weak link in anti-money-laundering policies that casinos try to operate, and are vulnerable to being “infiltrated by organised crime groups”, according to the UN report.

Junkets then allow the criminal insider to “offset” the value of an asset in another country on the table, or