Across the globe, regulators, lawmakers, integrity agencies and casino operators are constantly monitoring the sector, playing a key role in the fight against unlawful actions such as illegal gambling. money laundering, scams and other crimes.

Despite the efforts of stakeholders, many bad actors continue to target the gambling sector in an effort to launder proceeds or, in some cases, pretend to offer legitimate services to obtain data, putting not only money but also sensitive personal information at risk.

In Southeast Asia, collaborative efforts constantly combat criminal attempts, including large-scale scam centers, illegal gambling operators and other unlawful schemes. While those efforts are ongoing, a new report acknowledges the adaptability of crime syndicates that are reportedly constantly evolving in order to continue their operations and avoid detection.

Crackdowns temporarily disrupt criminal groups that easily reappear in other locations

The actions of transnational organized crime groups in East and Southeast Asia are a prime focus of a new report by the UN Office on Drugs and Crime (UNODC). Per the new report, while law enforcement continues to crack down on such crime syndicates, those groups are still able to evade the law and at the same time continue to grow their operations to remote areas and nearby countries.

Infamous scam centers have become a breeding ground for romance scams, pig butchering and illegal gambling among other unlawful activities, including money laundering and human trafficking. Often, such centers are located in Southeast Asia and countries such as the Philippines, Cambodia, Laos and Myanmar.

While usually such scam centers are positioned near special economic zones, known as SEZs, the growing crackdown pressure has resulted in their displacement and spill over into other regions, the UNODC report warned. Equally concerning is the fact that illegal gambling and scams generate billions in unlawful proceeds and some criminal syndicates are reinvesting those funds, "leveraging vast multi-lingual workforces comprised of hundreds of thousands of trafficked victims and complicit individuals," as explained by the new report.

UNODC's report, titled Inflection Point: Global Implications of Scam Centers, Underground Banking and Illicit Online Marketplaces in Southeast Asia, also explains: "While crackdowns disrupt existing operations, these continuously reappear in other purpose-built business parks developed to house and service more online crime operations. The venues and businesses feature all of the conditions, infrastructure, and regulatory, legal, and fiscal covers required for sustained growth and expansion."

Transnational organized crime groups in East and Southeast Asia at a glance

• Targeted regions: Cambodia, the Philippines, Vietnam, Laos, Myanmar
• Unlawful activities: romance scams, illegal gambling, phishing operations, investment fraud, money laundering, human trafficking
• Primary targets: foreign victims, usually individuals located in North America and Europe
• Estimated annual profits: $40bn

Crime syndicates deploy a hedging strategy against future disruptions and regulatory scrutiny

But what is the size of the transnational organized crime groups in East and Southeast Asia? According to UNODC's report, industrial-scale scam centers engaging in unlawful activities such as illegal gambling, romance scams and fraud, among others, generate profits of nearly $40bn annually.

Equally concerning, the latest report acknowledged that such "sophisticated criminal networks" constantly attract new players and victims while at the same time, exacerbate other issues such as corruption and other crimes. To make matters worse, the enormous profits enable organized crime groups to easily reinvest millions into new scam centers, allowing them to scale up their operations.

Benedikt Hofmann, UNODC's Acting Regional Representative for Southeast Asia and the Pacific, commented: "We are seeing a global expansion of East and Southeast Asian organized crime groups." Moreover, he pointed out: "This reflects both a natural expansion as the industry grows and seeks new ways and places to do business, but also a hedging strategy against future risks should disruption continue and intensify in the region."

Using ill-gained funds and business fronts that cover their real operations, transnational crime groups evade the law and easily establish new venues in cases of crackdowns.

Image credit: Pixabay.com

Hofmann compared the ongoing spread of organized crime groups to cancer, adding that while law enforcement may treat it in one area, "the roots never disappear; they simply migrate."

He elaborated further: "This has resulted in a situation in which the region has essentially become an interconnected ecosystem, driven by sophisticated syndicates freely exploiting vulnerabilities, jeopardizing state sovereignty, and distorting and corrupting policy-making processes and other government systems and institutions."

According to Hofmann, the ongoing geographical expansion of such unlawful groups and their proficiency in carrying out operations reaffirms that this sector has reached a new level. Finally, he acknowledged that lawmakers, regulators and governments in the region need to be prepared to address the growing cyber-enabled fraud that leverages innovation to reach individuals across the globe.

The UN Office on Drugs and Crime's report includes important recommendations

UNODC's report highlights a range of recommendations that can ultimately help clamp down on transnational organized crime groups operating in East and Southeast Asia. The white paper points to the importance of raising political awareness and the need for such actions to be supported by senior-level government officials in the affected regions.

Scam centers and illegal gambling operators continue to flourish in the region and there are several key factors that play a vital role. The use of cryptocurrency allows such criminal groups to move ill-gained funds. At the same time, more platforms are leveraging innovative AI solutions to lure more victims, or in the case of online gambling, keep the players hooked and ensure they continue to spend more money.

Undoubtedly, strengthening regulatory frameworks in the region can bring meaningful changes and that is precisely one of UNODC's recommendations. "Effective prevention and enforcement depend on well-designed legal and regulatory systems that can respond to evolving threats. Closing legislative gaps and aligning frameworks with international standards will help limit the opportunities for criminal exploitation," the newly released report reads.

Elaborating further, UNODC's report pointed to the importance of legal frameworks that challenge threats such as money laundering and better regulate land-based casinos and online gambling activities. At the same time, it is imperative to implement mechanisms that oversee financial activities and use supervisory and licensing tools that help monitor providers identified as high-risk.

Matej Novota, Casino Guru's Head of Casino Research, highlighted the importance of regulation as a way to combat unlawful activities. He explained:

"As the UNODC report makes clear, where regulation and enforcement are absent, organized crime moves in swiftly. Unregulated markets don't stay empty—they become breeding grounds for exploitation. A well-implemented regulatory framework isn't just a policy choice; it's a shield against criminal takeover," Matej Novota, Casino Guru's Head of Casino Research

Another important recommendation outlined in UNODC's report focuses on enhancing the technical and operational capacities of enforcement agencies that combat organized crime. Leveraging new tools, incorporating skills and innovative systems, such agencies can disrupt transnational crime groups.

Last but not least, the recent white paper promoted the collaboration between agencies and encouraged whole-of-government responses. Ultimately, such collaborative efforts achieved through national coordination between agencies and governments can not only dismantle organized crime groups but also serve as a deterrent.

A proactive approach and collaboration can play a major role in the fight against crime

Undoubtedly, the size of scam centers in Southeast Asia that generate billions in annual profits is concerning, to say the least. With thousands, if not tens of thousands of people from across the globe falling victim to illegal gambling, romance and other scams run by such centers every month, the need for effective methods and ongoing collaborations between countries in the region to combat such unlawful activities is ever so great.

While coordinated efforts against criminal syndicates are not uncommon for the region, the use of cryptocurrency, exploitation of financial institutions and corruption create unnecessary obstacles.

Image credit: Pixabay.com