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Online Bookmakers Favoured by Money Launderers Says ACIC

Thu, Aug 31, 4:38pm by Staff Writer

According to the newly formed Australian Criminal Intelligence Commission (ACIC), organised crime elements are using online betting sites to launder money.

In a report titled Organised Crime in Australia: 2017, the ACIC listed sports betting – and specifically wagers placed through online bookies based offshore – as a prime vehicle for money laundering activity.

And according to the report, the links between offshore sportsbooks and criminality go deeper than rogue customers abusing the system:

“Several international organised crime groups are direct owners of online bookmakers.

Multiple opportunities exist for domestic and international criminals to utilise online bookmakers to launder proceeds of crime and profit from the corruption of sporting and racing events.

This includes the capacity to bet large amounts of money anonymously through offshore bookmakers.”

The ACIC was formed in July of last year, by combining the Australian Crime Commission (ACC) and CrimTrac agencies as one, while bringing research data from the Australian Institute of Criminology (AIC) into the fold.

Prior to the reorganisation, the ACC published a similar report titled Organised Crime in Australia: 2015.

This year’s update pegs the cost of organised crime throughout Australia at AUD$36 billion per year – enough for a AUD$1,561 surcharge applied to every Australian citizen.

Per the report, online sports betting is just one of several money laundering methods employed by organised crime, along with illicit banking schemes and credit card fraud.

But while those tools were merely given mention, sports betting occupies an entire section within the report.

The ACIC revealed that even those online sportsbooks and betting sites which are legitimate in nature – such as the U.K.-based William Hill, Bet365, and Betway – still manage to enable money laundering through the industrywide trend of offshore operation:

“Bookmakers operating online wagering platforms are increasingly basing their operations in jurisdictions where regulation and oversight of gambling activities ranges from minimal to completely absent.”

As the ACIC states, the inability of Australian regulators to achieve effective oversight of offshore betting sites has exacerbated the problem:

“Online bookmakers offer a vast array of wagering products on sport and racing events to a global customer base, including gamblers in Australia.

The capacity of Australian regulatory agencies to effectively monitor gambling through domestic licensing and regulatory arrangements has been significantly impacted by the shift to the online domain.”

The most popular way of exploiting offshore betting platforms for the purposes of money laundering is through credit card fraud.

Specifically, the ACIC cites a method known as “card not present” fraud, in which criminals use stolen cards or card information to gain access to online betting accounts:

“The Australian Payments Network (APN) attributes 77 per cent of all fraud on Australian cards to card-not-present (CNP) fraud.

CNP fraud occurs when card details are fraudulently used to make purchases or other payments without the card, via phone or online shopping, betting and/or gaming platforms or other websites of a similar nature.”

The rise of offshore betting sites, which have long operated in violation of Australian law, has prompted the federal government to explore countermeasures – mainly through the passage of stricter laws via the Interactive Gambling Amendment Bill (IGAB) of 2016.

Earlier this month, Minister for Human Services Alan Tudge told The Australian that the IGAB was designed to curtail the very same illicit activity documented by the ACIC:

“We are presently losing hundreds of millions of dollars to illegal offshore gambling providers, some of which are connected to crime syndicates.

These changes will help keep this money in Australia.”

A report released last week by the Department of Business and Consumer Services (DBCS) revealed that domestic pokie machine revenue fell from AUD$680 million during the 2016-17 fiscal year. The DBCS attributed the reduction, which puts pokie performance at its lowest point since 2002, to the proliferation of offshore gambling options.

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