Singapore authorities have described the threat of money laundering activity taking place through the nation’s land-based casinos as “moderately high” but said the nature of gaming means the casinos are likely seen as a less attractive option to criminals than other sectors.
The nature of Singapore’s money laundering threats were outlined in a new report jointly released by the Ministry of Home Affairs, the Ministry of Law and the Monetary Authority of Singapore last week, which also found that online gambling gives greater cause for concern.
In assessing the threat posed by Singapore’s land-based casinos – Marina Bay Sands and Resorts World Sentosa – the report noted that casinos by their nature pose inherent money-laundering threats by way of patrons bringing in and using proceeds of crime in the casinos with the aim of layering and masking the origin of these proceeds of crime. It is also exacerbated by the cash intensity of the sector, and its ability to allow for the storage and movement of funds, including across borders.
“However, we have not encountered any instance where [Singapore’s] casinos were found to be directly complicit in money laundering activities in Singapore and have only observed a low number of cases where criminal proceeds were converted to casino chips for self-laundering purposes,” it said.
Most instances in which the casinos have filed a Suspicious Transaction Report, it says, did not relate to potential money laundering offences and instead involved a suspicion of offences under the Casino Control Act in response adverse news on casino patrons.
The report also outlined the reasons why money laundering by way of casinos is not necessarily an attractive option for criminals, who are more likely to use proceeds of crime for gambling rather than money laundering purposes.
“While there are money laundering risks posed by the casinos, the nature of gaming carries with it a possibility of loss of a significant proportion of criminals’ proceeds of crime as gaming outcomes are random and unpredictable,” it said. “This reduces the attractiveness of casinos being misused as a conduit for money laundering. Internationally, there are also suggestions that casinos may be less attractive to criminals as compared to other sectors, and where proceeds of crime enter casinos, they largely involve criminals spending the proceeds of crime for leisure, rather than as a means of ‘washing’ criminal funds.”
By comparison, online gambling carries a “higher degree of lucrativeness and higher tendency to be transnational in nature”, the report outlines, pointing to the recent high-profile US$3 billion money laundering case which saw around a dozen people arrested in Singapore in relation to illegal online gambling sites operating out of the Philippines.
“Despite strict laws and regulations against online gambling, and multi-pronged enforcement actions, syndicates are still able to conduct illegal online gambling activities due to the ease of setting up or shutting down of an illegal online gambling site,” it says. “The ability to host these illicit websites outside of Singapore makes clamping down on illegal gambling a challenge for law enforcement agencies.
“Syndicates are also able to use alternative payment methods such as cryptocurrencies and illegal payment platforms which make the detection of suspicious transactions or money tracing difficult.”
According to the report, foreign fraud, and particularly cyber fraud, pose some of the greatest money laundering threats in Singapore. It also pointed to the banking sector as one of concern.