Inside Southeast Asia’s Casinoland: the ‘underground bank’ at the centre of transnational crime

Criminal networks in the region see casinos as the new banks, allowing them to launder money on a vast scale away from scrutiny and law enforcement

Despite major crackdowns, a UN report says money-laundering networks are still stitched throughout Southeast Asia and are now much harder to trace

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Traffic goes past a casino in Mongla, Special Region Four, in Myanmar’s eastern Shan State. In Asia’s thriving underground economy, there are billions of dollars needing to be cleaned, from the Mekong’s drug gangs, human trafficking networks to the world-dominating cyber scams. Photo: AFP

Published: 2:30pm, 20 Jan 2024Updated: 2:34pm, 20 Jan 2024

At any moment in the border towns of Myanmar, Cambodia and Laos, a bet is being laid in person, online or over the phone. Win or lose, it’s odds-on that someone at the table is washing dirty money, United Nations security experts say.

And in Asia’s thriving underground economy, there are billions of dollars needing to be cleaned, from the Mekong’s drug gangs, human trafficking networks to the world-dominating cyber scams. All of those create pools of illegally juiced profits which need to be cleaned, moved or repurposed into the real economy, often through cryptocurrency or property.

To the criminal networks, the region’s casinos are the new banks, allowing them to launder money on a vast scale away from scrutiny and with little likelihood of law enforcement catching up with them, according to a report released this week by the UN Office on Drugs and Crime (UNODC), which has carried out extensive research on the issue.

Traffic goes past the Kings Romans Chinese-owned casino in Ton Pheung, a special economic zone set in northwestern Laos along the Mekong river, at the border with Thailand and Myanmar. Photo: AFP

Organised crime has created a “parallel banking system by leveraging new technologies and the proliferation of loosely or entirely unregulated online casinos together with crypto,” said Benedikt Hofmann, deputy regional director of the UNODC. “And governments have struggled to keep up.”

China, whose nationals use the casinos in lawless areas of bordering nations, has cracked down on the big money junket operators – most spectacularly jailing Macau gambling kingpin Alvin Chau and associates for a reported HK$824 billion (US$105 billion) in illegal bets through Suncity.

But the UN says money-laundering networks are still stitched throughout Southeast Asia and now much harder to trace with the widespread use of cryptocurrencies, in particular USDT, or Tether.

“Most countries in the region pay virtually no attention to casino junket operators and other VIP tour companies,” said the report, titled “Casinos, Money Laundering, Underground Banking and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerated Threat”.

The Chinatown Kings Romans casino-hotel in Laos’ Golden Triangle Special Economic Zone. China, whose nationals use the casinos in lawless areas of bordering nations, has cracked down on the big money junket operators. Photo: Nathan Paul Southern

Inside Southeast Asia’s Casinoland: the ‘underground bank’ at the centre of transnational crime

Criminal networks in the region see casinos as the new banks, allowing them to launder money on a vast scale away from scrutiny and law enforcement Despite major crackdowns, a UN report says money-laundering networks are still stitched throughout Southeast Asia and are now much harder to trace

Criminal networks in the region see casinos as the new banks, allowing them to launder money on a vast scale away from scrutiny and law enforcement

Despite major crackdowns, a UN report says money-laundering networks are still stitched throughout Southeast Asia and are now much harder to trace