The Isle of Man Financial Intelligence Unit (FIU) has issued a comprehensive report identifying key typologies and red flags in the misuse of online gambling platforms for money laundering (ML), terrorist financing (TF), and proliferation financing (PF).
Upholding International Standards
This initiative aligns with FATF Recommendation 29, reinforcing the FIU’s commitment to global anti-financial crime standards. The report is aimed at helping licensed operators, financial institutions, and service providers enhance their risk detection and mitigation practices.
Online Gambling’s Economic Weight
Online gambling plays a significant role in the Isle of Man’s economy, accounting for nearly 14% of national income. Under the Online Gambling Regulation Act 2001 (OGRA), licensees—ranging from full operators to sub-license holders and software providers—must comply with varying degrees of AML/CFT obligations based on their business model.
Key Typologies and Criminal Techniques
The FIU highlights how bad actors exploit the anonymity, speed, and cross-border nature of online gambling platforms. Common tactics include:
- “Cash in, cash out” schemes to launder illicit funds
- Parallel betting through collusion
- Chip dumping in P2P games to move money covertly
- Fake identities and alternative withdrawal methods
A particularly concerning trend is the use of cryptocurrency, often tied to darknet activity or sanctioned jurisdictions, such as North Korea.
Organised Crime and Corporate Abuse
The report also details how criminal organisations infiltrate or run gambling businesses to legitimise illicit profits. Techniques include:
- Complex corporate structures
- Shell companies
- Manipulated B2B transactions to disguise financial flows
Practical Guidance for Operators
The FIU report provides case studies, red flag indicators, and risk factors to support due diligence efforts across the industry. It emphasises the importance of continuous monitoring, especially when engaging with clients or partners from high-risk jurisdictions.
