The point is generally to recover cents on the dollar from money you can't otherwise use. Imagine you have a network of people moving illegal drugs. They collect money from their customers, and they need to pay it to you, the supplier. Arrange for them to eat a lot of food at your restaurant. Maybe they shout their friends. The money goes into the restaurant, and is mingled with other money. That money is used to pay costs for the business, but some of it is still profit. That profit, while less than the illegal input money, is _clean_ money, which is much more valuable because you can spend it without fear generally.

It's really just about making it harder for law enforcement folks to draw associations by looking directly at the bank accounts of several people they suspect are in cahoots. Or, in some cases, about making it harder to trace specific cash serial numbers or other instruments like cheques.

I recall reading of a crime outfit in Australia that would have the elders in their family take their illicit cash and use it to place an endless stream of bets on poker machines. By law they're required to return some high percentage, say, 75%, of the money put into them (the house keeps the rest). If you gamble tens of thousands in those machines, and you don't care about the losses, you get a reasonable expectation value back out as laundered winnings. In that case you don't even have to own the pub with the pokies, that's just how they work.