For years the United States government has expressed concerns that online gambling sites could be used to facilitate money laundering. In the UK a report claimed that online gambling sites could be used by criminals to launder money by paying the illicit funds as winnings. The report also claims that gambling sites could be hijacked by criminals who could then use gambling accounts to hide dirty money. Recently several European politicians and experts expressed unanimous opinions that they do not see online gambling as an attractive method for money laundering.
Dr. Friedrich Schneider, a Professor of Economics at Johannes-Kepler-University in Linz Austria, argued that criminals and organized crime groups would not find online gambling sites an attractive medium for laundering money because the sites cannot process large transactions. Because of EU regulations that regulate internet gambling transactions any irregularities would be quickly uncovered. European experts based their opinions on the strict European anti-money laundering regulations already in place. Regulations require that operators must verify a customer’s identity, use sophisticated monitoring and record keeping software.
In most European licensing jurisdictions operators must have their record open for inspection by authorities. Game software is subject to random inspections. Software used by internet gaming operators is capable of tracing all transactions making money laundering difficult or impossible. All gambling transactions taking place online must make use of a licensed bank’s services. The bank is required to monitor the funds that pass through their systems and report any suspicious transactions or money transfers. These measures are required by the EU Anti-Money Laundering Directives of the European Commission.
Early on the UK realized them potential for money laundering and criminal activity and has taken measures to prevent using internet gambling sites for criminal activities or financing terrorist groups. The UK Gambling Commission has stringent measures in place that all licensed internet gaming operators must adhere to. Operators are required to investigate and report and violations and noncompliance is considered to be a criminal offense. European operators have used their years of experience to create regulations that prevent any form of criminal activity from taking place.