Singapore Says No to Dirty Gambling Money

Singapore, the site of one of the world’s biggest money-laundering cases in recent years, has published a new national AML strategy.  

On 30 October 2024, the government published its National Anti-Money-Laundering (AML) Strategy, which is said to be its “risk-based” plan to curb the growing threat. But why the sudden push for a water-tight strategy?

In 2023, Singapore was rocked by a scandal that involved S$3 billion (£1,762 billion) in dirty money.  

Police arrested ten Chinese nationals living in luxury in Singapore. They were found to hold a slew of international passports. The police seized 152 properties, 62 vehicles and other assets, including jewellery, designer goods, alcohol, cryptocurrency and cash.  

According to the Ministry of Home Affairs (MHA), several of those arrested laundered money through illegal online gambling sites. 

In June, the last of the 10 suspects was convicted and sentenced. Despite the seriousness of the crimes and the associated damage to Singapore’s global good standing, the jail terms imposed were relatively light, ranging from 13 to 17 months.  

Cyber-Fraud and Illegal Online Gambling on the Rise

The new National AML strategy was conceived to combat similar cases that arise and is built on three pillars: prevention, detection and enforcement.  

The MHA noted in its risk assessment for money laundering that a high number of ML cases arise from foreign fraud, particularly cyber-enabled fraud.  

Other significant threats originate from foreign organised crime syndicates, in particular, illegal online gambling.  

The MHA’s risk assessment also acknowledged that Singapore’s status as an international financial centre makes it susceptible to ML risks.  

Singapore’s Banks Establish Auditing Standards

The Association of Banks in Singapore (ABS) recently published a “best practice paper” on the prevention of money laundering and terrorism financing in association with the Anti-Money Laundering Peer Group (AAPG).  

The ABS noted that data analytics is pivotal in identifying high-risk clients. At the same time, the Monetary Authority of Singapore added that a thorough auditing system underpins financial institutions’ controls against money laundering and terrorism financing.  

Casinos Empowered to Detect Financial Crime

An amendment to the Casino Control Act of 2006, made in August, authorised Resorts World Sentosa and Marina Bay Sands to share data on patrons without their consent to more effectively detect patterns of criminal activity.  

This amendment also lowered the thresholds for customer due diligence checks, which were formerly triggered by single cash transactions of S$100,000 or deposits of S$5,000. The threshold was reduced to S$4,000 for both cash transactions and deposits.  

Overview of the Casino Market in Singapore:

• Singapore’s casino sector is the biggest in Asia-Pacific and accounts for approximately 1.5% of the global market size. Overall, this makes Singapore the third-biggest casino market in the industry. 
• In 2020, the casino market in Singapore saw a decline in growth of 6%.
• The market size of the casino sector in Singapore reached a value of $1.8 billion in 2021, which was a further de-growth of 50%, accounting for almost $2 billion. 
• Even after Covid-19 restrictions were eased and the casino industry was witnessing a global recovery in demand, Singapore was one of the few regions with negative growth. 
• Singapore's online casino and betting market grew at a CAGR of negative 19% from 2017 to 2021. People were becoming more cautious with spending post-pandemic, which hampered demand in the region, which was already on a downhill trajectory before the pandemic arrived.

The Online Gambling Market in Singapore 

The online gambling market in the republic is relatively tiny compared to other regions, but it is growing, with a CAGR projected at 10.44% from 2024 to 2029.  

The overall trend in the Asia-Pacific region shows a significant increase in online gambling activities, driven by mobile gambling apps and the growing acceptance of online betting. The overall market is heavily regulated and has some unique trends. 

Here are some of the key points: 

1. Regulation: The Gambling Regulatory Authority (GRA) strictly regulates online casinos and betting. Only a limited number of operators are allowed to offer online gambling services.
2. Market Size: The online gambling market is relatively small compared to land-based casinos. In 2020, only 0.3% of Singaporeans engaged in online gambling, down from 1% in 2017. 
3. Legal Challenges: The government has taken a strong stance against illegal online gambling, with numerous arrests being made for betting through prohibited platforms.
4. Economic Impact: The overall gambling market contributes significantly to the economy, but the online segment is still in its infancy. 

While online gambling has been linked to money laundering activities in Singapore, raising concerns about the effectiveness of current financial regulatory measures, it is widely believed that new protocols have the problem in hand.