How to Launder Money through Gambling Games
The gambling games business is developed at high paces in Georgia. Following technological progress, gambling business is also widely penetrating various social layers in various geographical locations and so on. Several years ago it was necessary to visit gambling facilities for playing games, but today personal computers with the global Internet connection suffice to sink into the whirlpool of the gambling games without special efforts.
As a rule, changes and development of any environment also change the existing legislative frameworks that set “the order” in the environment. Currently, the gambling games sector is regulated by legislation that was adopted in the period, when only several persons had computers in Georgia. Today, over a half part of Georgian citizens have access to the Internet and today we have an entirely different reality that creates new challenges to online service suppliers, including to the providers of online gambling games. This is challenge before the state that is responsible for establishing just and modern regulations in this or that field.
The gambling business is a relevant issue in all times. There is no joint position and attitude towards it. It is associated to destruction and failure for many citizens, while another part makes fortune through it. In its nature, gambling games are the way for entertainment, but we will rarely meet people, who plays these games for only entertainment. We do not need much logics and analytical skills to conclude that gambling business is not only entertainment. This business exists and is developed at high paces, this signifies that people predominantly lose money there, not win. This signifies gambling business exists at the expense of lost and failed gamers and only an insignificant part of gamers make benefit from these games (everything depends on the appetite of casinos).
The more the quantity of gambling gamers grows, the more people fail and bear losses. However, the number of winners also grows. Anyway, the whole society fails, because, as noted above, the quantity of losers dramatically grows as compared to winners.
The only mechanism through which the failed society can remunerate its losses consists in taxes that casinos pay to the state budget and that the society receives back in various forms (asphalted roads, pensions and so on). But gambling games cannot bring much benefit even in this respect. The ratio of casino payments in tax revenues is less than 1 %.
Therefore, gambling games continue overwhelming the lives of our citizens in everyday regime. As a result, the number of losing people grows, as well as accompanying negative effects.
However, growth in number of gamers (including underage children) is not an only negative result. Existence and functioning of online casinos also bear additional risks. We mean money laundering and criminal use of accounts in electronic casinos.
It should be noted that the mentioned shortcomings were outlined by various international organizations several times. Recommendations by FATF and MONEYVAL organizations prove this assertion. These recommendations call for improving personal registration procedures in Internet gambling space.
Under the current practice, registration in online casinos is carried out without any verification of personal information and this gap enables to register unreal and falsified data information, or data information of other persons may be inserted in the registration field.
There are no regulations that would bring order in personal identification environment, where casinos are able to use unreliable methods and where personal information is not verified in practice. For example, some casinos receive the information about a client from the name and personal number inserted in th registration process, while no copy of personal identification document is required to verify whether the name and registered personal number match each other. Moreover, there is no control for prevention of registration of fancy names and personal number. No verification mechanism is used, when clients transfer money to their own casino accounts. Moreover, if a client decides to transfer money to bank account or credit card, personality is not examined and verified.
Recommendations issued by FATF and MONEYVAL call for eradicating these problems, because similar practice comprises hazards of money laundering, financing of terrorism and other illegal activities. Today online casino accounts represent uncontrolled channels of money turnover. Therefore it is necessary to carry out valuable personal identification procedures in the registration process to identify gamers (by real documents) and create protected database.
It should be noted the mentioned system has been established in the developed countries and moreover the Authorities carry out active control so as personal registration in online casinos meet standards and prevent registration of falsified data information.
Thus, registration procedures at online casinos in Georgia does not satisfy international standards. Moreover, similar standards absent and consequently, competent bodies cannot control casinos. Therefore, there are high risks of use of online casino accounts for money laundering and criminal financing. Casino accounts have become alternative system for money transfers and financial flows in this system are not controlled.