Legalized gambling is one of the biggest gifts for criminals. It's basically money launderers gift to heaven. All you have to explain is how you came up with the amount for a winning bet, rather than having to explain how you came up with the winnings plus how much you lost to the house.
Not that I think it should be outlawed. But I think it makes more sense to not make money laundering a crime, and allow criminals to put the money straight in the bank rather than having to do this dance where we pretend it is going to gambling or houses or whatever and meanwhile legally enriching even further a bunch of people who otherwise are generating far less 'value' for society.
I don't think it's quite that simple to launder ill-gotten money as "gambling winnings". I'm pretty sure I've seen somewhere (maybe a TV show) that legal gambling establishments have to report winnings to the government. So you need someone on the inside to make false reports.
I don't know the IRS's stance on money claimed to have been won in unauthorized, backroom card games.
The fact that the winnings are reported is a plus, not a negative; there is no need for the casino to do anything in violation of the law. The key here is the losses often don't have to be reported but the winnings do. Thus the winnings are clean reported money, won on (what could plausibly be) a tiny amount of long-shot wagers. Justifying the small amount of income needed to win a long-shot bet is far easier than justifying a sum as large as the winnings. Having reported legal gambling income solves that problem and the criminal now has taxed, reported, legal income and all they lost was the cut to the house plus the normal taxes everyone else pays.
Illegal casinos wouldn't solve that problem as they'd be back to square one of explaining the legal source of a large amount of money.
> there is no need for the casino to do anything in violation of the law
They have to report that a gambler (actually criminal money launderer) won money that they did not. They would also claim fake equivalent losses on their business taxes - it would be very suspicious if they did not.
I don't follow. The launderer bets all their money on the up and up, and does actual gambling. They win back some percentage of that. The winnings are reported and now appear as legal and taxed income which can easily be banked. The casino doesn't have to do anything illegal or have any specific knowledge of what is happening.
> The launderer bets all their money on the up and up, and does actual gambling. They win back some percentage of that.
Ok? So the hypothetical MO is: Go to a casino, buy $200 worth of chips with cash, gamble till there's $150 left, then cash the chips out? And that's "clean" money?
Because unless the launderer is good at gambling they aren't walking away with more money than they walked in with. And if done consistently it will still draw questions about where the initial $200 came from (assume it's more like $2m).
I've never gambled in a casino so I don't know how this would work.
As a simplified and extreme example just for illustration, imagine a launderer going to a million gas stations and buying a $1 lottery ticket in cash from each one until they've got most the tickets.
When they win the lottery, one gas station reports the winnings of $800,000 on a $1 bet. Launderer reports earning $1 selling a Pokémon card, and $800,000 winning the lottery. Other gas stations and dirty income, unreported, as small losses dont require individual reporting.
End result is $800,000 clean on $1,000,000 of dirty money and only $1 has to be explained.
For casinos, it's likely something closer to buying chips under the reporting threshold, losing most of them, and keeping on until winning a longshot bet. Or just claiming they are a card counter or some nonsense as to how they keep it up. The fact they lose some money to the house is just the cost of doing business. The fact winnings are reported, desirable.
I'm beginning to think you don't want to understand, rather than you can't. I made it explicit the initial example was an extreme example just for illustration, not to give the least labor intensive process nor to provide in black and white a conspiracy blueprint for someone to follow.
Not that I think it should be outlawed. But I think it makes more sense to not make money laundering a crime, and allow criminals to put the money straight in the bank rather than having to do this dance where we pretend it is going to gambling or houses or whatever and meanwhile legally enriching even further a bunch of people who otherwise are generating far less 'value' for society.