Casinos are often accused of being a way for criminals to clean up their ill-gotten gains. The fight against money laundering is a high priority for many governments, and tightening financial regulations and rules for reporting suspicious transactions are just part of measures taken by many in the last few years. South African casinos have recently been criticised for not doing enough to prevent money laundering, a criticism they strongly refute. In May 2006 the European Commission stated in its Monitoring Report that casinos were not reporting enough questionable transactions.

Of course casinos are not the only target of the money launderers who cover a wide range of criminals. Once widely thought of as mostly a drug trafficking offence, money laundering activity is now associated with terrorist financiers, corrupt politicians, gangsters and businesses avoiding tax payments or hiding embezzled funds. Real estate and vehicle purchases are other much used methods of engineering legitimacy for large amounts of money from criminal sources. Romania, like many emerging markets, is presently attractive for money laundering because of loopholes in its laws and the high profits that can be gained.

Shell companies and local firms are often set up to launder money and such businesses as casinos, restaurants, bars or money exchanges can handle large cash transactions by reporting higher revenues than actual earnings. As Paolo Sartori, Interpol Liaison Officer in Romania, was quoted as saying in a report in ‘The Diplomat’ by Ana-Maria Smadeanu and Michael Bird, “It was hard for us at the beginning to insist and convince people in southeastern Europe that if we find a clean company that pays taxes and has no fiscal problems, that this could send out an alarm.”

A worrying indictment for all legitimate companies that pay their dues on time and keep their books in order! In 1999 Romania made money laundering a crime, but it is one difficult to prosecute when the onus of proof is on the state. Part of the Romanian constitution is the presumption of lawful acquirement of property. In the same year the US Department of State’s Bureau for International Narcotics and Law Enforcement Affairs published a report that included the claim that Internet gambling represents a ‘powerful vehicle for criminals to launder funds from illicit sources’.

The report also included a list of countries where money laundering was of primary concern. Both the United Kingdom and the USA were on the list, whereas Romania and South Africa were listed as being of concern. Seven years later many countries on those lists have strengthened their regulations against money laundering and some progress made in combating the activity. In Britain land-based casino operators must comply with strict controls to prevent money laundering, as will online casinos once licensed by the UK Gambling Commission. Betting shops remarkably have yet to be included in the same requirement to monitor transactions.
(E-12.01.06)

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