The Financial Action Task Force (FATF) has warned of emerging money laundering, terrorist financing and proliferation financing risks linked to the rapid expansion of online gaming and gambling platforms worldwide.
The Paris-based global financial crime watchdog issued the warning on Wednesday after conducting surveys across 80 jurisdictions. It said the growing digitalisation, cross-border nature and interconnectedness of gaming and gambling services were creating new avenues for illicit finance.
The FATF’s latest report examines risks associated with casinos, gambling establishments and online gaming platforms, including payment channels, illegal operators and their connections to the wider financial system.
According to the report, the gaming and gambling industries have undergone significant changes in recent years, driven by the expansion of online services, cross-border operations, multiple products and diverse payment methods.
The watchdog said gaming and gambling platforms had become part of a broader value-transfer ecosystem involving numerous actors, some of whom operate outside national anti-money laundering and counter-terrorist financing (AML/CFT) frameworks.
The FATF warned that differences in regulatory approaches and the varying understanding of gambling-related risks across jurisdictions could increase vulnerabilities to money laundering, terrorist financing and, to a lesser extent, proliferation financing.
It identified illegal gambling as one of the sector’s most significant risks, noting that illegal markets in some jurisdictions can rival or exceed the size of legal gambling markets.
The report said unlicensed and offshore gambling operators could present themselves as legitimate businesses while offering anonymity and incentives that attract both consumers and criminal actors.
The FATF also highlighted the growing use of digital payment systems, e-wallets, mobile money and virtual assets, which can provide rapid and, in some cases, anonymous cross-border transfers.
Criminals may exploit gambling platforms to transfer funds without actually participating in gambling, the watchdog said. Other methods include conducting multiple small transactions to avoid detection and placing unusually large or coordinated bets on events that may be subject to competition manipulation.
Technological developments have also created increasingly complex networks involving social media platforms, digital marketplaces, software developers and other service providers. The FATF warned that some of these entities may fall outside existing regulatory frameworks, creating further opportunities for abuse.
The watchdog said criminals and illegal operators could exploit regulatory differences between countries, while fragmented oversight could hamper information sharing between public authorities and private-sector entities and complicate international cooperation.
The FATF further warned that complex beneficial ownership and shareholding structures could be used to circumvent regulatory thresholds, particularly in jurisdictions where AML/CFT and anti-corruption safeguards are weak.
FATF President Giles Thomson urged governments to adopt risk-based measures based on the indicators identified in the report. These measures include strengthening regulatory oversight, targeting illegal and offshore operators, improving international cooperation and enhancing public-private partnerships.
The report also highlighted the continued risk of criminal infiltration of gaming and gambling businesses and identified links between sectoral abuse and offences including corruption, cyber-enabled fraud and professional money laundering networks.
The FATF has outlined a range of behavioural, transactional and operational indicators that regulators and businesses can use to identify suspicious activity.
These include the use of multiple accounts or payment methods under different identities, inconsistencies between customer and payment information, suspicious identity documents, links to organised crime or cyber-enabled fraud, unusual betting and transaction patterns, and complicated ownership arrangements designed to conceal beneficial owners.
Other warning signs include attempts to influence or bribe venue employees, frequent dealings with a limited number of staff members, suspicious cash-up requests and claims involving lottery tickets, betting slips, vouchers or prize coupons.
The FATF also urged vigilance over attempts to conceal a customer’s identity or location, including repeated use of virtual private networks (VPNs), multiple devices, multiple accounts and discrepancies between a customer’s stated residence and detected location.
The report noted that inconsistencies between a customer’s stated location and their internet protocol (IP) address could also indicate suspicious activity.
