The Financial Action Task Force (FATF) has issued a global alert to countries highlighting new money laundering risks in the gaming and gambling sectors, with FATF President Giles Thomson urging governments to take note of the risk indicators and put in place appropriate risk-based responses. According to the latest FATF report, as gaming and gambling services become increasingly digital, cross-border and interconnected, new money laundering, terrorist financing and proliferation financing risks are emerging. The alert warns of criminals using gambling platforms to move money without actually gambling, making multiple small transactions (smurfing) to avoid detection and placing unusually large or coordinated bets on events flagged for possible competition manipulation. The analysis, based on findings from a recently completed project examining financial crime risks across casinos, gambling activities and video gaming over the course of a year, marks the FATF's first detailed examination of risks associated with online and illegal gambling. The project identified new opportunities for criminal abuse following an increase in market size globally, a rise in the use of online platforms, and as payment methods allow rapid, anonymous transactions across borders. The findings and risk indicators examine risks across casinos, gambling and online gaming, including online platforms, payment channels, illegal operators and their links to the broader financial system.
The project identified illegal gambling as one of the sector's most significant risks, with illegal markets in many jurisdictions rivaling or even exceeding the size of legal gambling markets. As reported by ANI, illegal gambling operators are prevalent across jurisdictions regardless of legal status or regulatory frameworks. A related FATF report estimated that illegal online gambling proceeds laundered through underground networks could exceed half a billion euros, highlighting the massive scale of these operations. Illegal and unlicensed offshore operators often present themselves as legitimate businesses while offering anonymity and incentives that can attract both consumers and criminal actors. The scale of illegal operations has grown significantly as technological innovation has expanded activity across online, cross-border and multi-payment platforms, creating increasingly complex ecosystems for regulators and law enforcement.
According to the FATF analysis reported by ANI, technological innovation has expanded activity across online, cross-border and multi-payment platforms, creating increasingly complex ecosystems for regulators and law enforcement. With gaming and gambling activities increasingly interconnected with the wider digital economy, they provide multiple points of access to the formal financial system. Payment systems used in gaming and gambling, including cash, e-wallets, mobile money and virtual assets, are vulnerable to a range of money laundering risks. The latest report specifically flags e-wallets, mobile money platforms, and virtual assets as channels that criminals are actively exploiting, as reported by multiple sources. These platforms depend on related services such as social media platforms, digital marketplaces and software developers that may fall outside existing regulatory frameworks, creating additional opportunities for criminal abuse. The FATF warns that beneficial ownership and shareholding structures of platforms can be designed to bypass thresholds for regulatory checks, especially when AML/CFT controls and anti-corruption frameworks are weak.
The FATF project identified links between gaming and gambling abuse and a range of other offences, including corruption, cyber-enabled fraud, professional money laundering networks and the use of illegal or unlicensed offshore operators. As reported by ANI, the analysis warns that criminals and illegal operators can exploit differences in regulatory approaches across jurisdictions, creating barriers to information sharing between private and public sectors and challenges in international co-operation. The report highlights cases where funds move through gambling platforms with no actual gambling taking place, demonstrating the brazen nature of some criminal operations. The project also highlighted the continued threat of criminal infiltration and exploitation of gaming and gambling operators, with traditional casinos exposed to efforts by organized crime groups to gain ownership or influence over operations. These risks are compounded in online environments with complex ownership structures.
Based on contributions from more than 80 jurisdictions and a range of industry bodies and researchers, the FATF has published new risk indicators to help governments, regulators and private sector entities identify money laundering risks. According to ANI, the indicators highlight behavioural, transactional and operational warning signs including the use of multiple accounts and payment methods under different identities, discrepancies between customer and payment information, suspicious identity documents and criminal links involving gambling operators or beneficial owners. The new risk indicators also cover suspicious betting and transaction patterns and complex ownership structures that obscure beneficial ownership. The FATF's new risk indicators and accompanying key findings aim to support public and private sector stakeholders by providing practical guidance to identify, assess and respond to suspicious activity across the rapidly evolving gaming and gambling sectors. The FATF has introduced a new set of Anti-Money Laundering and Counter-Financing of Terrorism risk indicators designed to help regulators and operators spot suspicious behavior, with some red flags being almost comically brazen as reported by multiple sources. The latest report emphasizes that gaming and gambling establishments and platforms are now part of a broader interconnected value transfer ecosystem with numerous actors, some of which fall outside national anti-money laundering/counter-terrorist financing (AML/CFT) regulatory frameworks.
