FATF warns of rising money laundering risks in online gambling

The Financial Action Task Force (FATF), a global watchdog on money laundering, terror financing, and proliferation financing, has issued a warning about emerging risks to economies due to the growth of online gaming and gambling operations. The organization, based in Paris, shared new risk indicators with countries to combat money laundering, terrorist financing, and the financing of weapons of mass destruction after conducting surveys across 80 jurisdictions.

The FATF stated that as gaming and gambling services become more digital, cross-border, and interconnected, new risks are emerging in money laundering, terrorist financing, and proliferation financing. The findings and risk indicators examine various aspects of the sector, including casinos, gambling, online platforms, payment channels, illegal operators, and their connections to the broader financial system.

The FATF emphasized that the gaming and gambling industries have undergone significant changes in recent years and continue to evolve with the expansion of online, cross-border, multi-product, and multi-payment platforms. These platforms are now part of a larger interconnected value transfer ecosystem with numerous actors, some of which may not fall under national anti-money laundering/counter-terrorist financing (AML/CFT) regulatory frameworks.

The FATF highlighted that differences in regulatory approaches across jurisdictions can create loopholes for criminal abuse and pose challenges to international cooperation. The organization urged governments to take note of the risk indicators and implement appropriate risk-based responses, such as strengthening oversight, cracking down on illegal and offshore operators, and enhancing international collaboration and public-private collaboration.

The new risk indicators provide practical guidance for regulators to identify, assess, and respond to suspicious activity in the gaming and gambling sectors. These indicators highlight warning signs, including the use of multiple accounts and payment methods under different identities, discrepancies between customer and payment information, suspicious betting patterns, and complex ownership structures that obscure beneficial ownership.