FINTRAC report cautions online gambling is ripe for money laundering

Highlights how money is being manipulated

Canada’s Financial Transactions and Reports Analysis Centre (Fintrac) has issued a bulletin highlighting the increasing risk of money laundering through online gambling sites.

Fintrac’s release, based on an analysis of suspicious transaction reports related to online gambling from 2016 to 2023, reveals significant findings.

“Online gambling sites offer prospective money launderers opportunities to conceal the source of their funds by using multiple different deposit and withdrawal methods,” it notes.

The report identifies a common money laundering method involving prepaid cards or vouchers, stating:

“A commonly observed typology involved the purchase of prepaid cards/vouchers using suspected proceeds of crime, which were used to deposit funds into gambling accounts, followed by withdrawals through wire or e-transfer to a Canadian bank account under the guise of gambling winnings.”

Furthermore, the bulletin points out the vulnerability of bank accounts in the laundering process.

“Bank accounts provide a crucial step in the placement and layering of proceeds of crime through licensed and unlicensed online gambling sites,” it states, underscoring the role of banking systems in laundering.

In one example, Fintrac mentions, “an organized crime group laundered proceeds of crime by operating an unlicensed gambling site through the accounts of unrelated businesses,” showing the sophisticated methods employed by criminal organizations to exploit online gambling platforms.

The bulletin also offers a detailed list of indicators for detecting money laundering through online gambling, advising financial entities to be vigilant for accounts used exclusively for online gambling and for excessive transactions with gambling sites lacking proper regulatory compliance.

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