Should gambling be a predicate for money laundering?

Date01 July 2004
Published date01 July 2004
AuthorAbdullahi Y. Shehu
subjectMatterAccounting & finance
Journal of Money Laundering Control Ð Vol. 7 No. 3
Should Gambling be a Predicate for
Money Laundering?
Abdullahi Y. Shehu
Money laundering is simply de®ned as the process or
attempt to conceal the origin, source, and purpose of
illegal wealth through a complex web of ®nancial
transactions with a view to making the wealth
appear as if it was derived from apparently legitimate
endeavour. This means therefore that money launder-
ing is a predicate-based or derivative crime. A predi-
cate oence is de®ned by the UN Convention (2000
Art. 6:2(c) sub-section (b) as follows:
`Predicate oences shall include oences committed
both within and outside the jurisdiction of the state
party in question. However, oences committed
outside the jurisdiction of a state party shall con-
stitute predicate oences only when the relevant
conduct is a criminal oence under the domestic
law of the state party implementing or applying
this article had it been committed there.'
The study of money laundering, until recently, had
been limited and derivative Ð mostly concerned
with drug money laundering. Although the drug
trade is a great facilitator of money laundering, other
predicates/activities which could equally generate
illegal money that would require laundering include
corruption, fraud, human tracking (especially of
women and children for slave-like purposes or sexual
exploitation), smuggling of arms and other com-
modities, gambling and so on. Whereas in¯uential
studies on money laundering
have shown how most
of these activities or oences constitute predicates for
money laundering, little has been documented to jus-
tify that gambling is also a predicate although some
moneylaunde ring legislation include it as such.
theless, recent concerns are being raised in regard to
gambling and tax evasion as predicates for money
Gambling is a `rational choice' social activity,
which involves the playing and/or placement of
bets, dice, dominoes, cards and so on. There is a
multi-dimensional debate on the issue of gambling.
The ®rst line of argument is whether it should be lega-
lised or not. This perspective is based on the perceived
economic bene®ts of gambling and on social relations
of production. The second line of argument is the
moral persuasion that gambling is `immoral' and
could lead to more social problems especially with
regard to underage gambling. The third argument is
whether gambling should be dealt with as a `crime
problem or a market problem', and so on and so
The argument in this paper is neither in dis-
agreement nor in furtherance of any of these views.
This paper intends to introduce a relatively new
dimension to the debate Ð that is, whether gambling
should be a predicate for money laundering or not.
Accordingly, it will examine the concept of gambling
as a rational choice/routine activity; the scale of the
industry, particularly with regard to its social costs;
and present the arguments for and against gambling
being a predicate for money laundering. The paper
argues that gambling could generate wealth but
there is no good reason to presume that such wealth
is illegal since not all forms of gambling are illegal. It
argues further that gambling is an endeavour like
banking, and since banking is not a predicate for
money laundering, gambling should be an intermedi-
ary rather than a predicate for money laundering, just
as the banks are.
Gambling has a long history in the USA and Hong
Kong for example. In Hong Kong, `horse racing in
the 19th century was a key social mixing place for
expatriates from all countries and the Jockey Club
initially excluded Chinese. The working class engaged
in various gambling games of Chinese origin, such
as tse fa, tin kau and mahjong.
Throughout the
1960s± 1970s, gaming was outlawed everywhere in
the USA except in Nevada.
Gambling could be
explained in the context of neoclassical theory as a
`rational choice or routine activity'. The argument
for the legalisation of gambling is based on the
assumption, and somewhat pious objective of keeping
some illegal forms of gambling in abeyance, thus
Page 254
Journalof Money Laundering Control
Vol.7, No. 3, 2004, pp. 254± 260
#HenryStewart Publications

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT