Walk down Castle Street in Dunedin and you will see one of New Zealand’s most famous student strips. Known for flat parties and a lively social scene, it has now become the unlikely centre of a very different story. Not about drinking or student politics, but about gambling.
Recent investigations revealed that students are not only gambling heavily online but also being paid by offshore casinos to promote gambling sites on social media. At first glance it looks like a youth culture issue. But dig a little deeper and it exposes a significant anti money laundering (AML) blind spot. Offshore casinos, unregulated advertising and casual student participation combine to create exactly the kind of environment where illicit financial flows thrive.
Gambling as entertainment or laundering pathway
For most of the students interviewed, gambling looked like entertainment. Small stakes pooled with friends, trying out “features” or bonus rounds on online slot games and celebrating the occasional big win. A group of students even captured a $3000 win on video. Losses were shrugged off as part of the fun.
But regulators and AML professionals see a different picture. Unlicensed offshore casinos are widely recognised as high risk for money laundering because criminals can deposit illicit funds, make minimal-risk bets or use tactics like chip dumping, then withdraw balances as “winnings” where identity checks and monitoring are weak. To be clear, the Dunedin case does not suggest the students laundered money. The AML concern is that the very same platforms used by students can be exploited by criminals for layering and disguising illicit funds.
Students as a shadow distribution network
One of the most striking findings was the way offshore casinos recruited students as promoters. For as little as US$20 to US$50 a post, students could make skit-style videos on Instagram that linked to gambling sites. Some earned thousands of dollars a week.
In Dunedin, one group calculated that a single casino was paying students on Castle Street about NZ$14,000 a week. What looks like easy money is in fact the creation of a shadow distribution network. Students are not knowingly laundering money, but the pattern resembles what regulators see elsewhere with “money mule” networks. Small transactions are spread across many individuals, making them harder to detect and giving offshore operators cover.
The failure of KYC and age checks
Several students admitted they started gambling years earlier, some as young as 14. Identity verification was either non-existent or minimal. One student said he had placed over 16,000 bets with the same online casino without once being asked for proper identification.
From an AML perspective, this is a glaring breach. Know your customer (KYC) rules are designed to prevent exactly this kind of risk: underage users, unverified accounts and an easy entry point for illicit funds.
The regulatory challenge
The Department of Internal Affairs (DIA) eventually intervened. It issued warning notices to student promoters and took an “education first” approach. Social media accounts disappeared and many students stopped posting. But this highlights the limits of local enforcement.
Offshore casinos operate beyond the direct reach of New Zealand regulators. Social media advertising flows across borders at speed. While DIA can warn students or issue fines, it cannot easily stop the flow of money to unlicensed operators or the cross-border promotion of gambling services. This is not a uniquely New Zealand problem. Every jurisdiction grapples with the same challenge: how to enforce AML rules when the operators are offshore and the promoters are small-scale individuals.
Normalisation of risky behaviour
Of equal concern is how normalised gambling has become in student life. From online sports bets to casino features, it is woven into daily routines. Students talk about eating cheap meals while gambling away hundreds of dollars in the same day. Many hide it from parents. Others see it as part of socialising with friends.
The risk is that this normalisation blurs the line between harmless entertainment and high risk financial behaviour. If students grow up seeing gambling as routine, they are less likely to recognise the red flags that AML frameworks rely on. For compliance teams that means risk signals may be masked within ordinary spending patterns.
Conclusion
What started as a story about student life in Dunedin reveals something larger. Offshore casinos are not only exploiting youth culture but also testing the edges of AML systems worldwide. Students see gambling as fun, an earner, or a joke on social media. But from an AML perspective, it is a case study in how easily illicit funds can move through unregulated platforms and how quickly normalisation of risky behaviour can take hold.
About First AML
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