Buying National Lottery products can not only make you ‘outrageously rich’ like the advert says, but criminals are also increasingly using scratch cards and other opportunities afforded by the games of chance sector to launder money. Former Belgian finance minister and ex-European commissioner Didier Reynders (Francophone liberal/MR) may also have been guilty of it. The CFI, the government agency specialising in combatting money laundering, has been warning about this phenomenon for years.
‘Fighting corruption is fundamental to upholding the rule of law’. In late 2020, European justice commissioner Didier Reynders stressed the importance of fighting corruption. 4 years later, he is named in a fraud investigation.
According to the investigative journalism platform Follow The Money and daily Le Soir, Mr Reynders has for years allegedly been laundering money using National Lottery scratch cards. He is said to have used e-tickets. These are vouchers with a value of up to 100 euros that you can buy with cash, at a newsagent’s. You can then convert the e-tickets into money on your National Lottery online gaming account. With that money, you can take part in the lotto online or buy scratch cards, but you can also transfer cash to your bank account.
Winnings are paid into this gaming account and can then be transferred to your own account. That’s the way the money is laundered! The origin of the money in your account is clear and, in most cases, nobody raises an eyebrow.
A guaranteed minimum profit!
The technique may surprise. More often than not, playing the lotto or buying scratch cards means losing cash rather than winning money. The chance of losing money by laundering it that way exists. But if you play regularly and with a lot of money, it is a calculated risk.
A minimum profit per pack of lottery tickets is guaranteed. In this way, the National Lottery ensures that no packets are marketed without containing a winning ticket.
Certain types of scratch card are known to have a higher chance of getting your deposit back. These are often lottery products where you can’t win a big jackpot. On Subito 10-euro scratch cards, you win back an average of 73 per cent of your stake mathematician Rudi Penne calculated for daily Het Laatste Nieuws last year. This technique of money laundering does cost money, but so do other forms of money laundering most of the time.
Increasingly popular among criminals
Money laundering using games of chance has been on the rise in recent years. The Financial Information Processing Unit, the CFI has also noticed this. Banks, for instance, have to report their suspicions of money laundering to the government agency. It is understood to have been the CFI that reported Mr Reynders's practices to the public prosecutor.
In recent annual reports, the CFI repeatedly warned about the use of games of chance in money laundering. ‘The games of chance sector is increasingly being used by criminals to launder money from illegal sources. The games of chance sector has vulnerabilities that have been pointed out repeatedly before both at home and abroad.’ The CFI has also sounded the alarm and alerted the Games of Chance Commission to the dangers.
The CFI often sees the technique Mr Reynders is suspected of using being employed by drug criminals. ‘The cash from the illegal sale of narcotics is used to buy payment vouchers. These vouchers are used to feed an account at an online casino. That account is then debited and monies are transferred to an accomplice's bank account. Little of the money is ever used to gamble or play on casino websites.’
Purchasing winning lottery tickets
Criminals often gamble and by doing so have fun while they are doing something that is useful to them, the CFI argues. Games of chance have ‘a special appeal’ because they combine the pleasure of gambling with the opportunity to launder money.
Fraudsters using the National Lottery looks rather exceptional. Criminals usually turn to international online betting agencies or lotteries.
The CFI also sees another form of money laundering using scratch cards becoming more common. This involves criminals looking for people with a winning lottery ticket. They buy that lottery ticket for a higher amount than the winnings. For example, they purchase a ticket with winnings of 100 euros for 120 euros in cash, illicit money. This way, the winner has an even bigger profit and the buyer launders his or her cash.
New European agency being launched
In Belgium, little has changed with regard to checks and regulations since the CFI first warned about the phenomenon a few years ago.
The Games of Chance Commission, the Belgian regulator, has been criticised for many years. There are even politicians calling for the commission to be replaced by another body.
In Europe, the fight against money laundering is intensifying. Just this year, the European commission, of which Mr Reynders was a member, decided to set up a new anti-money laundering agency AMLA. The agency should ensure a better and more uniform approach to money laundering across Europe. If all goes well, the agency will become operational next year.