Bans on the trade in wildlife are advocated as means to reduce poaching and the illegal sales of wildlife products. One of the rationales for such bans is to prevent laundering. Laundering occurs when illegal wildlife products are passed off as legal, and sold in legal outlets. Nonetheless, wildlife trade has also reduced poaching for other species via competition from legal traders against illegal. These opposing laundering and competition effects are reconciled in a general trade model. This shows that there is a trade-off between laundering and competition, leading to a legal market whose size optimises these two effects. Where illegal sales are occurring largely outside the legal market, trade bans have limited effect. Bans are most effective when the scale of laundering dominates all other trade.