The Financial Action Task Force published a report on financial crime risks in gambling on 9 September. Illegal offshore operators are identified as a principal threat, regardless of whether gambling is legal in a jurisdiction.
The report drew on a survey of 80 jurisdictions, written submissions from 29 countries and consultations with the industry. It is FATF's first detailed study on online gambling and unlicensed operators since its 2009 work on casinos.
Unlicensed offshore platforms attract customers with promotions and confidentiality. Many disguise themselves as legitimate businesses by exploiting differences in national licensing regimes and AML requirements. FATF links criminal use of gambling to corruption, cyber fraud, professional money-laundering networks and organised crime.
Casinos, both land-based and online, and sports betting carry the highest risk. Lotteries and scratch cards are assessed as less vulnerable. The growth of cross-border multi-product platforms has increased the number of channels for moving funds. Cash, e-wallets, mobile money and cryptocurrency allow rapid cross-border transfers and conversion between different forms of value.
The organisation warned that gambling platforms are integrating with social networks, marketplaces and software providers, some of which fall outside national AML regulation. Social networks are used to advertise illegal gambling, recruit money mules and coordinate match-fixing.
Indicators of suspicious activity include deposits followed by withdrawal without wagering, multiple transactions below reporting thresholds, payments from accounts not matching the registered player, VPN use, and bets on all outcomes to minimise losses during laundering.
FATF recommends tighter licensing requirements, stronger international cooperation and data-sharing between regulators, law enforcement and the private sector. FATF President Giles Thomson said that without reliable safeguards, these sectors remain attractive gateways for fraudsters and criminal networks.
