No cases of casinos in Singapore directly complicit in money laundering: Report

Casinos everywhere tend to be awash with cash and so are prime venues for money laundering, but there is no evidence that the gambling facilities in Marina Bay Sands and Resorts World Sentosa have been involved in such activity.

The assessment in an updated report on money laundering risks noted that there have been only a few cases where criminal proceeds were converted into casino chips for self-laundering purposes.

The authorities here have investigated a handful of instances concerning third-party money laundering facilitated by a casino.

One involved a programmer at a bunkering firm who used most of his ill-gotten commissions totalling about $1.9 million to buy chips at one of the casinos.

After gambling away some of his chips, he encashed the remaining ones, including his winnings, to pay for housing and car loans, and insurance premiums.

The man was prosecuted for money laundering involving the conversion of crime proceeds into casino chips in June 2019.

The updated report said most of the suspicious transactions reports filed by casinos here did not relate to potential money laundering offences but involved possible breaches of the Casino Control Act or were filed following adverse news on patrons.

Total gaming revenue for the two casinos here was around $5.26 billion as at the end of 2023.

While the sector is vulnerable to money laundering, the report, which was jointly issued by the Ministry of Home Affairs, the Ministry of Law and the Monetary Authority of Singapore, said the unpredictable nature of gaming and the possibility of losing money make casinos less attractive to criminals than other options.

Elsewhere, where proceeds of crime enter casinos, they largely involve criminals spending them for leisure, rather than “washing” criminal gains, it added.

The Gambling Regulatory Authority (GRA), which supervises casinos here, has found that both outlets have adequate controls to counter money laundering and terrorism financing.

The GRA noted that breaches largely occurred due to human error, resulting in a deviation from the standard operating procedures.

The report also found that the insurance sector has a lower money laundering risk, mostly because direct life and composite insurers deal largely with retail customers and sell most of their policies to individuals. 

Premium payments are generally made via electronic transfers. While cash payments are accepted, they are typically capped at certain amounts, the report said. 

These insurers largely write Singapore onshore risks, so the possibility of foreign illicit funds flowing directly into the sector is low.

There were 24 direct life and composite insurers in Singapore with assets totalling over $300 billion as at the end of 2023.

The report also noted that the pawnbroking sector is less vulnerable to money laundering despite its cash-intensive nature and the potential for illicit goods being pledged for people seeking loans.

Loans disbursed by pawnbrokers are domestic in nature, and are disbursed to clients who must be physically present at the outlet to pawn their pledges. 

Most of their customers are local residents, followed by foreigners working or living in Singapore. The transactions performed are also straightforward and typically small in value, involving an average loan of $1,900. 

There were 240 pawnbrokers in Singapore as at the end of 2023, with loans of about $7.1 billion in total issued.

More than half of the pawnbrokers are run or owned by four companies listed on the Singapore Exchange – MoneyMax Financial, ValueMax Group, Aspial Lifestyle and Taka Jewellery.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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