How the Covid-19 pandemic forced Southeast Asia’s casino criminals to bet on tech – and win
- Criminal networks have grown around Southeast Asia’s special economic zones, where regulations are loose and casinos offer a convenient front
- But when Covid-19 halted business, casinos went online, massively expanding their client bases – and crime syndicates moved with them
The organised crime landscape in Southeast Asia evolved dramatically during the Covid-19 pandemic. It happened quickly and in unseen ways, and most governments in the region are yet to understand the challenge they now face.
Underpinning – and now rivalling – these multibillion-dollar criminal industries is the regional casino industry, where the most advanced syndicates have converged and concentrated investments.
But the game changed fundamentally during the pandemic. Lockdowns that kept millions at home turned out to be an opportunity for organised crime involved in casinos. Lacking floor traffic, they looked for ways to innovate, and they adapted without governments in the region really noticing.
Most casinos in the region have been concentrated in lightly governed special economic zones, or SEZs, noticeably clustered around borders and ports. The Kings Romans complex in the Golden Triangle SEZ in Laos run by Zhao Wei – who is sanctioned by the US Treasury – is a blatant example. SEZs in Cambodia are similarly full of casinos with allegations of criminal connections.
Although the commodities they trade are illicit and the money they generate is illegal, criminal enterprises are in a sense like other businesses; they seek growth, continuity and limited government interference.
So it is no surprise that organised crime syndicates and the casino and junket companies they work with have gravitated towards places where they can operate with impunity. At the same time, being close to China, Thailand and Vietnam offers connectivity and proximity to infrastructure and customers. In other words, ideal conditions.
Complicating matters in ways few could imagine, Covid-19 rapidly accelerated the rate at which casino operations in the region shifted online.
While governments in the region were preoccupied with vaccine roll-outs, border closures and quarantines, major syndicates running casinos adapted. They established user-friendly websites and smartphone apps, integrated sophisticated information and blockchain technology, and jumped on board with cryptocurrency trading and fourth-party payment providers to facilitate and obfuscate cross-border payments. And they have done it at a pace most private companies would envy.
Another way to look at it is that the significant investments made by organised crime in casinos before the pandemic needed to be recovered, revenue needed to be generated, and they shifted their business online to survive and thrive.
It is increasingly clear that an irreversible, fluid and now tech-enabled dispersal of major criminal activity and money laundering has taken place in some of the least developed and corrupted parts of Southeast Asia.
The situation has changed from one where transnational criminal organisations have a foothold in a legitimate industry – which casinos and gaming are, in theory – to a situation that is starting to get out of control.
Perversely, the pandemic created an unforeseen opportunity for organised crime-running casinos in Southeast Asia. They accelerated the move of operations online out of necessity, and can now immediately access people around the world – places like Australia, Canada and the US are a click away.
The fact is that criminal syndicates and their associated casino and gaming platforms are a threat to the sovereignty of parts of Southeast Asia, as well as to the capacity of already overstretched law enforcement and justice agencies. And the threat has spread – the internet does not respect borders.
Leaders of the region need to acknowledge the situation and make it clear sovereignty is not for sale, and law enforcement and justice agencies need to step in to ensure criminals cannot do as they want either offline or online. The rule of law needs to be protected.
Jeremy Douglas is the regional representative of the United Nations Office on Drugs and Crime (UNODC) in Southeast Asia and the Pacific. The views expressed here are his own