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UK To Crackdown On Money Laundering Via Online Casinos

Robert Lee, Tax-news.com, London

13 December 2000


According to a recent report in the Hong Kong Standard's online newspaper, the UK government is to embark on a crackdown on money laundering through Internet gaming sites, and it is to focus on the offshore operations which are multiplying fast and furiously, particularly in the Caribbean and in other jurisdicitions with lax regulation, such as Cost Rica. The Hong Kong paper quotes a British government official as saying: 'This is a relatively new area and one which causes us great concern. We are looking into it in a number of jurisdictions.'

It's easy to see how offshore gaming sites might be used to facilitate the passage of illicit funds. It's a fact that regulation is a lot less tight than it is, for example, in the US. Many casinos ask no questions and do not implement due diligence procedures. The report from Hong Kong quotes a UK source close to the fight against money laundering: 'After placing your bets you decide you are a changed person and no longer want to gamble. Then you get them to send you a refund cheque. They will send out a cheque or bankers draft made payable to whoever you want.'

According to the undisclosed source, the main cause of concern currently is Antigua, which boasts dozens of online gaming sites but, in all fairness, has made significant attempts to bolster its anti-money laundering systems. A British task force visited the island in October and warned that although it was taking steps to tighten up on regulation 'the offshore gaming industry in Antigua was still perceived to pose a high risk to the integrity of the global financial system.'

Costa Rica, too, gives cause for concern. Online gaming sites have proliferated there recently, leading the country to be labelled a "Virtual Vegas". However, plans are afoot to create mandatory industry licensing and more rigid regulation. Costa Rica does not want to completely eliminate its offshore gaming industry, and its plans to introduce tighter rules should please the UK and international agencies such as the Financial Action Task Force.

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