IGC says not a
big threat from online gambling.
The Interactive Gaming
Council was doing what it does best, representing the industry as a whole this
week in responding to questions on money laundering from the international
Financial Action Task Force.
In its submission, the
IGC pointed out that online gambling, with a combination of regulatory oversight
and use of technology - while facing the same threats as real-world gambling
facilities - is in a better position to address these risks. "Online
gambling does not lend itself to any form of cash movement because of the online
nature of the business, specifically, there is no face-to-face contact in the
business," the IGC states. And whatever exposure the interactive gaming
industry does have to money laundering can be effectively mitigated through
rigorous regulation, the organization adds.
The IGC was formally
responding to a request for comments on an FATF consultation paper. The FATF,
based in Paris, is devoted to combating money laundering and its recommendations
have been endorsed by more than 130 countries.
The IGC told the FATF
that stringent player registration and ongoing verification processes for online
gambling, in conjunction with the appropriate regulatory oversight and banking
regulations, satisfy the "know your customer" requirement that is
basic to any fight against money laundering. This, combined with the advanced
computer technology that's available to Web site operators, is a strong
deterrent to money launderers.
technology tools, online gambling operations can scrutinize 'inconsistent'
behaviour, capture and report the transaction, and freeze the funds pending
investigation. When performed in conjunction with a licensing authority this is
a potent weapon," the IGC says in its FATF submission.
The IGC states that
"There is no indication that legal online gambling sites have laundered
money," adding that "A more significant threat lies with online
auctions where items with a minimal 'real' cost can be 'sold' for $1,000 and the
profit then laundered at the online auction house."
said, vigilance is needed. The concern is not so much with the money coming in
to an online casino or sports book, but with the money going out. IGC members
have policies that prevent transfers of funds (winnings or return of deposits)
to parties other than the individual who originated the transaction.
critical," Smith said. "You can't let players tell the casino to send
checks or wire money all over the place. That money must go only to the player
who registered at the site and did the betting. It's also best if the money goes
back the same way it came in. In other words, if a player starts playing on a
credit card deposit, it's best if any winnings are credited to the same credit
card. Unfortunately, most U.S. credit card issuers won't permit that."
The ultimate weapon
against money laundering, the IGC believes, is government regulation of the
online gaming industry, which "should be subject to the same regulatory
requirements as regulated land-based gambling organizations."
The IGC further
contends that attempts to prohibit, rather than regulate, the industry have
driven some operators underground, to jurisdictions that don't follow the
anti-money laundering measures promoted by the FATF.
The complete text of
the IGC submission to the FATF is posted on the IGC Web site, www.igcouncil.org.
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