The owner and operator of an illegal gambling website in South Korea hired two cyber security experts to attack a competing gambling site.
South Korea’s National Police Agency stated that the owner of the illegal gambling site paid two men $911,000 (1 Billion South Korean Won) to attack the competitor. The cyber attack consisted of hacking into 12,000 computers located at six different banks. Once in control of those computers, the man directed them to commence a distributed denial of service (DDOS) attack on to the gambling website.
(Price to rent a botnet to DDOS a website.)
One of the men was the owner of his own security company, and the other man was his employee. The man told police that he accepted the illegal job due to his lack of income. The man was previously a computer science professor in South Korea.
Intelligence officials believe that there are over tens of thousands of players in South Korea who bets at illegal gambling websites.
Source: Jung Min-ho, “Cyber security experts arrested for hacking gambling site,” Korea Times, March 3, 2015.
Two cases of illegal gambling syndicates in Asia highlight the amount of money being wagered on the 2014 World Cup.
Police in Macau broke up a ring that took in $645 Million during the opening matches. 22 people were arrested by police in China, Hong Kong and Malaysia. The syndicate was operating out of three hotel rooms in Macau where they took internet and phone bets from people around the world. One gambler allegedly placed a $5 Million bet with the syndicate.
In the same hotel, police broke up a different illegal gambling ring that took in up to $645,000 in bets in a single day during the World Cup.
Hong Kong police seized illegal betting slips that had around $10 Million in bets placed and arrested 39 people in the first two weeks of the tournament. Illegal sports betting in Hong Kong generates about $64.5 Billion each year in the territory.
Singapore security officials arrested 15 people in a illegal gambling ring that took in $640,000 in World Cup bets during the opening stages of the World Cup.
Over half of all illegal sports gambling takes place in Asia.
(See all illegal sports gambling statistics and figures here.)
Source: Sophie Brown, “Macau busts $645 million World Cup betting ring,” CNN, June 23, 2014.
A survey by the University of the Thai Chamber of Commerce found that an estimated $1.3 Billion (43.5 Billion Thai Baht) in illegal gambling bets is expected to be placed in Thailand during the 2014 World Cup Tournament. By comparison, an estimated $789 Million (25.7 Billion Baht) is expected to be spent on consumer goods and parties, such as new television sets.
Thailand has a huge illegal gambling industry. There are over 3 million gamblers in Thailand who gamble at any of the 700,000 to 1 million illegal casinos across the country.
Source: Phusadee Arunmas, “World Cup a boon to spending,” Bangkok Post, June 6, 2014.
Security officials estimate that illegal online gambling syndicates earn up to $2.4 Billion (7.9 Billion Malaysian Ringgit) a year from illegal gambling activities in Malaysia.
Intelligence by enforcement agencies shows that online bookies are able to make a daily profit of $3,112 (10,000 Ringgit) from illegal gamblers in the Malaysia. A start-up gambling website with $15,500 (50,000 Ringgit) in capital is able to collected between $2,178 to $3,112 (7,000 to 10,000 Ringgit) per day with a few customers.
The online syndicates use covers such as cyber cafes and restaurants to hid their gambling activities and to wash their funds.
(Additional money laundering cases.)
Source: Rahimy Rahim and Allison Lai, “Gambling rings making almost RM8bil a year even with raids,” Asia One, May 26, 2014.
According to security officials with the Nevada State Gaming Control Board, around 500 people are arrested each year for attempting to cheat at casinos in the state of Nevada. Out of the total number of arrested, nearly a third of those arrests are casino employees.
Security experts stated that increased video technology and ultraviolet and infrared light are creating new opportunities for cheaters in the casinos. There have been cases where gamblers would wear infrared contact lenses in order for the wearer to see marked cards.
(More on illegal gambling and betting here.)
Source: Bethany Barnes, “Casino gaming cheats are increasingly sophisticated, panelists say,” Las Vegas Sun, May 22, 2014.
A study conducted by the International Centre for Sport Security and the Sorbonne in Paris stated that up to $140 Billion is bet on sporting events by people looking to launder money.
Up to 80 percent of global sports betting takes place on illegal gambling markets, such as offshore books and unlicensed online casinos.
The report stated that a lack of regulation in sports and gambling allows the possibility of match-fixing to take place. According to the researchers, football (American soccer) and cricket were the sporting events most likely to be fixed by gamblers. Tennis matches, basketball, motor racing and badminton were also affected by match fixing.
(Additional illegal gambling statistics and information.)
Source: “Crime gangs launder $140 billion through sports betting – report,” Reuters, May 15, 2014.
A gaming analyst in Macau told the South China Morning Post that an estimated $90 Billion in gaming revenue in Macau was unreported in 2013. Officially, the gaming industry and casinos in Macau reported $45 Billion in revenue in 2013.
(Additional illegal gambling statistics.)
One of the main methods of avoiding currency controls is through the use of payment cards issued by UnionPay. These mobile cards are registered as domestic transactions and thus are not limited to caps on how much a person can gamble in Macau. The gamblers who use these cards are able to either wash more money or use the casinos to avoid paying taxes in China.
Previously, when gamblers in Macau would run out of funds, they would visit pawn shops in order to sell items to cover their gambling debts. Due to the use of mobile payment cards, the Macau General Chamber of Pawnbrokers stated that business revenue is down 40 percent as less gamblers need to sell items.
(See more money laundering examples and cases.)
Source: Toh Han Shih and Niall Fraser, “Mainland crackdown on illegal use of payment cards in Macau casinos,” South China Morning Post, May 8, 2014.
A threat intelligence report by McAfee has found that many cyber criminals are using online gambling sites to launder money that they have earned from ransomware and other cyber crimes.
According to internet security researchers, criminals use VPNs and online currency such as Bitcoins to fund their accounts at online gambling sites. Due to the high volume, lack of regulations, and using Tor, criminals are able to wash their money and cash out the proceeds from cyber crime.
Back in 2003, online gambling sites paid out $9.1 Billion in winnings. By 2013, the amount of cash paid out by online sites increased to $32.7 Billion.
Although the number of online gambling sites fluctuate due to closures, there are at least over 25,000 online gambling sites in operation around the world, according to McAfee.
(More illegal gambling statistics.)
Source: Teri Robinson, “Online gambling provides cover for money laundering, study says,” SC Magazine, April 25, 2014.
According to research organization Demoskopika in Italy, the mafia syndicate ‘Ndrangheta collected $73 Billion (€53 Billion) in revenue in 2013.
The various revenue streams for the syndicate is as follows:
Intelligence from criminal justice programs state that the ‘Ndragheta has around 400 key operatives working on its behalf in 30 countries. When including all people who conduct business on behalf of the group, then the number of people working for ‘Ndragheta is estimated to be as high as 60,000.
Source: AFP, “‘Ndrangheta mafia ‘made more last year than McDonald’s and Deutsche Bank’,” Guardian, March 26, 2014.
According to a report by accounting firm KPMG and the Federation of Indian Chambers of Commerce and Industry, the estimated size of the illegal gambling market in India is worth $49 Billion (3 Trillion Rupees).
In a report by Reuters news, most of the illegal casinos operated out of jewelry shops. This allows the bookmaker to be able to wash and handle large amounts of cash. Bets placed at these illegal bookies range from $80 to $81,000 (5,000 to 5 Million Rupees).
Another popular form of illegal gambling in India is through the use of online casinos hosted outside of the country.
Source: Manoj Kumar, “Wary of pollsters, Indians draw election tips from illegal bookies,” Reuters, March 24, 2014.