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A new UN report on East and Southeast Asian gambling-linked criminal networks has warned that underground activity is set to worsen on the back of generative artificial intelligence (AI), data mining, cryptocurrencies and other advanced technology.
The United Nations Office on Drugs and Crime (UNODC) said in its January 2024 report that regional governments must “more effectively understand, monitor, prevent, and respond to transnational organised crime challenges related to casinos, underground banking, and technological innovation”.
Jeremy Douglas, UNODC representative for Southeast Asia and the Pacific and lead author of the 89-page report, said in a foreword: “Failure to address this landscape will have consequences for Southeast Asia and other regions as organised crime reinvest[s] to further innovate, professionalize, and consolidate operations.”
The report outlines a host of criminal methodologies in money laundering and human trafficking via regional land-based and online casino hubs, summarises law enforcement responses, presents case studies and issues recommendations to governments.
Much of the report collates existing knowledge of criminal networks and their links to the border-region gambling industry in Southeast Asia, ethnic militias in Myanmar and US-blacklisted kingpins in a Laotian special economic zone, as well as to Macau and European online operations.
However, it also warns that applications of generative AI, deepfake technology and other “malicious” technological advances, including in the decentralised environment of the metaverse, pose a “major threat to individuals and the formal banking industry” in the region.
Citing unnamed regional law enforcement officials, the report says that “cyberfraud operations based in Southeast Asia [are] rapidly diversifying their business model by expanding into the development of malicious mobile and web applications or malware, the broader blockchain gaming industry, online bank fraud schemes, underground cryptocurrency exchange and payment services, and offering a broad range of cybercrimes as a service”.
Despite thousands of their nationals being trapped in coercible work environments, key regional governments have been sluggish in cooperating against cybercrime, with the possible and limited exception of Beijing’s collaboration with client states such as Cambodia, Myanmar and Laos.
Amid such inactivity, the report calls for the creation of a “regional inter-agency forum” of regulators, financial intelligence organs and law enforcement officials to share intelligence on casino-linked money laundering and shut down “unlicensed and unregulated casinos”.
In terms of legislation and policy, the report pushes for coordinated national action plans and tougher mechanisms to vet casino investors, online platforms and junkets, identify beneficial owners and tag links to organised crime.
It also recommends monitoring of social media job recruitment networks to stymie one of the biggest engines of enslaved and trafficked labour in the world, and calls for criminal prosecutions for all unlicensed money transfer services, “including cryptocurrency exchanges”.
“While casinos and junkets have for years served as vehicles for regional underground banking and money laundering, the proliferation of online gambling platforms, e-junkets, and both illegal and under-regulated cryptocurrency exchanges in Southeast Asia has changed the game, allowing for faster anonymised movement of funds,” Douglas wrote.
“At the same time, the creation and success of these systems has helped expand the region’s broader, booming illicit economy, in turn attracting new networks, innovators, and service providers to the criminal ecosystem of Southeast Asia and the Mekong.”
