FATF Flags Money Laundering, Terror Funding Risks in Gambling

The Financial Action Task Force ("FATF") identified emerging money laundering and terrorist financing risks across the gaming and gambling sector, driven by the expansion of online, cross-border, multi-product, and multi-payment platforms. The FATF said proliferation financing risks in the sector remain very limited.

In a report, the FATF found that money laundering through gambling is an established risk across many jurisdictions, with brick-and-mortar and online casinos, as well as sports betting, considered particularly exposed. The researchers noted that the variety of payment methods accepted by online operators - including cash, e-wallets, mobile money, and virtual assets - increasingly allows for rapid, anonymous, cross-border transactions. The report also stated that illegal and unlicensed offshore gambling continues to proliferate, often rivaling or exceeding the legal market in some countries.

The analysts observed that online gaming and gambling platforms are increasingly interlinked with social media and other digital platforms, which can elevate illicit finance risks. According to the report, social media can be used to coordinate illicit activity such as competition manipulation, advertise illegal gambling, recruit money mules, and fundraise for terrorist financing. While terrorist financing risks related to gambling remain limited, the online gaming space demonstrated more observable misuse influenced by social and technological factors.

The FATF recommended that jurisdictions strengthen their response by improving risk awareness, applying a risk-based approach, and enhancing licensing and registration requirements to prevent criminals from controlling gambling operators. The report also urged authorities to strengthen international cooperation and develop public-private partnerships to enable quick responses to evolving risks.