Online Gambling Does Not Lead To Money Laundering
July 12, 2009
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The main reason for passing the UIGEA was to prevent money laundering and transfer of funds by terrorist organizations. It was for this reason that the UIGEA was attached to the Safe Port Act and passed quickly. Now a study conducted by MHA Consulting reveals that there is no link between online gambling on the one hand and money laundering and terrorist financing on the other.
MHA Consulting is an acknowledged expert organization in combating financial crime with special emphasis on money laundering and terrorist financing. Therefore its findings carry weight. The report of a study conducted by MHA Consulting was published this week by the Remote Gambling Association. The report made it clear that online gambling is not used as a vehicle for money laundering or for terrorist financing.
The conclusions drawn by MHA Consulting are based on rock solid arguments. At the outset there is no evidence of online gambling being used for money laundering or terrorist financing. Online gambling has been around for over a decade and there are no recorded cases or prosecutions that connect online gambling to the type of financial crimes under discussion. Secondly anonymity is required in the process of money laundering and terrorist financing. In the case of online gambling the identities of the gamblers have been verified through valid and authentic documents. All financial transactions, and indeed all wagering transactions, are recorded and archived. Hence it is very simple to trace these transactions and therefore online gambling is not likely to be used by terrorist organizations. The third reason given by MHA Consulting is that the online gaming industry has demonstrated a very strong commitment to prevent and detect money laundering and terrorist financing. The record of compliance with the legislative and regulatory provisions is excellent and so is the willingness to co-operate with the authorities.
As part of its study MHA Consulting reviewed the requirements imposed by the various online gambling jurisdictions in Europe. They examined to what extent these requirements fulfilled the conditions laid out in international anti-money laundering initiatives such as the European Money Laundering Directives and the Financial Action Task Force standards. It also evaluated the self regulatory mechanisms prevalent within the online gaming industry. Though MHA Consulting has given the online gaming industry a clean chit, it has also advocated vigilance and caution. Money launderers have been known to create innovative moves to carry out their illegal activities and therefore the law enforcement agencies also have to continuously evaluate and improve their own mechanisms. In this light it is essential that the online gaming industry closely co-operates with the law enforcement agencies and continues to upgrade its mechanisms and also follow whatever requirements the enforcement agencies impose.
The Remote Gambling Association is an association of the largest licensed and stock market listed online gaming operators. The chief executive of the association, Clive Hawkswood was relieved by the conclusions of the report. He said, “In the past a combination of misperception and misinformation has led many to believe that money laundering is a particular problem for the online gambling industry. That is quite clearly not the case and we hope this report will go some way to dispelling those often quoted myths and introduce a greater level of objectivity whenever these issues are debated.”