Following is a question by the Hon Nixie Lam and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (October 14):

Question:

     It has been reported that, over the years, unlawful organisations have operated illegal gambling activities through online platforms and used concealed channels, such as stooge accounts, to handle gambling funds. In this connection, will the Government inform this Council:

(1) in the light of the distinctive nature of illegal online gambling, under which betting funds are transferred through online channels, of the measures the authorities have put in place to support financial institutions in introducing smart technology systems that can automatically detect and proactively intercept transactions relating to illegal betting, and issue risk alerts to members of the public in a timely manner;

(2) of the number of persons arrested in the past three years for money laundering activities involving the use of stooge accounts to handle money from illegal betting, and among such cases, the total number of those in which prosecutions were successful, with a breakdown by type of stooge account (e.g. bank accounts and electronic wallet accounts); and

(3) as it is learnt that criminal syndicates commonly disseminate information on illegal betting through social media, messaging applications and key opinion leaders, whether the authorities will, with reference to overseas experience, enact legislation requiring online platforms to discharge statutory duties to screen, remove and report information relating to illegal betting, and empowering law enforcement agencies to mandate platforms to remove unlawful content, ban offending accounts and block traffic, while at the same time formulating a penalty mechanism for platforms, with a view to combating the promotion of illegal gambling at source; if so, of the specific legislative approach and timetable; if not, the reasons for that?

Reply:

President,

     Illegal gambling is an indictable offence under the Gambling Ordinance (Cap. 148). Pursuant to the Organized and Serious Crimes Ordinance (Cap. 455) (OSCO), any person who knows or suspects that any property is connected with the proceeds of an indictable offence, including illegal gambling, is required to promptly file a suspicious transaction report (STR) with the Joint Financial Intelligence Unit (JFIU).

     Having consulted the Home and Youth Affairs Bureau, the Security Bureau, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC), my reply to the three parts of the question is as follows:

(1) Under the existing regulatory framework, various regulated entities (including banks and stored value facility (SVF) licensees regulated by the HKMA, as well as licensed corporations and licensed virtual asset trading platforms regulated by the SFC) must establish effective and appropriate anti-money laundering and counter-financing of terrorism (AML/CFT) controls, covering customer due diligence, transaction monitoring, and suspicious transaction reporting.

     Regarding transaction monitoring, regulated entities are required to establish ongoing monitoring and transaction monitoring systems that are commensurate with the nature, size and risk profile of their businesses to promptly identify transactions inconsistent with a client's background or financial profile. Depending on the level of risk identified, regulated entities should adopt appropriate measures, such as conducting stricter customer due diligence, verifying client instructions, restricting or suspending transactions, and refusing to execute transactions. In addition, after filing STRs, regulated entities have to co-operate with law enforcement agencies on their follow-up actions as appropriate, including restricting or suspending the operation of relevant accounts, and restraining or freezing relevant assets, in accordance with the directions of law enforcement agencies or court orders.

     The HKMA and the SFC have respectively issued detailed guidelines pursuant to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), setting out the AML/CFT controls that various regulated entities should implement to combat money laundering and terrorist financing (ML/TF) activities.

     To assist the industry in more promptly and accurately identifying and mitigating ML/TF risks, the HKMA and the SFC will continue to engage with the industry and promote the responsible use of technologies such as artificial intelligence. Specifically, the HKMA has organised various industry sharing sessions to encourage banks and SVF licensees to enhance their application of new and emerging financial technologies and assist them in applying artificial intelligence within their transaction monitoring systems, thereby enhancing their ability to detect illicit financial activities. Meanwhile, in November 2024, the SFC published the Report on the Adoption of Regtech for Anti-Money Laundering and Counter-Financing of Terrorism to share practical use cases and good practices adopted by licensed corporations in key AML (Anti-Money Laundering) processes such as customer due diligence, transaction monitoring, and management information reporting. The aim is to encourage and assist the industry in adopting Regtech (including artificial intelligence) more widely in a responsible manner according to the nature, scale and risk profile of their businesses, thereby enhancing the effectiveness of AML efforts.

     In respect of intelligence sharing, the HKMA and the SFC have maintained close co-operation with the Hong Kong Police Force (HKPF) and the industry to share intelligence in a timely manner, including the latest ML (Money Laundering) typologies and modus operandi, related fund flows, the use of stooge accounts, and red flag indicators of suspicious transactions, with a view to assisting regulated entities in promptly updating their transaction monitoring scenarios and risk-mitigating measures. In addition, the Fraud and Money Laundering Intelligence Taskforce, an intelligence-sharing platform comprising the HKPF, the HKMA, banks, and SVF licensees, has circulated multiple alerts to share emerging threats and the latest modus operandi regarding illegal gambling with the industry.

(2) Section 25 of the OSCO stipulates that a person commits an offence (i.e. ML) if they deal with any property that they know or have reasonable grounds to believe represents the proceeds of an indictable offense, including illegal gambling. Apart from using stooge accounts to launder money, selling or lending bank accounts to be used as stooge accounts may also constitute the aforementioned criminal offence. Over the past three years, statistics on the numbers of persons arrested, prosecuted and convicted for ML involving stooge accounts are set out in the Annex.

(3) As a matter of policy, the Government does not encourage gambling. To address the possible problems brought by gambling, the Government adopts a multi-pronged strategy including law enforcement against illegal gambling activities, public education on the harms of gambling addiction, provision of counselling and support services to people in need, and regulation over gambling activities through legislation. The HKPF has been closely monitoring the trend of illegal gambling crimes, conducting cyber patrols and gathering intelligence through different channels, and taking appropriate intelligence-led enforcement actions against these illegal activities. Besides, the HYAB established the Ping Wo Fund (PWF) in 2003 to finance both preventive and remedial measures to address gambling-related problems.

     To address problems arising from illegal online gambling, the PWF has accorded priority to providing funding support for initiatives relating to the prevention of online gambling activities since 2020. The PWF has been disseminating anti-gambling messages to the public through various channels, and will continue to remind the public that participating in illegal gambling (such as betting with an illegal bookmaker) is an offence under the Gambling Ordinance, regardless of whether it takes place online or offline, such as placing bets with an illegal bookmaker through a simple tap on mobile phone. Upon conviction, an offender is liable to a maximum penalty of a $50,000 fine and imprisonment for nine months. Furthermore, under the Gambling Ordinance, no person shall, whether online or offline, knowingly promote or facilitate bookmaking or betting with a bookmaker. Upon conviction, an offender is liable to a maximum penalty of a $5 million fine and imprisonment for seven years. Through various publicity and education programmes, we will continue to enhance public awareness, particularly among young people, on the harms of gambling addiction and the legal consequences of participating in illegal gambling, with a view to further strengthening public awareness of anti-gambling.

     Thank you, President.

Ends/Wednesday, October 14, 2026
Issued at HKT 13:35

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