Money launderers are using online gambling sites to disguise shady funds

Canada's financial intelligence agency warns that illicit cash is being laundered through online gambling sites that provide a variety of ways to disguise shady funds.

In a newly published bulletin, the Financial Transactions and Reports Analysis Centre of Canada highlights the criminal exploitation of legitimate and unlicensed digital wagering operations.

The centre, known as Fintrac, notes the popularity of online gambling grew during the COVID-19 pandemic and has been fuelled by the 2021 legalization of single-event sports betting in Canada.

Fintrac identifies money linked to illicit activities by electronically sifting millions of pieces of information each year from banks, money-service businesses, casinos, insurance companies, securities dealers, real estate brokers and others.

It discloses the resulting intelligence about suspected cases to police and other law-enforcement agencies.

In preparing the new bulletin, Fintrac analyzed suspicious transaction reports related to online gambling between 2016 and 2023. It also looked at data from other financial intelligence units, assessments from domestic and international organizations, and information from open sources to glean trends and patterns.

«Online gambling sites offer prospective money launderers opportunities to conceal the source of their funds by using multiple different deposit and withdrawal methods,» the bulletin says.

Unlicensed gambling sites

Fintrac found a common tactic was the purchase of prepaid cards or vouchers using suspected proceeds of crime. They were then used to deposit money into gambling accounts, followed by withdrawals through wire or e-transfer to a Canadian bank account under the guise of winnings.

Bank accounts also provided a means of placing