What's going on this week?

We have reached our 10th issue! Over the past few months we have explored different topics surrounding money laundering and how they contribute to financial crime — cattle ranching, wildlife trading, the maritime industry and the art world to name a few. This issue, we dive deeper into an industry that is no stranger to the world of money laundering — casinos. More specifically, we explore casinos in the context of Singapore.

Before we dive in let us know — which topics have you loved the most so far? Is there anything you'd like us to cover next? Hit reply to this email — we always love hearing from you.

Double or Nothing

Singapore has been touted to be a notable financial centre worldwide. Given its global image as a trade hub, it has been especially susceptible to money laundering due to huge cross-border flows. According to Boston Consulting Group, Singapore’s tight bank secrecy laws have aid in attracting close to USD 1.1 trillion in foreign funds into the city-state, claiming that it is now “growing faster than Switzerland and is set to become the largest cross-border financial center in the world by 2028.” The combination of large inflows of transactions and high levels of secrecy has also made Singapore an attractive haven for those who want to keep their money under the radar, increasing regulatory scrutiny on the country.

In June 2020, news broke out that one of Singapore’s two casinos, Marina Bay Sands, was being probed by the United States Department of Justice over the handling of their top gamblers’ accounts and whether anti-money laundering directives had been breached. According to a Bloomberg article, the casino’s internal investigation noted that there had been violations in the manner in which its employees had “accepted transfer procedures by filling in payment details on pre-signed or photo-copied authorization forms” and “uncovered cases in which original documents were destroyed.”

Interestingly, the probe had been sparked by a separate incident — when the casino had “agreed to pay a settlement of USD 6.5 million to a Chinese gambler who claimed that the sum had been withdrawn from his account and transferred to other guests without his approval.” This had prompted a chain of further investigations by the Singaporean authorities into the casino’s role in facilitating money laundering in the country. Marina Bay Sands is owned by billionaire Sheldon Adelson’s Las Vegas Sands Corp. and is said to be one of the most lucrative casinos worldwide, making up 20% of the United States parent company’s revenue.

Casinos worldwide have long been seen as vulnerable in the money laundering process. Given the cash-intensive nature of casinos, they are often seen as a preferred vehicle by criminals to launder illicit funds. Money laundering via casinos typically take place in the placement and layering stage of the money laundering process. One common way in which these funds are laundered through casinos is by converting illegal cash into casino chips, gambling, and then cashing the funds out. In 2009, the Financial Action Task Force (FATF) recognized the susceptibility of casinos to the money laundering process, updating their 40 recommendations, “with obligations on casinos being significantly enhanced”.

These incidents have also brought to light some of the issues surrounding casinos worldwide. For one, there are no clear AML/CFT obligations in place for subsidiary casinos — are they obligated by the laws of the country where the parent company is registered, the country where the subsidiary is registered or both? While this was highlighted in the 2009 FATF report on the Vulnerabilities of Casinos and Gaming Sector, there is still a need for a global enforcement body to ensure recommendations put forth by the FATF are followed through in the casino industry.

History of casinos in Singapore

Singapore’s relationship with casinos has been fairly recent but the history of gambling in the country dates back to British colonization. It had been legalized in 1923 under the British government, but given the rise of misdemeanours and addiction, it was repealed when Singapore gained independence in 1965. After Singapore’s independence, gambling was limited to state-controlled activities such as lotteries and horse racing.

In a bid to increase tourism in the country and remain competitive compared to its South East Asian neighbours, Prime Minister Lee Hsien Loong introduced the government’s decision to allow the operation of two new casinos in 2005. Lifting a 40-year-old ban on gambling, Prime Minister Lee Hsien Loong announced the country’s decision to allow operation of two new casinos, reversing stringent anti-gambling rules that had been put forth by his father, Lee Kuan Yew, touted to be the founder of modern Singapore.

The first casino, located within the Resorts World Sentosa integrated resort, opened on February 14, 2010. The second casino, housed in the Marina Bay Sands integrated resort, opened two months later on April 27, 2010. According to the Singaporean National Public Library archives, “by 2013, the combined gross gaming revenue of the two casinos in Singapore had reached S$7.66 billion”, or around USD$5.5 billion.

Since the casinos had been introduced primarily to attract foreign tourism, strict limitations were imposed on Singaporeans to curb the peripheral social impacts gambling may have on society:

• Singaporeans and Permanent Citizens are required to pay a daily entry levy of SGD 150 (approx. USD 110) to enter the casino


• Singaporeans and permanent residents who visit casinos more than five times a month may need to show proof they are not in financial distress


• Immediate family members may call the National Council on Problem Gambling helpline to limit a relative’s visits, proving the individual has neglected their family due to gambling habits

The FATF’s 2009 report on Vulnerabilities of Casinos and Gaming Sector discusses why adopting a “foreigners-only” or “foreigners-mainly” approach to casinos like the Singaporean government may be problematic in curbing money laundering through casinos. While this view is often seen as one to mitigate risk arising from these establishments, it can lead “to weakened oversight by authorities as there is a perception that risks from money laundering are less under this model.”

While the Singaporean government has been proactive in engaging a Casino Regulatory Authority, creating this dichotomy between Singaporeans and foreigners may contribute to more lenient regulations against money laundering since it is seen as an “other” problem.

Continue reading about casinos in Singapore...

Catch Up On The Week

1. According to Germany’s Financial Intelligence Unit, suspected cases of money laundering and terrorist financing had reportedly increased by 50% in 2019, with the real estate market especially vulnerable to suspicious transactions.


2. An Australian accountant has been accused of being a “money mule” for hackers and has been charged for money laundering over her alleged participation in an email scam worth more than AUD 3 million.


3. The COVID-19 pandemic and lockdowns have exacerbated human trafficking for the purpose of forced labour, sexual exploitation and forced marriage, and organ removal.


4. Ukraine has arrested a cybercrime gang who ran 20 cryptocurrency exchanges, where they laundered more than $42 million in funds for criminal groups.

Is there anything you'd like us to cover next? Hit reply to this email and let us know— we always love hearing from you!