UN report claims black market operators in Southeast Asia are concealing criminal activities

A UN report has exposed a slew of criminal activity in South East Asia hidden by black market online casinos.

The report, prepared by the UN Office on Drugs and Crime (UNODC), highlighted money laundering and cyber fraud practices carried out through illegal casino operators.

The investigation revealed cases of money laundering through cash deposits and withdrawals, collusion between gamblers, junket financing and misuse of VIP accounts.

In the land-based sector, black market casinos also conduct ‘custodial transactions’, where players, including “those with apparent ties to organized crime”, can deposit casino chips for safekeeping with the relevant casino treasury departments and be cashed out later.

The report suggested that authorities have had difficulty tracking such transactions due to the large number of payment options available at online casinos, meaning it is difficult to prove a source of funds.

The problem is then compounded by what the report describes as a “non-face-to-face element, minimal or no compliance staff, and huge and complex volumes of transactions and financial flows, which are often international in nature”.

Cryptocurrency transactions, which are even harder to trace, have also risen in parts of Southeast Asia, partly because the Chinese government banned the practice in 2021.

The report additionally claimed that criminal organizations have taken advantage of the region’s high youth unemployment rate.

This has led to criminals recruiting young people en masse to carry out cyber fraud operations “using the promise of lucrative employment and professionalized recruitment schemes, often using social media platforms such as Telegram, WeChat, TikTok and Facebook”.

Masood Karimipour, UNODC Regional Representative for Southeast Asia and the Pacific, said: “Organized crime groups are converging and exploiting vulnerabilities, and the evolving situation is rapidly outpacing the ability of governments to contain it.

“By taking advantage of technological advances, criminal groups are producing larger-scale and harder-to-detect fraud, money laundering, underground banking and online scams.

“This has led to the creation of a criminal services economy, and the region has now become a major testing ground for transnational criminal networks looking to expand their influence and diversify into new industries.”

The UN estimates that these practices allow criminal gangs to “move, launder and integrate billions in criminal proceeds into the financial system without accountability.”

The UNODC report recommends that countries in the region conduct an in-depth analysis of online gambling platforms and their link to money laundering.

Other points of advice included working together to gain a better understanding of how money moves illegally between countries and better monitoring criminal organizations and forums where criminal activities are discussed.

Further recommendations suggested the development of national action plans to tackle organized crime and the implementation of specific legislation on online gambling platforms and money laundering.

Karimipour added: “It is more important than ever that governments recognize the severity, scale and scope of this truly global threat, and prioritize solutions that address the region’s rapidly evolving criminal ecosystem.”

Earlier this week, the Betting and Gaming Council (BGC) published its International Best Practice Guide for operators and policymakers worldwide.

The UN report alleges that black market operators in Southeast Asia are concealing criminal activities, and first appeared on EGR Intel.