The global gambling industry is facing a growing range of financial crime threats, with criminals increasingly using betting platforms to move money, hide ownership and exploit gaps between national regulations.
That is the warning from the Financial Action Task Force (FATF), which has published a new study examining money laundering, terrorist financing and other financial crime risks across casinos, gambling and video gaming.
The report, released on September 9, draws on contributions from more than 80 jurisdictions, industry organisations and researchers and includes a new set of risk indicators designed to help authorities and gambling businesses identify suspicious activity.
Criminals do not always need to gamble
One of the key findings is that criminals can use gambling platforms as financial channels without actually taking part in meaningful gambling activity.
The FATF highlights techniques including “smurfing”, where large amounts are broken into numerous smaller transactions to make them less visible, as well as the use of multiple accounts and payment methods under different identities.
Other warning signs include discrepancies between customer and payment information, suspicious identity documents and unusual betting or transaction patterns.
The organisation also points to unusually large or coordinated bets on sporting events that may be linked to competition manipulation.
Illegal gambling emerges as a major threat
Illegal and unlicensed gambling is identified by the FATF as one of the sector’s most significant risks.
The report warns that in some jurisdictions, illegal gambling markets can rival or even exceed their regulated counterparts. Offshore operators may also present themselves as legitimate businesses while offering anonymity and incentives that can attract both consumers and criminal actors.
The online nature of modern gambling makes the problem harder to contain. Platforms can operate across borders and use payment systems that allow funds to move quickly between jurisdictions.
Cash, e-wallets, mobile money and virtual assets can all create potential vulnerabilities when appropriate controls are not in place.
Complex ownership creates another weakness
The FATF also warns that criminals can exploit the increasingly complicated structures behind gambling businesses.
Beneficial ownership can be divided between different shareholders or entities in ways designed to stay below regulatory thresholds, particularly where AML and anti-corruption controls are weak.
The risk is not limited to online operators. Traditional casinos have long been vulnerable to attempts by organised crime groups to obtain ownership or influence, while online businesses can create additional layers of complexity through international structures and third-party services.
The report links gambling-related financial crime to corruption, cyber-enabled fraud, professional money laundering networks and organised crime.
Regulators face a wider digital ecosystem
Another challenge identified by the FATF is that gambling no longer operates in isolation.
Operators increasingly depend on payment providers, social media platforms, digital marketplaces, software companies and other technology services. Some of these businesses may sit outside gambling-specific regulatory frameworks, creating additional opportunities for abuse.
Differences between national rules can make the problem even more difficult to address, particularly when information needs to be shared across borders.
FATF President Giles Thomson said the gaming and gambling sectors could become gateways for fraudsters, professional money launderers and organised criminal networks without effective safeguards.
He called on governments to strengthen oversight, target illegal and offshore operators, improve international cooperation and deepen collaboration between public authorities and the private sector.
New indicators aim to help detect suspicious activity
The FATF’s new risk indicators are intended to provide practical tools for regulators, law enforcement agencies and gambling companies.
Among the indicators are multiple accounts linked to different identities, unusual payment behaviour, complex ownership structures, suspicious betting patterns and criminal connections involving operators or beneficial owners.
The FATF said additional operational material and case studies will be available to public authorities through its secure platform.
The report represents the organisation’s first detailed examination of risks connected specifically to online and illegal gambling, highlighting how the rapid growth of digital gambling is changing the financial crime landscape.
For operators, the message is increasingly clear: AML controls can no longer focus only on what happens when a customer places a bet. The way money enters, moves through and leaves a gambling platform may be just as important.