The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has warned that criminals are increasingly exploiting the gaming and gambling sectors for money laundering, smurfing and other forms of financial crime.
In a new report, the Paris-based organization outlined emerging risk indicators designed to help countries, regulators, law enforcement agencies and private-sector entities identify and disrupt criminal activity across the gaming and gambling industries.
FATF said criminals were exploiting gambling platforms in several ways, including moving money through accounts without actually gambling, making multiple small transactions to avoid detection and placing unusually large or coordinated bets on events suspected of being subject to competition manipulation.
The organization said technological innovation had created increasingly complex ecosystems for regulators and law enforcement, while illegal gambling markets in some jurisdictions rivaled or exceeded the size of legal markets. According to FATF, the growth of online gambling, expanding market sizes and the increasing use of payment methods capable of facilitating rapid and anonymous cross-border transactions had created new opportunities for financial crime.
The report was based on a recently completed year-long project that examined money laundering, terrorist financing and proliferation financing risks across casinos, gambling activities and video gaming. The project drew contributions from more than 80 jurisdictions, as well as industry bodies and researchers, and marked FATF’s first detailed assessment of the risks associated with online and illegal gambling.
FATF identified illegal gambling as one of the sector’s most significant risks, noting that illegal and unlicensed offshore operators were widespread regardless of the legal status of gambling or the strength of regulatory frameworks in individual jurisdictions. It said some illegal operators presented themselves as legitimate businesses while offering anonymity and financial incentives to attract consumers and criminal actors.
The watchdog also highlighted the growing role of technology in the sector, noting that online, cross-border and multi-payment platforms had created increasingly interconnected ecosystems that could provide criminals with access to the formal financial system. Payment methods used across gaming and gambling, including cash, e-wallets, mobile money and virtual assets, were identified as vulnerable to different forms of money laundering.
FATF further warned that gaming and gambling platforms rely on a broader network of services, including social media platforms, digital marketplaces and software developers. Some of these businesses may operate outside existing regulatory frameworks, creating additional opportunities for criminal exploitation.
“Criminals and illegal operators can exploit differences in regulatory approaches across jurisdictions,” FATF said, adding that such differences could also hinder information sharing between public and private-sector stakeholders and create challenges for international cooperation.
The organization also raised concerns about beneficial ownership structures, warning that shareholdings could be arranged to circumvent thresholds for regulatory scrutiny, particularly where anti-money laundering and counter-terrorist financing (AML/CFT) controls and anti-corruption frameworks were weak. The report further highlighted the continued threat of criminal infiltration of gaming and gambling operators.
FATF noted that traditional casinos have long been vulnerable to attempts by organized crime groups to obtain ownership or influence over their operations, adding that these risks could become more complex in online environments where ownership structures are often more complicated.
