According to a comprehensive report from the United States Institute of Peace (USIP), China’s stringent laws against gambling, both offline and online, have inadvertently driven organized crime groups into Southeast Asia. This movement allows them to exploit the region’s thriving gambling market while maintaining a safe distance from Chinese law enforcement.

Exploiting regulatory gaps:

The USIP report highlights how the proliferation of scamming operations in Southeast Asia can be traced back to a network of loosely regulated casinos and online gambling platforms. These establishments, encouraged by some governments in the 1990s and 2000s as drivers of economic development, have now become breeding grounds for transnational crime.

The report underscores the global threat posed by transnational syndicates operating from Southeast Asia, impacting consumers worldwide, including those in the United States. It estimates that these syndicates steal funds amounting to nearly US$64 billion annually, underscoring the scale of the problem.

Chinese nationals emerge as primary targets of the overseas gambling industry due to China’s strict prohibition on gambling within its borders. With an estimated annual gaming market of US$40 billion to US$80 billion, Chinese citizens become lucrative targets for criminal networks operating in Southeast Asia.

Growing concerns for Chinese citizens:

As criminal networks gain strength, the Chinese government faces mounting concerns about the safety of its citizens abroad. As GGRAsia reports, Chinese nationals fall victim to various scams, including forced labor through fraudulent trafficking, prompting increased scrutiny from Chinese authorities.

In Southeast Asia, illegal activities often hide behind a veneer of legitimacy, leveraging casinos, resorts, hotels, and special economic zones to evade law enforcement. The dispersion of these networks correlates strongly with areas of weak governance in the region, further complicating efforts to combat transnational crime.

While China has achieved some success in curbing online gambling and fraudulent activities in collaboration with other countries, there remain challenges. Criminal networks adapt swiftly to enforcement measures, relocating scamming operations across borders to evade crackdowns, as witnessed in the closure of scam compounds on Myanmar’s border with China.

Despite efforts to tackle transnational crime, the closure of scam compounds in Myanmar merely displaced criminal activities to neighboring regions such as the Karen State and border areas of Thailand, Cambodia, and Laos. This pattern highlights the complex and dynamic nature of combating organized crime in Southeast Asia.

China’s stringent stance on gambling has inadvertently fueled the expansion of transnational crime in Southeast Asia, posing significant challenges for regional security and law enforcement efforts. Addressing this issue requires enhanced international cooperation and targeted strategies to dismantle criminal networks operating across borders.