The Financial Action Task Force (FATF) has warned that the rapid growth of online gambling, digital payments and cross-border platforms is creating new money laundering and terrorist financing risks. These risks particularly affect the global gaming industry.
In its latest Risks of Gaming and Gambling report, the international watchdog examined how gambling has become part of a wider value-transfer ecosystem. This ecosystem involves operators, payment providers, technology companies and other third parties.
The research drew on information from 80 jurisdictions across the FATF Global Network. It also included input from industry organisations, researchers and private-sector stakeholders.
Casinos and Sports Betting Remain High-Risk
FATF identified land-based casinos, online casinos and sports betting as particularly vulnerable to money laundering.
The increasing use of e-wallets, mobile money and virtual assets, alongside traditional cash payments, can make transactions faster and cross-border. Furthermore, it makes these transactions more difficult to trace.
While online video and mobile gaming currently appear to present lower levels of money laundering activity, FATF warned that the broader digital ecosystem is creating additional channels for financial crime.
Offshore Gambling Creates Additional Risks
Illegal and unlicensed offshore gambling was highlighted as a significant concern. FATF noted that the black market can rival or exceed the regulated sector in some jurisdictions.
The report also identified continued risks linked to junkets, particularly around player anonymity and unclear beneficial ownership.
Social media and other digital platforms can further facilitate illegal gambling by supporting marketing, money-mule recruitment, illegal activity and competition manipulation.
FATF Highlights Operator Red Flags
FATF identified several indicators that operators and regulators should monitor. These include complex ownership structures, nominees, trusts and white-label arrangements that make beneficial ownership difficult to establish.
Customer-level warning signs include multiple accounts, repeated VPN use, mismatched payment information, unexplained wealth and transactions involving higher-risk jurisdictions.
Payment patterns that may require enhanced scrutiny include deposits followed by little or no play before withdrawal, third-party payments, rapid transfers between beneficiaries and virtual-asset transactions.
For gambling operators, the report reinforces the need for stronger AML/CFT controls, customer due diligence and third-party oversight. This need is increasing as digital payment methods and cross-border gaming networks continue to expand.
