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Fake Online Stores Reveal Gamblers' Shadow Banking System (reuters.com)

Posted by BeauHD on from the gambling-industry dept.

randomErr shares an exclusive report from Reuters: A network of dummy online stores offering household goods has been used as a front for internet gambling payments. The seven sites in Europe to sell items including fabric, DVD cases, and maps are fake outlets. The faux store fronts are a multinational system to disguise payments for the $40 billion global online gambling industry. Online gambling is illegal in many countries and some U.S. states. The dummy sites underline a strategy which regulators, card issuers and banks have yet to tackle head-on. The scheme found by Reuters involved websites which accepted payments for household items from a reporter but did not deliver any products. Instead, staff who answered helpdesk numbers on the sites said the outlets did not sell the product advertised, but that they were used to help process gambling payments, mostly for Americans.

28 of 63 comments (clear)

  1. They do this in Japan by Anonymous Coward · · Score: 4, Interesting

    I remember in the 90's seeing people ( in Japan) run out of pachinko halls with dozens of hello kitty pencils and trinkets, to a mysterious "door" front. You could not see who was behind the door. All you know, was these "hello kitty" items yielded some mucho yen.

    1. Re:They do this in Japan by Anonymous Coward · · Score: 1

      This is still done. The halls sell you trinkets for your pachinko balls, which you then sell to a vendor of a completely seperate business for a known price, minus a 1% take. Completely avoids the gambling laws in Japan, and unless someone makes a rukus, the government basically ignores the practice.

    2. Re:They do this in Japan by Anonymous Coward · · Score: 1

      In the Japanese case, they can get around the law because the "goods" do actually exist, although who knows how many times they've been recycled through the system by the time you win them as prizes. You are not gambling for cash, you are playing games for gimmicky prizes, so gambling laws do not apply, even though there is a store out back that trades in second hand gimmicky prizes for more than you might expect them to be worth.

      In the online case, I strongly suspect there are no physical goods changing hands, the site is a pure fraudulent front for people to pay into gambling accounts.

    3. Re:They do this in Japan by drew_kime · · Score: 2

      I'm pretty sure they have a way of tracking whether they came from the right place, and there are a few guys with missing fingers who can explain the penalties for trying to exploit the system.

      --
      Nope, no sig
  2. Vice: perhaps normal life is too dull by rmdingler · · Score: 2
    Gambling is an interesting vice. The numbers game played out locally by organized crime is illegal, but the State-sponsored lottery is not. Betting on the outcome of a sporting event is legal, but only if you live within the arbitrary borders of an amenable State or Indian reservation.

    No rational person imagines that gambling is without consequence for the addicted, yet the message sent by lawmakers is a mixed one at best.

    I have a friend who can't kick cigarettes who wishes they were illegal. Where do we draw the line legislating to protect people from themselves?

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

    1. Re:Vice: perhaps normal life is too dull by networkBoy · · Score: 2

      would your friend stop if they were illegal tomorrow?
      I bet not.

      I tried quitting no less than 5 times, across several years before I was finally successful about 5 years ago. Absolute *bitch* to kick.
      Addiction is defined as: Continued use in the face of adverse consequences. If your friend is so much an addict as to wish they were illegal then the act of making them illegal likely won't be what gets him to finally quit. I do hope he manages to win one of these days though... it's a hell of a struggle to do.

      --
      whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
    2. Re:Vice: perhaps normal life is too dull by fustakrakich · · Score: 1

      Don't try to read anything into it. The 'message' is as phony as a three dollar bill. The laws are simply revenue flow control.

      --
      “He’s not deformed, he’s just drunk!”
    3. Re:Vice: perhaps normal life is too dull by mark-t · · Score: 3, Insightful

      would your friend stop if they were illegal tomorrow?
      I bet not.

      Not the OP here, but if they were illegal, I can imagine this would pose generally present a significantly greater inconvenience for him to get them, and it's not remotely inconceivable that the added inconvenience, coupled with the fact that he would also have to knowingly have to break the law to even get the cigarettes, might exceed the extents to which he is willing to go to satisfy his addiction. The result is that he might go a very long time without cigarettes, and discover that within a few months, he no longer even has any cravings for them.

      Of course, some would likely still find ways around the system, illegally smuggling them into their area and taking sufficient measures to not get caught, but I would expect that the people who are smuggling them into a region where they are illegal are often not even addicted themselves, but are simply wanting to exploit other people's addction, selling them under the table at a profit to parties in their region, but this kind of activity happens "off the radar" and isn't something that a person who isn't actively trying to look for such sources of their addiction (and is quite willing to disregard the law in the process) is going to tend to know how to get. It's certainly not something that you're going to be able to find in your local yellow pages, at any rate... any would-be business or entrepreneurship that attempts to advertise their illegal activity so publicly would be shut down long before they could hope to turn a profit.

      The reason people who use illegal drugs are often willing to resort to illegal measures to get them is because they *already* have a disregard for the law, or else they would not be using the illegal drug in the first place. Existing smokers, addicted to nicotine, which is legally available through cigarettes, do not necessarily have that disregard, so no assumptions about one's indifference to the legality of its availability can be made as it might otherwise apply to drugs that are illegal.

      --
      File under 'M' for 'Manic ranting'
    4. Re:Vice: perhaps normal life is too dull by Dunbal · · Score: 1

      I do hope he manages to win one of these days though

      Then you haven't kicked anything at all. Hoping for a win is exactly how this addiction works. I mean after all if you keep losing often enough you're BOUND to win eventually, right? Flawed logic.

      --
      Seven puppies were harmed during the making of this post.
    5. Re:Vice: perhaps normal life is too dull by Sir+Holo · · Score: 2

      would your friend stop if they were illegal tomorrow?
      I bet not.

      I tried quitting no less than 5 times, across several years before I was finally successful about 5 years ago. Absolute *bitch* to kick.
      Addiction is defined as: Continued use in the face of adverse consequences. If your friend is so much an addict as to wish they were illegal then the act of making them illegal likely won't be what gets him to finally quit. I do hope he manages to win one of these days though... it's a hell of a struggle to do.

      Tell your friend to ask his physician about a prescription for Welbutrin. It kills the urge.

      Your friend should also ignore his physician's advice to avoid nicotine gum while on Welbutrin. Because, hey, there are times when you are trying to quit, and some bitch of a situation comes up. Just one cig might make you feel better... NO. Break off 1/4 or 1/2 of a square of that nicotine gum to get you past the crisis.

      Soon enough, when a crisis hits, your friend won't feel an urge to reach for a tobacco cigarette. Then your friend will have beaten if half-way.

      Quitting tobacco is for life. The urges will eventually fade with the years, but do not be fooled by the, "Oh, just one puff" after 10 years off. The hooks will sink right back into your flesh, and you'll be smoking again.

      In any case, tobacco cigarettes stink; they make you cough; you have to go way outside to smoke; your clothes stink when you come back; and so on. Why any of us ever started is kind of a mystery, at least once you're on the other side of this bitch of an addiction. It's harder than alcohol, and heroin is probably the only one more difficult to kick.

    6. Re:Vice: perhaps normal life is too dull by networkBoy · · Score: 1

      Quitting tobacco is for life. The urges will eventually fade with the years, but do not be fooled by the, "Oh, just one puff" after 10 years off. The hooks will sink right back into your flesh, and you'll be smoking again.

      Hell yeah that's true. I got nailed by that the time before I finally did quit. I had been tobacco free for about 2 years, then one drag and I was back for another three years before finally quitting for good. I had that "one time I'll be fine" delusion that I clearly was wrong about, so now it nothing ever again. Even if I'm around smokers for an extended period for days afterwards I can feel the tingle of desire.

      --
      whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
    7. Re:Vice: perhaps normal life is too dull by mark-t · · Score: 1

      Smokers have been told all their lives that it's bad for them, yet they started anyways.

      They started anyways because they didn't believe that it would actually be hard to quit if it became problematic. This belief undergoes a radical shift once you actually start smokiing and then try to quit.

      I know of nobody who ever started smoking thinking at they time that they know that later, they are going to be almost hopelessly addicted to having cigarettes, and wouldn't be able to quit later even if they wanted to. Yet, this is exactly what happens... people start, get addicted, and through no real failing of their own, simply do not possess the independent resolve to quit.

      If it were illegal, there would be an additional barrier that may impact their cravings more than their own willpower might.

      --
      File under 'M' for 'Manic ranting'
    8. Re:Vice: perhaps normal life is too dull by mark-t · · Score: 1

      . These people who are now considered productive members of society, would suddenly be in jail costing the rest of us money....

      They wouldn't go to jail.... they would just have to pay a fine. Much like speeding, in some respects, actually.

      It's unwise for a society to criminalize so much that everyone is a criminal

      Well, first of all... not everyone smokes. In fact, not even a majority of people smoke. I believe the statistics in North America are currently that fewer than one in six people smoke... and this number is steadily dropping lower and lower every decade.

      And rather than making one out of every six or seven people into criminals, only some percentage of them that chose to break the law thereafter would be. I do not believe that this percentage would be very high. Driving impaired is illegal too, and it this single fact *alone* that tends to discourage at least most people from attempting it (the danger aspect does not factor in that highly, since one may believe they are capable of driving safely even when they are over the legal limit). I believe one would observe something similar with cigarettes, if they were outlawed.

      There are better ways of getting people to quit than making it illegal.

      Perhaps... but the next obvious one of denying medical coverage to people that smoke carries another can of worms.

      I wasn't suggesting that making them illegal would be some kind of magical silver bullet anyways... only suggestiing that it would likely be helpful to no small number of people that *do* wish to quit, but merely lack the independent resolve to do. The law, being something external to themselves, might be a sufficient impetus in many cases to drive them to actually quit.

      You could achieve identical goals if you were somehow simply able to make these people *believe* that cigarettes were illegal, and were somehow able to mask all evidence of their legal availability from them. There is no magical way to accomplish this, however.

      --
      File under 'M' for 'Manic ranting'
  3. Sweden is a paradise for this... by MindPrison · · Score: 4, Interesting

    ...In sweden we have roughly 7.5 minutes of ads running on TV each 15th minute, 5 minutes of those are dedicated ads, and 2.5 minutes are self-ads (promos for TV shows + sponsors).

    The point I am making here - is to point out just HOW lucrative Online gambling is - it's the internets next "porn" industry.

    Let's say that there are 10 x 30 second ads during those 5 minutes of pure ads on Swedish tv - guess how many of them are ads for Online Casinos, betting and gambling sites? Half of them, and sometimes over. yes - thats at least 5 ads for Online Gambling each 15 minutes of TV space. And thats not counting the numerous "sponsored by this-and-that-betting".

    A sure shot how lucrative this is - is how many TV stars and former Sports Champions gets paid to "endorse" the Online gambling.

    Of course they have to have their entirely own Banking system!

    --
    What this world is coming to - is for you and me to decide.
    1. Re:Sweden is a paradise for this... by mentil · · Score: 1

      How long has that been going on? It might just be a bubble, before a bunch of those online casinos collapse as they realize it's not profitable enough. Remember the Apps bubble circa 2010, when everyone thought making a mobile app would make them an instant millionaire. Given that online casinos have been around for decades, I don't think they could be called "the next big thing," although I could see them being more popular than porn in a more sexually-liberated society.

      --
      Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
    2. Re:Sweden is a paradise for this... by MindPrison · · Score: 2

      For a really long time. Ever since I came here, the ads of this kind has EXPLODED (literally). It's now to the point of public nuisance, people literally discuss online how annoying it is with all these gambling and casino ads. For me it's enough to make me turn off the TV because it's pure brainwashing. So it's pretty obvious it must be HUGE business, otherwise they wouldn't toss this kind of money into all that advertising. Even Swedens biggest online forum (kind of like a Swedish version of Reddit if you like) has literally nothing but Gambling Ads.
       

      --
      What this world is coming to - is for you and me to decide.
    3. Re:Sweden is a paradise for this... by LordWabbit2 · · Score: 1

      I used to work for an online betting company (it's legal where I am) and the sad fact was when the Lehman Brothers collapsed in 2008 their betting volume WENT UP. It's actually sad really, people who were having financial difficulties before the collapse decided to use what little money they had left to put on more bets??? They clearly suck at math. Part of our job was to pull stats and reports etc. and only a handful of people in their active user list actually came out ahead.

      --
      There are three kinds of falsehood: the first is a 'fib,' the second is a downright lie, and the third is statistics.
  4. Real Money Trading by mentil · · Score: 1

    This reminds me of RMT, or 'Real Money Trading' in games like World of Warcraft, where people pay real money for virtual items. In particular, people purchasing ingame currency using real-world currency. These players would purchase an easily-found item sold by readily-available NPCs in infinite amounts, and then 'sell' that item to another character in exchange for a huge amount of ingame money that they had actually bought ahead of time outside of the game. I believe Runescape was the first online game to crack down on this practice, and World of Warcraft did so later, IIRC.

    Ingame gambling was also popular in Everquest (utilizing the ingame random number generator, which was honestly horrible), which carried over to World of Warcraft, but it was banned in the latter shortly after launch.

    --
    Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
  5. Darn, I'm late! by Robert+Goatse · · Score: 1

    As a former online poker player, I shed a tear or two when it was darn near impossible to deposit money in my account. If I only would have known about these schemes I would still be playing.

  6. Re: Millennial version of this scam... by Anonymous Coward · · Score: 1

    In other words, if you can afford it, just get the big dick surgery. Then become a pornstar. Make your dick pay for itself.

  7. Blew their cover pretty stupidly! by danielsfca2 · · Score: 1

    > staff who answered helpdesk numbers on the sites said the outlets did not sell the product advertised, but that they were used to help process gambling payments

    "Nice job moron! You blew our cover!"

    How do you not train your people on day 1 of the job at a money laundering outfit, that you don't admit to anyone that you're not a real shop. If anyone should call in complaining that they didn't get their goods (I'm assuming cops ordered items and called in to inquire about the order), apologize, say that item's been backordered, and give them a refund. I'm pretty amused by how dumb they were to admit that outright!

    1. Re:Blew their cover pretty stupidly! by porges · · Score: 1

      The article says (or implies) that they tell who they are so that when the gambler wonders why there is a charge from some fabric store on his card and contacts that vendor, he doesn't challenge the charge.

    2. Re:Blew their cover pretty stupidly! by danielsfca2 · · Score: 1

      The article says (or implies) that they tell who they are so that when the gambler wonders why there is a charge from some fabric store on his card and contacts that vendor, he doesn't challenge the charge.

      Still seems like that should go out via the channels of the gambling site and not the help desk of the fake store. but I'm not a pro money launderer so maybe I'm missing something else. :D

  8. Re: Millennial version of this scam... by davester666 · · Score: 1

    Statement made to children: "Daddy has to go to work now, because he has a dick payment to make. If I have to pay for it, it has to earn it's keep. Think about it kids. Not about my dick. About how I have to pay for you."

    --
    Sleep your way to a whiter smile...date a dentist!
  9. Re:Millennial version of this scam... by davester666 · · Score: 1

    Trump's head is egg-shaped. Coincidence?

    --
    Sleep your way to a whiter smile...date a dentist!
  10. They actually admitted their purpose? by Khyber · · Score: 1

    You're not supposed to give away the fact that you're running a scam/front/laundering business. That's kinda Shady Business 101.

    --
    Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
  11. Re:Khyber you = a shitty criminal. Don't advise! by Khyber · · Score: 1

    And with this I prove your ass is busted. Thank you city council members for doing your civic duty in clearing an innocent person's name.

    http://i.imgur.com/WF4xClT.png

    I'll be seeing you in court, Alexander P Kowalski.

    Further proving APK is a lying sack of shit since his bitch ass showed up on Slashdot.

    --
    Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
  12. Re:it just goes to show by desdinova+216 · · Score: 1

    the problem is there is too much money involved in prisons currently to change the mindset to treating addiction as a medical problem in the US.