Money Launderers are Using iGaming Sites to Conceal Illicit Activities

FINTRAC, Canada’s financial intelligence agency, has issued a warning about the illegal laundering of money through iGaming sites that offer ways to conceal suspicious funds. In a recent newsletter, FINTRAC emphasized the “criminal exploitation” of unlicensed and legitimate digital betting operations. The popularity of online gambling has surged during the pandemic and the approval of single-event sports wagering in Canada during 2021 has increased its appeal.

The agency electronically transmits information from various industries to identify cash linked to illegal activities and shares intelligence about suspicious cases with law enforcement agencies. FINTRAC also examined reports of suspicious transactions linked to online gambling from 2016 to the previous year. It took into account estimates from international and domestic organizations, information from other financial intelligence agencies, and data from open sources to uncover patterns and trends.

The agency discovered that a common tactic was to buy vouchers or prepaid cards with suspected proceeds of crime, deposit the funds into bank accounts used for gambling, and then withdraw them under the disguise of cash winnings. Bank accounts were also used to distribute proceeds of crime through unlicensed and licensed gambling websites.

FINTRAC developed a catalog of potential signs of money laundering through online gambling websites, including the use of accounts solely for internet gambling without evidence of regular banking activities and excessive transactions with gambling websites that lack customer-knowing information.

Additionally, the agency warned about gambling websites that are not federally or provincially authorized, do not disclose ownership or jurisdiction details, and have no restrictions on the values and volumes of wagers. FINTRAC also noted that the gaming companies are often located in jurisdictions with weak anti-money laundering regimes and secretive banking practices, which facilitate money laundering activities.

The agency’s findings suggest that money laundering through online gambling sites is a growing concern and highlights the need for increased vigilance and regulation to prevent criminal exploitation of digital betting operations.