Loophole in stopping Money Laundering through Wagering

[lienfaye]

But most users are not very honest so that the casino freezes more users' money trying to launder money through the casino, many cases that I often encounter on this forum also the casino will ask for an explanation of where the funds are used also ask the user to verify to validate that the user clean.

This also prevents the casino from being involved in money laundering cases and is considered to support criminal acts being subject to legal sanctions, but not many casinos want to return user money and only freeze the winnings, it is rarely found, if the user does not meet the requirements requested by the casino then the account will be suspended also the money will be confiscated by the casino.

How will casino know that the black money is being deposited on any casino ? No casino checks where the money is coming from. They only care how much they get the deposits from their gamblers. Similarly if the specific gambler ( who is also a money launderer), wins and wagers the minimum requirement and cash out on the different side, the casino never care as to which address the money is being transferred.

So i guess that casino have least interest in catching the money launderers. All they care about is how they can get more people to gamble and increase their bankroll.

Well, I think it depends on the amount. Because if we're talking a huge figure here ($100k up) and let's say you deposited, able to fulfill the wagering requirement and then tried to withdraw. Certainly you'll be ask to comply the KYC procedure to verify your identity. There's a case wherein the casino asked the user (after not processing the withdrawal) to give additional documents of proof of funds to know where the money came from, part of their AML procedure. Though this is a rare case, still it depends on the situation and the money involved.

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[Bitinity]

Well, I think it depends on the amount. Because if we're talking a huge figure here ($100k up) and let's say you deposited, able to fulfill the wagering requirement and then tried to withdraw. Certainly you'll be ask to comply the KYC procedure to verify your identity. There's a case wherein the casino asked the user (after not processing the withdrawal) to give additional documents of proof of funds to know where the money came from, part of their AML procedure. Though this is a rare case, still it depends on the situation and the money involved.

Depends on the casino, not all casino will ask KYC based on the amount of the money. Mostly yes, but I still believe that there are still some reputable casinos that wont ask players to complete KYC based on the withdrawal amount unless there is a specific term that the casino has a withdrawal limit to ask KYC. By the way, I think it is getting further from the main topic as the main topic is about the chance to wager with high odds to complete wagering requirement.

[ethereumhunter]

Well, I think it depends on the amount. Because if we're talking a huge figure here ($100k up) and let's say you deposited, able to fulfill the wagering requirement and then tried to withdraw. Certainly you'll be ask to comply the KYC procedure to verify your identity. There's a case wherein the casino asked the user (after not processing the withdrawal) to give additional documents of proof of funds to know where the money came from, part of their AML procedure. Though this is a rare case, still it depends on the situation and the money involved.

That happens to many people who use big money when disappointed because the casino asks them to do KYC. Some of them don't want to do KYC but that's the rules of the casino that must be fulfilled by its members, especially for those who use big money. So KYC is a way for the casino to know if there are members who want to launder their money at the casino so that the casino can prevent it before they can withdraw the money. And people who want to launder their money in the casino already know this, so maybe they are looking for other ways that won't require KYC.

[darkangel11]

Many casinos now force gamblers to do KYC. So when a gambler's complete details are with the casino, there is not much for that gambler to do. At any time the casino can freeze the funds if they believe the gambler is involved in money laundering.

And this is why one should not gamble in casinos where KYC is mandatory, as this increases the risk of a gambler even if he is not involved in activities such as money laundering.

Money laundering is just one of the options casinos have to close your account and take your money. It's a loophole they can use against you, not the other way round.
We're talking about crypto casinos here so there's no money laundering taking place but rather coin mixing. Is coin mixing money laundering is another debate because I'd say it isn't since cryptocurrency isn't money. The process of laundering starts and ends with exchanges. If someone sends crypto to a casino it's just a step in the whole process.

[ScamViruS]

~~

Money laundering is just one of the options casinos have to close your account and take your money. It's a loophole they can use against you, not the other way round.
We're talking about crypto casinos here so there's no money laundering taking place but rather coin mixing. Is coin mixing money laundering is another debate because I'd say it isn't since cryptocurrency isn't money. The process of laundering starts and ends with exchanges. If someone sends crypto to a casino it's just a step in the whole process.

This can be a riskier approach than other approaches to coin mixing. But how many things people do online, just as the casino wants to prevent the gambler, the gambler also wants to fool the casino by using the casino's system. But the casino is in an advantageous position here, as they can freeze the gambler's funds without any prior notice.

So I think since this question has arisen I think there is a reality behind it. Because not everyone thinks in a good way like us, there are many dishonest people who use the weakness of the system to continue their work.

[Webetcoins]

Many casinos now force gamblers to do KYC. So when a gambler's complete details are with the casino, there is not much for that gambler to do. At any time the casino can freeze the funds if they believe the gambler is involved in money laundering.

And this is why one should not gamble in casinos where KYC is mandatory, as this increases the risk of a gambler even if he is not involved in activities such as money laundering.

And why would a casino believe you are involved in money laundering if that is not really true? They would only suspect that you are involved in something illegal if you are doing activities that are suspicious and aren't normal, but if you know that you are clean and haven't been doing anything illegal or have any unusual activities, you shouldn't be worried at all because they can't confiscate your funds without any reason and you can always claim them back.

Also, one cannot find any casino that is both trusted and doesn't require KYC, even if it's not mandatory initially, a gambler will eventually be asked for it once they either make a big deposit or request a withdrawal that is higher than their average withdrawals which raises a red flag for the management.

[Hispo]

Many casinos now force gamblers to do KYC. So when a gambler's complete details are with the casino, there is not much for that gambler to do. At any time the casino can freeze the funds if they believe the gambler is involved in money laundering.

And this is why one should not gamble in casinos where KYC is mandatory, as this increases the risk of a gambler even if he is not involved in activities such as money laundering.

.... because I'd say it isn't since cryptocurrency isn't money. ...

It depends whom you ask, though.
I would say that in this instance cryptocurrency is actually money because it serves as medium to transmit value and without a third party. The fact a third party is not within the equation is the reason why the regulation on casinos and exchanges is getting tighter each day that comes and goes. With traditional FIAT casinos (specially those which only operate online) there is a higher risk the authorities would reach and freeze the money the criminals intend to clean up.  There comes the preference of criminals for cash, noone can tell either a bill is "clean" or not just by looking at it.

Even if we see Bitcoin and altcoins, not as money, but casino chips; they are still assets and hence can be laundered.

[Fortify]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

So does this mean that there is a loophole here and the money launderers can easily by pass this wagering requirement?

It's unlikely that much money laundering actually takes place through online casinos, at least not the major ones, because the way they've been structured actually makes it a lot easier to trace than you might think. Pretty much every big site now will also be enforcing kyc type actions on a regular basis, so any fake accounts will be detected after a minimum threshold and mule accounts are going to be reported to the tax or government authorities if there is the slightest suspicion. There are many other sites sitting in grey areas that are likely to be doing this stuff instead of casino's.

[Beparanf]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

So does this mean that there is a loophole here and the money launderers can easily by pass this wagering requirement?

It's unlikely that much money laundering actually takes place through online casinos, at least not the major ones, because the way they've been structured actually makes it a lot easier to trace than you might think. Pretty much every big site now will also be enforcing kyc type actions on a regular basis, so any fake accounts will be detected after a minimum threshold and mule accounts are going to be reported to the tax or government authorities if there is the slightest suspicion. There are many other sites sitting in grey areas that are likely to be doing this stuff instead of casino's.

Money launderer play smart since they can play normally in a casino using 50% winning chance rate and recover past of their loses through VIP reward rakeback and tournaments which they will surely win due to the volume of money they are pouring on their wager to launder money. Casino VIP rewards makes launderer can play a normal game without relying on a low risk games alone just to farm wager safely.

It's very to detect launderer these days even with KYC since they can simply hire a mule like what you said while they can play normally leaving no evidence for a casino to accuse them for committing such crime.

[TimeTeller]

It's unlikely that much money laundering actually takes place through online casinos, at least not the major ones, because the way they've been structured actually makes it a lot easier to trace than you might think. Pretty much every big site now will also be enforcing kyc type actions on a regular basis, so any fake accounts will be detected after a minimum threshold and mule accounts are going to be reported to the tax or government authorities if there is the slightest suspicion. There are many other sites sitting in grey areas that are likely to be doing this stuff instead of casino's.

They can get away with it if the money involved is small, however, if the money is significant enough, the site may really ask for KYC.
And that will possibly happen for gambling sites with license as they need to comply with their AML/KYC policy.
I still believe that most money laundering activities still do happen via fiat-based transactions.
But we can't totally discard the idea that some of them are already happening in crypto casinos.
Some casinos are only requiring 1-5x wagering requirements before withdrawal, so yes, that would be easy to comply with.

[klidex]

Well, I think it depends on the amount. Because if we're talking a huge figure here ($100k up) and let's say you deposited, able to fulfill the wagering requirement and then tried to withdraw. Certainly you'll be ask to comply the KYC procedure to verify your identity. There's a case wherein the casino asked the user (after not processing the withdrawal) to give additional documents of proof of funds to know where the money came from, part of their AML procedure. Though this is a rare case, still it depends on the situation and the money involved.

That happens to many people who use big money when disappointed because the casino asks them to do KYC. Some of them don't want to do KYC but that's the rules of the casino that must be fulfilled by its members, especially for those who use big money. So KYC is a way for the casino to know if there are members who want to launder their money at the casino so that the casino can prevent it before they can withdraw the money. And people who want to launder their money in the casino already know this, so maybe they are looking for other ways that won't require KYC.

As discussed by some people who are here if money laundering will be smarter like when a casino asks for KYC they will use other people's data or buy other people's data to do KYC and when buying KYC they will not buy carelessly of course money launderers know if depositing or withdrawing large amounts of money will later pass KYC level 3 or 4 so as to buy the data of people who can later pass KYC.
So there are many ways they can do it because money launderers have a lot of money they can do anything including cheating the casino with fake data.

[3kpk3]

I still believe that most money laundering activities still do happen via fiat-based transactions.
But we can't totally discard the idea that some of them are already happening in crypto casinos.
Some casinos are only requiring 1-5x wagering requirements before withdrawal, so yes, that would be easy to comply with.

Agreed. Money laundering is definitely happening in crypto gambling sites now and then despite all their restrictions based on what I observed. They are a lot smarter than we think basically.

It's almost impossible to stop them completely though they can be minimised through improvements to security protocols and rules regularly.

[n0ne]

I'm not sure how how is this happening around. Through some means there is big chance available to make untaxed money reach different destinations. In my country one incident took place and the police caught the people involved on the same day. The money involved is stolen money. Two persons have involved, they've played one on one match. Here one person losses and the other wins.

[goaldigger]

I still believe that most money laundering activities still do happen via fiat-based transactions.
But we can't totally discard the idea that some of them are already happening in crypto casinos.
Some casinos are only requiring 1-5x wagering requirements before withdrawal, so yes, that would be easy to comply with.

Agreed. Money laundering is definitely happening in crypto gambling sites now and then despite all their restrictions based on what I observed. They are a lot smarter than we think basically.

It's almost impossible to stop them completely though they can be minimised through improvements to security protocols and rules regularly.

They can easily buy someone’s information for the sake of KYC, so yes money laundering is still present and in crypto gambling there’s a big possibility for this. The site should strengthen their security, they should have more options to check the account and look for irregularities, if one category for laundering is present, they should start their investigations and freeze as well those account in connection of laundering.

[BenCodie]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

So does this mean that there is a loophole here and the money launderers can easily by pass this wagering requirement?

If someone joins a platform, makes a bet with the highest chance of winning and then creates a withdrawal, I am sure they would be questioned about the reason why they deposited in the first place.

There is also the variable that the site is rigged in a way. A 99℅ chance bet might be even more unlikely than what is advertised. That aside, if one bet loses, then all of a sudden the whole idea for the malicious user is no more, a huge loss is made instead.

Let anyone who disagrees try and learn the hard way. If you are just looking for privacy, use a privacy coin like Monero and/or use a mixer. There us no point locking yourself into a wagering restriction just for privacy, and I hope no one is doing that.

It should be noted to anyone as well that you can be questioned or ask for KYC no matter what kind of bets you make or when you withdraw. Many casinos lately are KYC'ing anyone they want, mostly with no justification.

[seleme]

There are methods to fight against money laundering and there are KYC, and AML rules on many gambling platforms for obvious reasons. If the gambler uses wagering methods to launder money, it is easily detectable by the system after withdrawing big amounts. So I doubt it is a good idea to use gambling sites for this purpose. There are other methods they use mostly NFT industry, AFAIK. Just my 2 cents.

[uneng]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

So does this mean that there is a loophole here and the money launderers can easily by pass this wagering requirement?

I disagree with this rule, because it's too intrusive towards the gambler. Maybe the gambler made a big deposit, gambled a little bit, was extremely lucky, made 10%-20% profit and want cashout his entire balance without gambling further.

By this rule, he can't. He is forced to continue playing and risking his own prize until wagering the deposit value once, with serious chances of finishing this task in loss.

Moreover, there isn't anything like safe bets to increase wagering statistics of the account. If there were, every gamblers would increase their ranks on virtual casinos for extra rewards and benefits.

[letteredhub]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

This kind of requirement by those gambling sites as measure to tackle money laundering also puts innocent and clean money owners using such gambling sites in a disadvantageous position. This creates a wide window of opportunity for the gambling site to gain much as chances are that large numbers of losses is highly possible, a ratio of 70:30. And this includes both normal gamblers monies and those of launderers.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

So does this mean that there is a loophole here and the money launderers can easily by pass this wagering requirement?

Those small odds doesn't guarantee you will win your bet as there are no easier or cheap odds in gambling, you just need to be lucky enough to pick the right odds with the right prediction else you would consistently be losing every wager you place.  We just got to avoid gambling sites that requires us to make wagering of total amounts in our account before we can make withdrawal, IMO, such requirement is far worse than that of kyc.

[harizen]

As we know that most gambling sites will require you to gamble and wager your whole balance once, before you can cash out or withdraw from the gambling site and they take this measure so people do not do money laundering whereby deposit and withdraw without gambling.

Correction, it doesn't need to wager the whole balance. Just a percentage of it e.g 20% of the deposit amount or in most cases, ranging from 1x to 2x turnover, etc. But honestly, just come to think of it, why users will just deposit an amount on that gambling site and then later on, will withdraw it without even playing? It's already alarming and will really lead to suspicious activity.

Aside from that, anything about AML policy is one of the requirements that a centralized gambling site should comply with. No choice but to follow.

Now the point here is that on the gambling site, there are many easy winning bets with odds like 1.01x etc. If the money lauder is sensible he can easily be wagering the whole amount by placing a few bets where the odds are very low and the winning chances are 99%.

It's a wrong mindset to think that odds like 1.01x is a sure win. If it does, you should have already seen that as an effective strategy on most sports bettors. Specifically referring to saving the ass on the purpose of doing money laundering, kind of risky for me to just bet on that kind of odds to make the plan succesful.

[Vaskiy]

There are methods to fight against money laundering and there are KYC, and AML rules on many gambling platforms for obvious reasons. If the gambler uses wagering methods to launder money, it is easily detectable by the system after withdrawing big amounts. So I doubt it is a good idea to use gambling sites for this purpose. There are other methods they use mostly NFT industry, AFAIK. Just my 2 cents.

Amidst all these technical things money laundering still continues through the gambling industry. There are gambling sites in which the insiders help with it for a big commission. This is very rare to find, apart from that we were able to see huge deposits that are converted to gambling chips and used. Later the same gets withdrawn, which is the common form practised all around. Whatever the restrictions, people continue to find loopholes and get into these kind of activities.