APG Links Scam Hubs to Pandemic-Era Gaming Decline

A new report from the Asia/Pacific Group on Money Laundering (APG) says the decline of Southeast Asia’s gaming-compound industry during the Covid-19 pandemic contributed to the emergence of cyber scam hubs. The report also noted that some gambling compounds later converted into scam centres may have already been operating illegally or without valid licences.

Pandemic Disruption Led to New Criminal Activity

The 83-page report explains that lockdowns and tighter border restrictions during the pandemic left casinos and hotels in special economic zones unable to generate the revenue previously derived from illegal gambling and other organised criminal activities.

According to the APG, many of these locations were subsequently converted into cyber scam compounds where human trafficking victims were forced to work.

The organisation stated that many cyber scam hubs can trace their origins to the collapse of the regional gaming-compound business in early 2020. Several of these sites had previously operated as casinos or hotels before being repurposed for online scam operations.

The APG, an intergovernmental organisation focused on combating money laundering and terrorist financing, has 42 member jurisdictions across the Asia-Pacific region.

The report identified key areas affected by the issue, including border regions between Thailand, Myanmar, Laos PDR and Cambodia, as well as the Myanmar-China and Philippines borders. It noted that while Laos, Cambodia and the Philippines have regulated casino industries, there is no suggestion that licensed casino operators were involved in the scam activities.

Scam Hub Locations and Workforce Structure

The report highlighted several special economic zones where cyber scam hubs have been identified, including Dara Sakor and Henge Thmorda in Cambodia, the Golden Triangle Special Economic Zone in Laos PDR and Clark Freeport Zone, Bamban in Tarlac and Cebu in the Philippines.

According to the APG, these operations function as pseudo-legitimate businesses, with ownership often linked to Chinese-speaking diaspora groups supported by mixed management teams. Their workforce is made up of Indian nationals alongside trafficking victims from Africa, South Asia and Southeast Asia.

The organisation also said the Philippines' ban on offshore gaming and related activities had an immediate impact on reducing the number of cyber scam hubs in the country. The report also examined several cases involving Philippine Offshore Gaming Operators (POGOs), a former licensing framework under PAGCOR.

Philippine Investigations

One case described in the report involved a late-2024 raid on a compound connected to an unnamed company suspected of operating both offshore gaming activities and a cyber scam centre. Authorities also linked the company to alleged human trafficking, illegal online gambling, fraud and money laundering.

Law enforcement officers raided a 2.6-hectare compound consisting of several buildings, where approximately 900 workers were rescued. Following the operation, officials opened multiple safes under a court order and recovered cash amounting to PHP113 million (around US$1.8 million).

The APG also referred to a separate case in Bamban involving a POGO allegedly connected to a politically exposed person. Investigators alleged that funds originated from romance and investment scams carried out by trafficked workers, with victims persuaded to transfer money through fake relationships and cryptocurrency investment schemes.

According to the report, the investigation began through intelligence sharing between agencies and surveillance operations. Joint enforcement actions were carried out by the Presidential Anti-Organised Crime Commission and the Philippine National Police with support from international law enforcement agencies and possible reports from financial institutions.

Money Laundering Methods and International Cooperation

The APG said suspicious transaction reports were submitted to the Philippines' Anti-Money Laundering Council during the investigation.

Authorities used search warrants and digital forensic tools to analyse seized electronic devices and track financial transactions.

The report also highlighted the importance of cooperation with authorities in Australia and China in tracing cross-border financial flows and identifying victims.

According to the APG, 65% of its members reported that criminal groups commonly relied on complex corporate structures, including shell companies and front businesses, to launder proceeds generated by cyber scam hubs.

In its executive summary, the organisation concluded that further research into emerging criminal methods including decentralisation, dissipation techniques and artificial intelligence is needed, alongside stronger cooperation with civil society organisations and NGOs to support future policy and enforcement efforts.