Online gambling growth sees increase in financial crime risk

Online gambling growth sees increase in financial crime risk

Authorities in the US and across the world have always spoken of the risk of money laundering that comes with gambling. Online gambling boom in US raises concerns that it could also result in a spurt in moneyaundering and other related financial crimes.

As of August 2022, 20 states have legalized online sportsbetting. 6 states are taking the first step to legalize it.   In 2018, the Supreme Court of the United States of America ruled that the ban on online gambling was invalid.

The main reason for states to legalize sportsbetting was the potential for increased revenues. Massachusetts legalized sports betting in August 2022 and is set to rake in $5.2 billion. New York was able to profit $25 million for a license from prospective operators. The number of states where it is 100% legal is small, but the revenue generated is staggering.

Land-based gambling and wagering is easier for regulatory authorities to monitor than online gambling. Without federal oversight, it is difficult to control instances of illegal activity done in the name of online sportsbetting.

There are many gray areas regarding online gambling in the US. Different states have their own set of laws which differ. Online casinos are going nowhere any time soon. Serious regulations need to be implemented soon in this country.

There are not enough regulatory measures and guidelines in place to regulate the money being wagered. Online casinos make for easier targets for criminal activity.  Online gambling growth sees increase in financial crime risk.

Criminals may use online gambling for illegal activities like money laundering. Some of the big players in the US have special and dedicated compliance teams in place. The problem is that some smaller players lack resources and don't have compliance programs in their place, so they may not be aware of need for an effective anti-money-laundering program.

There are several agencies that oversee the industry. FinCENCen deals with financial crimes and the Internal Revenue Service with the functioning of the gambling industry, but it's not clear which of them will take the lead in regulating gambling and preventing illegal activity.

Online gambling growth sees increase in financial crime risk. FinCEN is an agency of the US Treasury that deals with financial crimes. The Internal Revenue Service also oversees the functioning of this industry.

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The November ballot will present Californians with two options for legalized sports betting:

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