Korea at risk of becoming criminal money hub

Concerns are growing that South Korea could emerge as a target for international organized crime as illicit funds displaced by China’s intensified crackdown on casinos migrate to Southeast Asia, including Cambodia, in what is known as the balloon effect. Experts warn that South Korea’s visa-free casino access in Jeju and its advanced financial system could make the country appealing to criminal networks seeking more sophisticated money-laundering channels than those found in Southeast Asia’s lawless regions.

According to a 2024 report by the United Nations Office on Drugs and Crime, the flow of illicit funds has shifted sharply since the Chinese government dismantled Macau’s junket industry. Junkets operate as closed networks in which casino operators lease space to attract high-net-worth gamblers and have long functioned as key conduits for fund transfers involving China’s elite and organized crime groups. The number of licensed junkets in Macau plunged from 235 in 2014 to 36 last year, with only about 10 still operating.

Funds displaced from Macau initially flowed into Mekong River countries in Southeast Asia with looser regulatory oversight, including Myanmar, Cambodia, and Laos. Rapid digitalization, combined with the expansion of large-scale illicit economies, has created conditions in which casinos and organized crime readily intersect. The UNODC said the region is home to more than 340 online and offline casinos that have become deeply intertwined with scams, illegal online gambling, and human trafficking, forming what it described as a vast criminal ecosystem. The agency warned that Southeast Asia has become a testing ground for organized crime and that inadequate responses could lead to unprecedented consequences with global repercussions.

Experts caution that South Korea is not immune to these developments. International criminal networks seeking to launder money often use the country as a transit point rather than a final destination. South Korea’s reputation for financial transparency can be exploited to move funds discreetly, either before reaching their final destination or during remittance, making detection more difficult. Jeong Ji-yeol, director of the Korea Anti-Money Laundering Institute, said authorities must maintain constant vigilance against those attempting to launder illicit funds.


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