The United Nations Office on Drugs and Crime (UNODC) has warned of the growing risk of money laundering and shadow banking posed by casinos in the Mekong River region. In a report released on October 29, 2023, the UNODC said that casinos in Laos, Myanmar, and Thailand are increasingly being used to launder money from criminal activities such as drug trafficking and human trafficking.
The report also found that casinos in the Mekong region are increasingly being used to facilitate shadow banking activities. Shadow banking is a term used to describe financial activities that are conducted outside of the regulated banking system. Shadow banking activities can be risky, as they are not under the same oversight as regulated banks.
“Casinos in the Mekong region are a major money laundering risk,” said Jeremy Douglas, the UNODC’s regional representative for Southeast Asia. “They are also being used to facilitate shadow banking activities, which can pose a systemic risk to the financial system.”
The UNODC report identified several factors contributing to the growing money laundering and shadow banking risk posed by casinos in the Mekong region. These factors include:
- The increasing number of casinos in the region.
- The weak regulation of casinos in some jurisdictions.
- The proximity of casinos to borders, which makes it easy to move money across borders.
- The use of cryptocurrency to launder money and facilitate shadow banking activities.
The UNODC report said, “The increasing number of casinos in the region and the weak regulation of casinos in some jurisdictions are creating a perfect environment for money laundering and shadow banking activities to thrive.”