House panel warns illegal gambling fuels scam networks across Southeast Asia targeting Americans

Illegal online gambling operations across Southeast Asia have grown into a major driver behind global scam networks now stealing billions from Americans each year, according to the chairman of the House Select Committee on China.

At a Capitol Hill hearing Tuesday (May 19), committee chairman John Moolenaar said Chinese-linked criminal organizations originally built much of the region’s underground economy around online gambling businesses before expanding into fraud, money laundering, cybercrime, and human trafficking.

“Our nation confronts one of the fastest-growing and largest financial threats facing Americans: the industrial-scale scam and fraud ecosystem fueled by China and enabled by corruption, weak governance, and illicit finance in Southeast Asia,” Moolenaar said.

Lawmakers used the hearing, titled “Crime, Corruption, and Power: The Rise of CCP-linked Scam Networks Targeting Americans and Threatening U.S. Security,” to examine how gambling compounds in Cambodia and Myanmar transformed into international fraud centers targeting victims worldwide.

Investigators told the committee that Chinese crackdowns on domestic gambling and online fraud pushed many criminal groups into Southeast Asia, where corruption and weak oversight allowed operations to expand quickly. Networks that once focused largely on sports betting and casino-style gambling now run elaborate cryptocurrency scams, romance frauds, and fake investment schemes aimed heavily at Americans.

Southeast Asia illegal gambling scam networks using payment systems to target Americans

The committee also released a report describing the scam compounds as part of a broader criminal infrastructure supported by underground payment systems, illicit finance channels, and cryptocurrency laundering operations. Moolenaar said Americans lost at least $10 billion to online scams during 2024 alone.

Lawmakers pointed to recent international enforcement actions as evidence of how deeply connected gambling and fraud operations have become. British and American authorities recently dismantled a $15 billion illegal gambling and crypto scam network that investigators said moved money through digital assets and offshore payment systems tied to organized criminal groups.

Separate investigations and media reports have also examined companies such as the Lixin Group, which has faced allegations tied to illegal online gambling operations connected to Southeast Asian betting platforms. Analysts say gambling businesses operating in the region helped create financial channels later exploited by scam syndicates.

The committee’s investigation highlighted what lawmakers called evidence linking a Chinese state-owned company to construction work at scam compounds through contracts with criminal organizations. While lawmakers stopped short of accusing Beijing of directly running the operations, Moolenaar argued Chinese authorities have not done enough to dismantle them.

Human trafficking concerns remain central to the investigation. According to lawmakers, many workers are lured through fake job offers before having passports confiscated and being forced into online fraud schemes under threats or abuse.

Moolenaar urged Congress to pass the Dismantle Foreign Scam Syndicates Act, saying lawmakers must treat the growing scam economy as both a criminal enterprise and a broader national security threat.

Featured image: Select Committee on China via X

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