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Online gambling most unlikely to be involved in money laundering

Online gambling most unlikely to be involved in money laundering The opponents of online gambling will often cite the money laundering possibility as their strongest suit in the fight to criminalize wagers over the Internet, but a cool-headed look into the topic will quickly show that this claim has no ground. Over and over again politicians and public activists who are against online gambling will tell people that online gambling makes it easy for criminal organizations to launder their dirty money, but let's look into this claim to see how close or far from the truth it is.

 The point many anti online gambling activists make is simple - because online gambling is often unregulated criminals can and are taking advantage to launder their money; chances are you have heard this argument before. And on first look it makes sense to some people, why not, online gambling is not regulated and obviously moneys flow out of the reach of authorities. Sure online gambling can be used to launder money - if you are a moron criminal! Let's read the argument again: "...because online gambling is often unregulated criminals can and are taking advantage to launder their money" - how does that even make any sense? The point of laundering money is to take the money you have received from an illegal enterprise and run them through a legal enterprise in order to "clean them". And what those people tell you is that criminals will take the money from an illegal activity and run them through the unregulated and illegal enterprise of online gambling (remember, operating an online gambling website in the U.S. is illegal) as a form of money laundering!?! That's just like cleaning your racketeering money by running a prostitution ring. Not to mention that online gambling is likely the most scrutinized form of ecommerce, so laundering money through the online casino is just plain stupid.

 Also, let's not forget that online gambling is not really that shady, distant activity veiled by secrecy. Unlike the brick-and-mortar casino gambling, when gambling online you cannot use cash but a credit card or a checking account. Everyone who has seen a few Mafia movies will tell you that cash-based businesses are the preferred choice of the criminals to launder money. Why? Because there is no trace left - cash is cash and there is no proof who it came from and what was the actual amount involved.  Where with credit cards at the online casinos there is plenty of traces left, not to mention that most of the money needed to be laundered are in cash form and as we already said - you cannot take your bundle of $100s from drug dealing and deposit them at an online casino - you have to have a bank account first. On the other side you can easily enter an offline casino and gamble with illicit money. Just play a few $1,000 hands at the blackjack table cash your chips and pay the taxes on your "casino winnings".

 And finally, keep in mind that even if there is some small chance of money laundering through online gambling, the constant fight against legalization and regulation will only make those possibilities bigger. This itself was admitted by the U.S. General Accounting Office in a report published all the way back in 2002: "Industry gaming officials also cautioned that, in their view, Internet gambling could become more susceptible to money laundering as U.S. financial institutions continue to block the payment of Internet gambling activities through credit cards. They explained that credit cards would likely be replaced by newer forms of electronic payments that might not be subject to the same level of record keeping or transaction limits as credit cards and could thus be more susceptible to money laundering."[1] Obviously years ago someone with a brain figured out that regulation is much better deterrent of illegal activity in what is essentially a form of entertainment. Many countries in Europe have already legalized online gambling, which has helped control gambling addiction, generate taxes otherwise lost and of course, prevent illegal activities. In the U.K., online gambling companies such as Bet365 have a great incentive to be aware of possible money laundering and bet-fixing, since the company doesn't want to lose its gambling license and all the profits they make legally. But in the U.S. for as long as fear-mongering is the preferred way, changes in a positive direction are unlikely.

 Published on 02/09/2010

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