Platforms that offer online gambling are facing more and more scrutiny from the Financial Action Task Force (FATF), which says they are becoming more appealing to criminals searching for ways to move or raise money.
The Rise of Online Gambling Brings in More Weaknesses
The Paris-based global financial crime watchdog has warned about the fast-paced growth of online gaming and gambling, which is triggering fresh sets of vulnerabilities.
The organization put special emphasis on the way customers can use multiple payment methods and access operators based outside regulated markets.
E-wallets, mobile money services and virtual assets can make it harder for regulators and compliance teams to accurately follow the movement of funds across borders, FATF said.
The warning comes amid online gambling’s ongoing expansion at a global level, with researchers from H2 Gambling Capital expecting online gambling to account for more than half of global gross gaming revenue for the first time in 2029.
Potential Signs of Risk
FATF said the international nature of the online gambling industry can also leave gaps in systems which were initially built around traditional casinos and regulated financial institutions.
The organization has published a series of risk indicators intended to help gambling companies, regulators and law enforcement identify suspicious activity.
Among them are payment methods shared by multiple customers, which could point to groups operating together, as well as differences between a customer’s declared location and their IP address.
Large deposits and withdrawals combined with little actual betting activity are another warning sign.
The watchdog also highlighted the practice known as “smurfing,” in which transactions are broken into smaller amounts to avoid triggering anti-money laundering or know-your-customer controls.
While traditional gambling venues have long been subject to the efforts of organized crime groups to gain ownership and influence over their operations, similar risks can today be transferred to online environments, no matter how complex their ownership structure.
FATF’s project also clearly identified the connections between gaming and gambling abuse as well as a range of additional offenses like corruption and cyber-enabled fraud.
Giles Thomson, president of FATF: “Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organized criminal networks.
I urge all governments to take note of the risk indicators we have set out today, and put in place appropriate risk-based responses, from strengthening oversight and cracking down on illegal and offshore operators, to boosting international co-operation, and deepening public-private collaboration.”
FATF is also concerned about terrorist financing, with specialized assessments pointing to risks involving gaming platforms and related services such as livestreaming sites.
Research cited by the watchdog has identified methods including purchases of virtual goods or currencies, sales of games promoting extremist views and donations requested during livestreamed gaming.
The report calls for operators and regulators to look beyond individual transactions and connect information from different sources, including accounts, devices, payment methods and betting behavior.