Casinos to Crypto: How Cybercriminals Launder Money
Bengaluru, August 8, 2025 — Recovering money swindled from victims of cyber crimes has become an increasingly complex challenge for law enforcement agencies. According to senior police officials and investigative reports, cybercriminal networks are employing sophisticated methods that involve collusion with casinos, online betting apps, and cryptocurrency exchanges to launder illicit money. This evolving trend significantly complicates the money trail and hinders efforts to track and recover the stolen funds.
Case Study: The Hidden Web of Money Laundering
About two months ago, a cab driver from Hyderabad, named Manjunath (name changed for privacy), found himself unexpectedly entangled in a cybercrime investigation. He received an official summons from the Bengaluru South East Division Cyber Crime Police, requesting his appearance for questioning regarding a suspicious money transaction detected in his bank account.
Manjunath had unknowingly become part of a complex money laundering scheme. His bank account had received funds that traced back to a victim of a courier fraud — a scam where cybercriminals impersonate customs or law enforcement officials to intimidate victims into transferring money under false pretenses. On investigation, it turned out that Manjunath’s landlord, Eshwar, a businessman with a known interest in casinos, had used Manjunath’s account in a bid to avoid tax complications.
But the plot thickened. Authorities discovered that Eshwar had recently visited a casino in Sri Lanka, where he purchased chips using legitimate money but returned them midway for a refund. The casino credited the refund to Manjunath’s bank account on Eshwar’s instruction. Investigators concluded that this overseas casino was linked to cyber fraudsters operating in India, using the casino’s refund system as a conduit to launder proceeds of crime.
The Convergence of Networks
This incident is emblematic of a growing pattern. Senior police sources reveal that cybercrime rings are increasingly interlinked with a variety of financial conduits — including traditional hawala networks, crypto currencies, casinos, and online betting platforms. These overlaps create a mesh of transnational money laundering pathways, making enforcement and money recovery more difficult.
The Directorate of Enforcement (ED), India’s federal agency tasked with combating money laundering and foreign exchange violations, has ramped up involvement in cybercrime investigations, reflecting the complexity and reach of these schemes. The money flow often spans multiple Indian states and extends overseas, complicating attempts to trace and freeze illicit assets.
Casinos: A Preferred Laundering Channel
Indian cyber fraudsters often collaborate with foreign partners through agents representing overseas casinos. These agents operate within India, facilitating fund transfers. Crime proceeds are paid to casino agents in India, who then remit corresponding amounts to the offenders’ associates abroad. Conversely, casinos sometimes employ cybercrime networks to make certain payments, integrating illicit funds into the legitimate financial system.
The case involving Eshwar exemplifies this casino route, highlighting how overseas gambling establishments can inadvertently or deliberately serve as intermediaries in laundering cybercrime proceeds.
Online Betting Apps: A New Money Laundering Frontier
Another increasingly exploited avenue is online betting applications. Recently, the ED summoned over 25 celebrities in connection with a significant money laundering case linked to online gaming platforms under the Prevention of Money Laundering Act (PMLA), 2002. Pronab Mohanty, Director-General of Police and head of the newly established Cyber Command Unit (CCU), acknowledged that numerous cybercrime investigations have uncovered money laundering operations through online betting platforms. These apps often use virtual coins or chips purchased with real money. Winners are compensated in cash or through accounts that cannot be linked to them directly, as the apps outsource payments to cybercrime networks. These networks then reimburse winners with cybercrime proceeds and recoup their costs later, typically via overseas transactions.
These betting apps frequently operate without official verification. They bypass mainstream app stores by being distributed through unofficial channels such as social media or Telegram. Law enforcement officials warn users against downloading such unverified apps, emphasizing the risks involved.
Cryptocurrencies: The Digital Cloak
Cryptocurrencies remain a favored tool for cybercriminals aiming to launder money. A senior Criminal Investigation Department (CID) officer explained that perpetrators open wallets on crypto exchanges and deposit stolen funds. They receive equivalent cryptocurrencies that are then transferred internationally to other criminals.
In some cases, stolen money is funnelled through legitimate-looking “mule” accounts before being moved to crypto exchanges. Despite the theoretical ability to trace crypto transactions, practical enforcement is hampered by legal loopholes — such as the inability to freeze crypto wallets under current Indian regulations. Moreover, when fraudsters move funds into private wallets not tied to exchanges, the trail effectively vanishes, shielded by encryption and anonymity.
Challenges and Outlook
The convergence of cybercrime with casinos, betting apps, and cryptocurrencies underscores significant gaps in the banking and regulatory framework designed to prevent money laundering. The use of foreign casinos, cross-border transactions, digital and decentralized currencies, and virtual betting economies has created a convoluted money laundering ecosystem.
As cybercriminals innovate their laundering tactics, authorities are struggling to keep pace. Enhanced international cooperation, stricter enforcement of existing laws, and the implementation of robust regulatory frameworks for cryptocurrencies and online betting platforms are critical to countering these threats.
Authorities continue to urge citizens to exercise caution in their online financial dealings, remain wary of unverified gaming platforms, and promptly report suspicious activities to help curb the tide of cyber-enabled financial crimes.
This report highlights the growing complexity of cybercrime-related money laundering facilitated through diverse and increasingly sophisticated channels, as covered by The Hindu on August 8, 2025.