As a business which by its very nature deals in sudden windfalls, gambling of all stripes, has long presented a near-perfect disguise for ill-gotten gains, writes Grace Graham-Taylor.
Movies like Martin Scorsese’s 1995 epic, “Casino”, based on Nicholas Pileggi’s nonfiction exploration of “Love and Honor in Las Vegas”, have cemented the image of the high-rolling gangster using betting houses as a front for criminal enterprise, easily evading authorities by slipping stacks of tax-free cash between players’ fluctuating luck.
But since the start of this century, the centre of gravity for illicit gambling has, inexorably, shifted eastward from Vegas, finding a new home in Southeast Asia.
Driven largely by the appetite for online betting services in China, the illegal iGaming trade is flourishing across the region.
According to a recent (2024) report by the United Nations Office on Drugs and Crime (UNODC)–“Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat”–, billions of dollars are being laundered every year through illegal online betting sites, often owned by Chinese interests with direct links to organised crime, the notorious Triads.
Cyberfraud
China–-indeed the gambling industry–has a gambling problem with global consequences
Operating out of countries such as Myanmar, Cambodia and the Philippines, where regulations surrounding gambling licenses are comparatively lax, online betting sites are targeting and defrauding millions of Chinese and global citizens, while many supposed online casinos serve as fronts for drug trafficking, people smuggling, and cyberfraud.
Although gambling is illegal in China, it remains a highly popular pastime.
Overall, players from Greater China are estimated to account for more than half of the world’s illegal gambling economy.
Online betting sites are estimated to generate around one trillion Yuan (US$139 billion/£111.8bn) per year from mainland Chinese residents.
But as the COVID-19 pandemic prevented tourist gamblers from travelling, and the government cracked down on junket gambling, illegal online betting sites proliferated in their place.
Scandal
With them came organised, Triad, crime.
“Many illegal online casinos in Southeast Asia have diversified their business lines into cyberfraud operations, with extensive evidence of infiltration of organized crime within casinos [for] the purposes of concealing various illicit activities,” states the UNODC report.
And the scale of the problem is highlighted by a recent scandal that erupted in the sleepy Filipino town of Bamban, which implicated the town’s mayor Alice Guo, now held in custody.
In an investigation carried out last year, a licensed gambling firm owned by Guo and her Chinese partners was found to be acting as a front for an international cyberfraud enterprise.
Using more than 800 trafficked workers, most of whom were Chinese, the gambling firm, trading under the name Hongsheng Gaming Technology Inc. (later renamed as Zun Yuan Technology Inc) brought in more than US$£200 million (£201.54m) to the bank accounts of the company and Ms. Guo — money which was later transferred out to other businesses with Chinese addresses.
The case has also been linked to a multi-billion-dollar money laundering investigation in Singapore, where Guo has known associates, while Guo herself has been exposed as not Filipina at all, but in fact a Chinese national.
Guo’s casino was able to operate thanks to a Philippines off-shore POGO license, awarded by the Philippine Amusement and Gaming Corporation, a regulatory body operated by the government.
These licenses have now been outlawed, with President Ferdinand “Bongbong” Marcos Jr. ordering the closure of all POGO-licensed establishments by the end of last year.
Yabo
China is also hoping to work with ASEAN nations, among them Thailand and Myanmar, to further tackle illicit online gambling systems.
But the problem remains nebulous and intractable.
Tendrils of these criminal organisations extend far beyond the Asiatic region, meaning that without serious international cooperation they will likely be impossible to stamp out.
A report published by US-based cybersecurity firm Infoblox last year exposed how complex the systems used by illegal gambling operators can be.
Their detailed study showed how a single China-based group, known as Yabo, uses an intricate web of technologies, shell companies and white label providers to operate possibly hundreds of betting franchises, all of which have ties to China’s underworld and are staffed by trafficked labour.
Cloaking themselves under a white label company called TGP Europe, which was licensed in the Isle of Man, the Yabo group was even able to secure sponsorship deals with major European football clubs, including teams in the Premier League, worth hundreds of millions of dollars.
In 2023 the U.K. Gambling Commission, which oversees the Isle of Man’s gambling industry, fined TGP Europe a relatively paltry £316,250 (US$393,500) after its links to Yabo were uncovered, which is practically a kiss on the cheek, let alone a slap on the wrist.
The identity of the Yabo group remains unknown.
But as the case of Yabo shows, China’s illegal gambling industry is not just a localised or regional problem, but a globalised one.
The views expressed in this article are singular, and not necessarily shared by iGamingFuture
