Online Poker and Money Laundering
Money laundering is the process of making illegally-gained proceeds (i.e. “dirty money”) appear legal (i.e. “clean”). Online poker, as with any online gambling platform, is susceptible to money laundering activities due to the anonymity and cross-border accessibility it offers.
Criminals may use online poker sites to launder money by transferring funds from illegal activities into the poker site, then using those funds to play and potentially withdraw “clean” money. They may also use techniques such as chip-dumping (intentionally losing to another player in order to transfer money) or using multiple accounts to move money around.
Combat money laundering
To combat money laundering, online poker sites are required to implement strict know-your-customer (KYC) and anti-money laundering (AML) regulations. This typically includes verifying a player's identity, monitoring for suspicious activity, and reporting suspicious transactions to the relevant authorities.
It's important to note that while online poker sites may be vulnerable to money laundering, the vast majority of players do not engage in such illegal activity and the industry as a whole works to prevent it.
News Article on it
Political and legal fears that online poker is a high risk area in terms of money laundering may be exaggerated, appears to be the conclusion of a new academic study commissioned from the department of economics at Johannes Kepler University in Linz, Austria and the International Research Institute for Gambling and Gaming in Bonn, Germany.
The study was commissioned by TÜV Trust IT GmbH Unternehmens-gruppe TUV Austria, to define standardized testing criteria to make it easier to supervise gambling services providers, both technically and in terms of financial regulation.
Researchers Prof. Dr. DDr. h.c. Friedrich Schneider, Prof. Dr. Dr. Franz W. Peren and Prof. Dr. Reiner Clement formed a set of recommended measures to reduce further the risk of money laundering, and concluded in their report “Online Poker: Possible Money Laundering and its Prevention” that the risk of money laundering through online poker websites was mitigated by the sophisticated tracking and other protective measures adopted by many operators.
Money Laundering Study
The study claims that Germany has already developed into the world’s second-largest market for online poker, and that political discussion in Germany and the EU has repeatedly associated the sector , with regulatory measures introduced to ban its legal offer on the Internet.
On the other hand, the researchers observe, MEP Ashley Fox, the European Parliament rapporteur on online gaming in the internal market, has pointed out that online games of chance are a cashless service and that the “electronic fingerprint” makes it easy to track the activities of players and providers.
Online gambling providers licensed in Germany, including the 23 licensed online poker and casino operators in Schleswig-Holstein, are among those covered by German money laundering prevention laws and are therefore required to meet the due diligence obligation laid down in the Money Laundering Act., as does EU regulations.
Despite this focus on internet gambling and poker, there is “….a lack of robust scientific evidence of the existence, or quantification, of the money laundering risk that online poker entails,” the researchers note.
“Likewise, little research has been done so far into the extent to which any money laundering risk in the field of online poker can be limited by regulatory and technical security measures.”
Present
The present study addresses these issues, the three professors claim. It begins by examining the existing risk of money laundering in online poker from the economic angle and relates it to other branches of the economy. It goes on to discuss which measures in the field of online poker can be implemented especially effectively to combat money laundering.
In conclusion the study proposes, on the basis of a ten-point plan, the implementation of a catalogue of measures that ought almost to rule out the misuse of regulated online poker offerings for money-laundering purposes.
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