North Korean Activity in the Casino and Gaming Sector: How Do Jurisdictions Respond?

Criminal actors exploit under-regulated aspects of the casino and gaming sector to launder and move illicit assets across jurisdictions. This threat is further compounded by the reported involvement of cryptocurrency as a means to move and obfuscate criminal assets. As a result of this shift in design, a new global illicit marketplace has emerged and, as such, jurisdictions need to examine the full scope of threats in the casino sector.

North Korean actors are already known to exploit the cryptocurrency industry and designated non-financial businesses and professions, including casinos, to generate and launder revenue for North Korea’s WMD programme. Within this risk assessment scope, authorities need to understand whether sanctioned entities can exploit these emerging avenues to obscure the source of criminal proceeds and/or offload illicit cryptocurrency.

This paper, intended for policymakers, regulators and compliance officers, outlines proliferation finance activity tied to the casino and gaming sector, as well as the emergence of new avenues of exploitation that authorities should analyse as part of their national risk assessment process. The aim of the paper is to offer a framework of potential risks that policymakers should consider when restricting these avenues, from misuse to finance proliferation, and not to provide investigative details of unknown North Korean activity in the casino and gaming sector.

To achieve this goal, the paper provides an overview of threats and vulnerabilities to enhance a jurisdiction’s exposure to such activities. By reviewing such an analysis, authorities can assess risk that pertains to their jurisdiction and subsequently create an action plan for policy development and enforcement. The paper concludes by providing potential risk mitigation strategies that jurisdictions should consider if threats and vulnerabilities are identified.