Loophole in stopping Money Laundering through Wagering

[AmoreJaz]

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 Later the same gets withdrawn, which is the common form practised all around.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.

if the site is strict in complying with the regulations regarding AML+KYC, they can easily catch a gambler who is using the site for money laundering purposes. they can actually see the large deposits and the games history of the person and their withdrawal frequencies. that is, if the site cares for their compliance, but if not, people can easily get away with it.

[n0ne]

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 Later the same gets withdrawn, which is the common form practised all around.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.

if the site is strict in complying with the regulations regarding AML+KYC, they can easily catch a gambler who is using the site for money laundering purposes. they can actually see the large deposits and the games history of the person and their withdrawal frequencies. that is, if the site cares for their compliance, but if not, people can easily get away with it.

Gambling platforms can't easily make a statement on a person for money laundering. The deposit and withdrawal frequencies can be considered as a reason, but the same can be requested for clarification as Whale gamblers usually deposit and withdraw huge funds. Making a tag of money laundering on those gamblers will surely create some negative impression over the platform from the Whale players. This could affect the business, so platforms handle it in a much smoother way.

[GxSTxV]

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 it's a loophole, then all people must have thought about it besides the casino team itself. therefor they surely won't allow anyone to use this method to escape and trick the requirements and prevent money laundering systems. Wagering requirements are usually imposed only on large funds and deposits (legit casinos at least) not small amounts. And Logically nobody would attempt to launder a sum as low as $100 or $200 in a casino.
beside that risking more than $1000 in a casino and regardless of the winning percentage (as long as it's not 100%), should be enough to avoid money laundering especially for large sums of money. But nowadays there are other loopholes available to evade these rules and law enforcement which only few people knows them.

[serjent05]

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 it's a loophole, then all people must have thought about it besides the casino team itself. therefor they surely won't allow anyone to use this method to escape and trick the requirements and prevent money laundering systems. Wagering requirements are usually imposed only on large funds and deposits (legit casinos at least) not small amounts. And Logically nobody would attempt to launder a sum as low as $100 or $200 in a casino.
beside that risking more than $1000 in a casino and regardless of the winning percentage (as long as it's not 100%), should be enough to avoid money laundering especially for large sums of money. But nowadays there are other loopholes available to evade these rules and law enforcement which only few people knows them.

People had been using casinos to wash the history of their money whether they intend to launder money or not.  The casino had made aware of these actions and intentions reason why they setup the initial steps in combating this money laundering by requiring players to wager at least 1x (this differs in every casino).  the casino also implements a list of things that will trigger the security for money laundering.   

[khaled0111]

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.

I always wonder, if the casino really cares about AML policies and want to comply with regulations and if they really want to prevent illigal activities such as money laundry then why they don't enforce kyc on registration before making any deposit. By doing this, no user will complain about being cheated.
The wagering requirement is a totally different matter. It's main purpose is to make the customer lose as much as possible and there is nothing wrong about that, BTW. Just my opinion.

[arwin100]

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.

I always wonder, if the casino really cares about AML policies and want to comply with regulations and if they really want to prevent illigal activities such as money laundry then why they don't enforce kyc on registration before making any deposit. By doing this, no user will complain about being cheated.
The wagering requirement is a totally different matter. It's main purpose is to make the customer lose as much as possible and there is nothing wrong about that, BTW. Just my opinion.

That is the lapses of the implementation since they could really do that so the users could be aware and no complain will happen in long run. But maybe they are afraid that users will go away because they don't like this implementation but rather go with this requirements since the user will don't have a choice but to comply so thag they can withdraw their funds or continue to play on their casino.

Wager requirements is I think not enough since scammers could just meet the wager requirement and withdraw the funds they had stolen to the user so its best to have Kyc and wager required to drive away those money laundering on casinos.

[ethereumhunter]

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.

Money launderers or people who want to do something with the money they get from the proceeds of their crime can solve the KYC problem, which is the obligation of a member on gambling sites or on exchange sites, or other sites. They are very familiar with KYC and also have sources that can provide valid data for KYC. This case reminds me of credit card crimes many years ago where a hacker who has valid credit card data will sell to people who need it and it is they who use their credit card to buy the things they want.

With today's technological advances, money launderers or people committing other crimes can continue their business and maybe even get bigger. They can seek and get what they want, so it keeps them from getting into trouble unless they get caught by the government or regulators.

[qwertyup23]

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?

This is interesting- so they can circumvent the requirement of wagering your whole balance before you can cash out/withdraw their funds in the gambling website? Hmm, maybe gambling websites and ushers can provide or at least monitor the amount of money being transferred from one account to another vs the amount they betted.

Though this may be the case, I do think that this is a grey area that needs to be discussed. Money laundering is something that has been consistently done and people are looking for alternatives and ways to circumvent the law and continue it.

[tusandii]

With today's technological advances, money launderers or people committing other crimes can continue their business and maybe even get bigger. They can seek and get what they want, so it keeps them from getting into trouble unless they get caught by the government or regulators.

Precisely with the development of more advanced technology, the government or law enforcement can trace sources of funds and money laundering activities more quickly.
Nowadays there are not a few tools that are used to be able to hack all forms of money circulation activities and that is why many money laundering cases can be solved and the perpetrators arrested.
Even in my country there are several cases of corruption that use crypto as a place to destroy evidence and in the end the law enforcement authorities can track and find all assets resulting from corruption to be used as evidence of the crime.

[Negotiation]

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.

I agree but apart from these it is very difficult to fight money laundering in online gambling. For this reason, many organizations have taken the initiative to amend the law to stop online gambling and consider gambling as a money laundering offense but it has not been possible. Many people hide their information in online gambling, so even if there are restrictions, it is not in reality. The main reason for entering into this kind of activity is that greed works in them they get more money for deposits and interest rates.

[Fivestar4everMVP]

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.

if the site is strict in complying with the regulations regarding AML+KYC, they can easily catch a gambler who is using the site for money laundering purposes. they can actually see the large deposits and the games history of the person and their withdrawal frequencies. that is, if the site cares for their compliance, but if not, people can easily get away with it.

Except it's a casino that does not have a wager requirement in place to go with kyc and any other type of necessarily verifications, then such casinos may likely be harboring launderias without even knowing.
I say this because, this days, kyc verification alone is no longer enough to be able to catch  those using the casino as a means to launder money., many supposed gamblers today use fake ID for verification, some use id's belonging to other people they may or may not know. So one of the most effective way of discouraging launders or scaring them away from from your casino is through the wager requirement, even though this feature most times end up hurting innocent gamblers.

[Rating Place]

It's not possible to do because of the amount of money someone would have to bet at 1.01. A person would need to bet $1,000,000 to launder $10,000. No one is going to do that and if a person tries to cashout $1,010,000 there is going to be KYC.

[Fivestar4everMVP]

It's not possible to do because of the amount of money someone would have to bet at 1.01. A person would need to bet $1,000,000 to launder $10,000. No one is going to do that and if a person tries to cashout $1,010,000 there is going to be KYC.

Well, the kyc thing aside, let's assume the casino in question do not trust in kyc like myself..
You already said it all when you said a person will need to bet $1m to launder $10k, no body in their right frame of mind will do such, that is risk a whole $1m dollars just to win $10,000 dollars, which they know that their chances of winning or losing it 50/50 percent, the chances of losing that money might even be higher from the chances of winning depending on the odds of the game.

Only one time have I come across a discussion on this forum on someone who wagered $1.4million dollar on a game with an odd of 1.01+, to make an extra $11k + if he wins, but unfortunately, he lost the game as well as the money to the casino, this tells how risky it is to take such risk.

[3kpk3]

It's not possible to do because of the amount of money someone would have to bet at 1.01. A person would need to bet $1,000,000 to launder $10,000. No one is going to do that and if a person tries to cashout $1,010,000 there is going to be KYC.

Money launderers come up with creative ways all the time to launder their funds. For example, they can simply launder small amounts again and again despite losing some funds to due to the house edge factor in order to bypass what you mentioned.

Only one time have I come across a discussion on this forum on someone who wagered $1.4million dollar on a game with an odd of 1.01+, to make an extra $11k + if he wins, but unfortunately, he lost the game as well as the money to the casino, this tells how risky it is to take such risk.

I remember that story since it happened very recently. It wasn't 1.01 odds actually. The actual odds were even lower than 1.01 which makes this loss even more worse.

He was most probably a whale based on my research.

[darkangel11]

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.

OK. Does it mean that we can use anything as money, as long as that item transfers value? Let's say I agree to drive my neighbor to the mechanic and back and he pays me with fuel. We agree that he gives me dishwasher tablets, does that count as money? The tablets transferred value from him to me without a third party.

If me and my friend both have accounts in an RPG game like WoW or EVE and we use game credits to pay each other, does that count as money? If I pay him for weed by sending him credits in game, did I, according to the law, buy illegal goods, or did I barter for it?

Both bitcoin and game currencies aren't officially recognized anywhere in the world as a legal form of payment, apart from El Salvador and Central African Republic, if I'm not wrong.

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.

So, all assets can be laundered... Are you aware that real estate is an asset? How can you launder a building?

[piebeyb]

It's not possible to do because of the amount of money someone would have to bet at 1.01. A person would need to bet $1,000,000 to launder $10,000. No one is going to do that and if a person tries to cashout $1,010,000 there is going to be KYC.

Money launderers come up with creative ways all the time to launder their funds. For example, they can simply launder small amounts again and again despite losing some funds to due to the house edge factor in order to bypass what you mentioned.

Whoever they are will definitely find loopholes but remember there is always a risk when doing things that are actually prohibited by the casino so money can be frozen if you don't complete KYC or for example provide proof of the results of the funds themselves, so don't ever try to find loopholes for that even though there are people who did it his way, but not a few also caught red-handed.

Casinos always have rules that must be respected by their customers, so it's best to obey those rules without having to look for loopholes to do something that has been banned, money laundering is an act that is not good, maybe I will give a little advice to anyone not to do that because our money can be frozen at any time by the casino. I'm sure the system in the casino will detect that.

[Hispo]

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.

Now you mention it, I have read around the internet from people who did not think in a very favorable way about the NFTs, that the whole ecosystem of non fungible tokens was surging because it was being used to launder assets. To me it did not make much sense back then, because I assumed it was all about speculation and just people getting to excited on this new use of the blockchain of Ethereum and other altcoins.

However, I know understand how it would work. Climinals get altcoins for cash and then they buy NFTs which have absurd prices, they speculate a bit with them, perhaps even getting some profit out of it. Once they are done, they move back the value to altcoins and back to money, in the eyes of an outsider, the money came from NFT speculation and not from illicit activities.

[iv4n]

It's not possible to do because of the amount of money someone would have to bet at 1.01. A person would need to bet $1,000,000 to launder $10,000. No one is going to do that and if a person tries to cashout $1,010,000 there is going to be KYC.

I think it's easy to spot an abuser... especially over a long period of time. Simply by checking all the relevant factors, deposits/withdrawals, and on-site bets. And casinos probably have some "special techniques" for catching people in their trying to cheat the system.

This can be a "loophole", but people who engage in this stuff risk their accounts and the money they have on the site. Probably the same people come here to complain when they get busted.

[Hispo]

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.

OK. Does it mean that we can use anything as money, as long as that item transfers value? Let's say I agree to drive my neighbor to the mechanic and back and he pays me with fuel. We agree that he gives me dishwasher tablets, does that count as money? The tablets transferred value from him to me without a third party.

If me and my friend both have accounts in an RPG game like WoW or EVE and we use game credits to pay each other, does that count as money? If I pay him for weed by sending him credits in game, did I, according to the law, buy illegal goods, or did I barter for it?

Both bitcoin and game currencies aren't officially recognized anywhere in the world as a legal form of payment, apart from El Salvador and Central African Republic, if I'm not wrong.

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.

So, all assets can be laundered... Are you aware that real estate is an asset? How can you launder a building?

That is why I said it depends whom you ask whether Bitcoin is money or not.
To many Bitcoin is an asset trying to be money, to others is money which has become an asset. Before FIAT and banknote was invented gold and silver were money (golden and silver coins).

Also, when we talk about assets as houses, real state or even goods like cars and similar ones which do not have so much liquidity as Bitcoin does, I am pretty sure that criminals have used real state to launder money, the illicit asset itself is not the property but the property can be used as a tool to store value which was already laundered.

Again, it depends whom you ask. We could further dive into this topic but I am afraid we would be derailing a lil bit too much this thread.

[Bushdark]

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.

I always wonder, if the casino really cares about AML policies and want to comply with regulations and if they really want to prevent illigal activities such as money laundry then why they don't enforce kyc on registration before making any deposit. By doing this, no user will complain about being cheated.
The wagering requirement is a totally different matter. It's main purpose is to make the customer lose as much as possible and there is nothing wrong about that, BTW. Just my opinion.

If all casinos start enforcing KYC on there customers then many if them will lose customers because many of the people that are gambling frequently on casinos might not even be up to the age that are expected to gamble why others might decided to leave gambling because they are not ready to exposed there identities to online casinos. KYC is a tools the government can use to fight casinos which will make them to lose the kind of traffics they've been having on a daily basis. There are lost of underaged gamblers that are making use of different non KYC casinos because there is no restrictions to there gambling activities.