Casinos are once again under the spotlight as a new report from the US Financial Crimes Enforcement Network (FinCEN) highlights how Chinese money laundering networks (CMLNs) are exploiting gaming floors, luxury purchases, and cross-border financial flows to clean illicit funds.
The report, covering 2020–2024, analysed more than 137,000 Bank Secrecy Act (BSA) reports tied to suspected CMLN activity, representing about $312 billion in suspicious transactions. While majority of the reports were filed by banks, casinos and gaming institutions were directly implicated in laundering schemes that intersect with organised crime, narcotics trafficking, and grey-market financial channels. The report notes that casinos, insurance companies, and other financial operators reported approximately $24 billion in suspicious funds over the five-year period.
Casinos flagged in laundering schemes
According to FinCEN, casinos accounted for a portion of the 7,452 suspicious activity reports filed by non-bank financial institutions, with recurring red flags that included large unsourced cash-in transactions inconsistent with customer profiles, chip walking, where players leave gaming floors with unredeemed chips to mask activity. Additionally, there were reports of luxury purchases funded by illicit proceeds, often linked to student accounts or third-party transfers, and suspicious gaming activity tied to healthcare fraud and elder abuse schemes.
In one striking example, FinCEN detailed how a single individual flagged as a “student” generated 85 casino-related suspicious activity reports, totalling over $22 million in unusual transactions, much of it connected to unusual gaming practices and chip walking.
Students and casinos: a hidden vulnerability
The report highlights how Chinese students in the US are being recruited as money mules, with some opening multiple bank accounts and using them to deposit illicit cash before funnelling it into casinos. FinCEN identified 20,282 suspicious reports involving Chinese students, worth $13.8 billion in suspicious activity. Casinos were a recurring venue in these cases, often reporting “significant casino gaming activity with no reported employment” or “luxury purchases with unsourced funds.”
This suggests that casinos remain a preferred entry point for laundering due to their cash-intensive environment and high-value transactions, making them vulnerable to exploitation by transnational laundering networks.
Another surprising finding from the report was the connection between adult daycare centres in New York and illicit gaming activity. FinCEN flagged 43 reports involving $766 million in suspicious transactions linked to healthcare fraud, elder abuse, and gaming schemes. Funds were allegedly cycled through casinos and gaming accounts to disguise their origin, adding another layer of complexity to money laundering controls.
Global implications for gaming hubs
Although FinCEN’s dataset focuses on the United States, the findings have global resonance. CMLNs thrive on access to US dollars and exploit industries where large, opaque transactions can be masked as legitimate. Casinos are particularly attractive because of their cash-heavy environments, VIP programmes, and cross-border clientele.
Major gaming hubs such as Macau, Manila, Singapore, and Las Vegas remain at risk. Macau, the largest casino hub in the world, is at heightened risk as VIP junkets have historically been linked to laundering risks. Additionally, Singapore and Manila have also expanded their casino offerings, attracting high-value foreign players, including Chinese nationals. Daigou buyers and cross-border shoppers, highlighted by FinCEN, overlap with the same luxury-driven clientele catered to by Asian Integrated Resorts (IRs).
For Macau, the world’s most significant casino market, the FinCEN findings underscore persistent vulnerabilities. Although Beijing’s crackdowns have curtailed junket operators, alternative laundering channels are emerging. There have been reports of structured deposits and chip walking mirror tactics by Macau regulators. In recent years, casinos have been using radio-frequency identification (RFID) technology on all of their gaming tables. Operators can track the values, location, and movement of RFID chips in real-time, as each chip has a unique identification implanted in it. This has significantly increased precision, reduced human error, and facilitated the identification of counterfeit chips. Additionally, capital flight restrictions in China have fueled demand for illicit ways to access foreign currency, with Macau as a first stop.
The compliance challenge in Asia
The report’s findings point to a transnational laundering ecosystem, with US casinos, Asian hubs, and global luxury markets intertwined. For some time now, Asian operators have been under pressure to demonstrate that anti-money laundering (AML) and know-your-customer (KYC) controls are not only compliant with domestic regulation but also aligned with international expectations.
The report’s identification of casinos as vulnerable actors reinforces concerns long held by organisations like the Asia/Pacific Group on Money Laundering (APG). Recent research, including the FATF/APG’s 2009 ‘Vulnerabilities of Casinos and Gaming Sector‘ report, highlighted weaknesses such as gaps in junket oversight, regulatory blind spots, and a lack of global typologies covering casino-based laundering.
Operators in the industry risk not only financial penalties but also reputational damage if Asian IRs are perceived as weak links in the global AML chain. While Macau’s Gaming Inspection and Coordination Bureau (DICJ) has introduced stricter compliance rules, international scrutiny may increase. As part of the continued crackdown, DICJ rolled out its largest staffing surge since 2019, inducting 60 new inspectors, which comprised 45 AML specialists and 15 IT auditors. As part of the rules, Macau casinos must meticulously track high-value transactions over MOP 500,000 ($62,150) and conduct enhanced due diligence on politically exposed persons (PEPs).
