A Washington D.C. based anti-online gaming group, Coalition to Stop Internet Gaming, has been circulating a letter by the United States Federal Bureau Investigation that warns about the use of internet gambling as a source to launder funds gained illegally. The group is funded by 80-year-old Sheldon Adelson, Chairman of Las Vegas Sands Corp. The letter is the group’s latest effort to restore a complete ban on internet gambling.
New Legislation Proposed in Washington D.C.
Sources from Congress claim that the new proposed legislation that would reverse the overturning of the Federal Wire Act is being headed by the coalition and is supported by other anti-online gaming proponents. The proposed legislation has been floating around D.C. since December, but has yet to find a sponsor. The Federal Wire Act was overturned by the U.S. Department of Justice and allows for states to make their own determinations on internet gambling. In late 2011 the Department of Justice ruled that the Federal Wire Act only pertained to sports betting, and Nevada, Delaware and New Jersey have all since instituted some online gaming play in those states.
Early in January, the coalition began circulating a letter that was dated September 2013 and sent from the FBI to the late Rep. Bill Young, a Republican from Florida, who asked the FBI if online gaming could be abused by criminal groups. Young passed away in October of 2013. FBI deputy assistant director for the Criminal Investigative Division claimed that online gaming could be used for criminal activity, using online poker as a means to launder money as an example.
George Pataki, a former Governor for the state of New York, was hired by the coalition and claimed that the letter demonstrates some of the dangers of online gambling. Pataki also claimed that the sophisticated technologies used in online gaming could be susceptible to not only criminal enterprise, but also terrorist groups who want to hide their physical locations and move money secretly.
All Gambling Institutions Need to be Vigilant
Director of the Department of Treasury’s Financial Crimes Enforcement Network, Jennifer Shasky Calvery gave a speech at the Global Gaming Expo in September of 2013. She warned casinos that they need to be aware of the possibility of their industry being used to launder illegal monies. In August of 2013, Las Vegas Sands paid $47.4 million in regard to a criminal investigation of money laundering by Chinese-Mexican businessman Zhenli Ye Gon. Ye Gon was linked to drug trafficking by the U.S. and it is estimated that he laundered up to $84 million through Las Vegas Sands. The company admitted they had made an error in not scrutinizing Ye Gon’s wagering and avoided criminal charges.
Geoff Freeman, President of the American Gaming Association countered that any institution that handles large financial transactions, including land based casinos and banks, can be susceptible to criminal activities such as money laundering. Freeman stated that intense regulation was a means to combat illegal activities in all areas of financial commerce. He also stated, “Pretend prohibition of online gaming is a free ticket for shady foreign businesses and criminals to exploit the United States”.