FATF issues new AML risk indicators for igaming transactions
The Financial Action Task Force has issued an alert to international gambling regulators.
Key takeaways
- The Financial Action Task Force (FATF) has warned regulators that the rapid growth of online and unlicensed gambling is creating new money laundering and terrorist financing risks, particularly through fast, anonymous cross-border payment methods.
- It has introduced new risk indicators, including the use of multiple accounts and payment methods, identity mismatches, suspicious betting patterns, questionable ownership structures, and links between gambling operators and organised crime or cyber-enabled fraud.
- Following its first in-depth global review of online and illegal gambling risks, involving more than 80 jurisdictions, it’s identified illegal gambling as one of the sector’s biggest threats and urged governments to strengthen oversight.
France.- The Financial Action Task Force (FATF, an international, intergovernmental body that sets standards to prevent money laundering and terrorist financing), has issued an alert and a set of new risk indicators for regulators amid concerns about the growth of unlicensed gambling. It said growth in the gaming sector’s market size globally had created new money laundering, terrorist financing and proliferation financing risks.
The FATF said its analysis has identified new opportunities for criminal abuse amid a rise in the use of online platforms, noting that payment methods now allow rapid, anonymous transactions across borders. It’s advised regulators to be alert to criminals using gambling platforms to move money via “smurfing”, the use of multiple small transactions to avoid detection, as well as unusually large or co-ordinated bets on events flagged for possible competition manipulation.
New FATF risk indicators for gaming sector
The FATF has set out a series of new risk indicators intended to help governments, regulators and private sector entities identify, assess and respond to suspicious activity. They highlight behavioural, transactional and operational warning signs associated with money laundering and terrorist financing.
These include the use of multiple accounts and payment methods under different identities, discrepancies between customer and payment information, suspicious identity documents and criminal links involving gambling operators or beneficial owners, including involvement in cyber-enabled fraud and organised crime, suspicious betting and transaction patterns and complex ownership structures that obscure beneficial ownership.
The indicators are the result of the body’s first detailed examination of risks associated with online and illegal gambling and drew on contributions from more than 80 jurisdictions and a range of industry bodies and researchers, examining financial crime risks across casinos, gambling activities and video gaming over the course of a year.
The project identified illegal gambling as one of the sector’s most significant risks, noting that in many jurisdictions, illegal markets rival or even exceed the size of legal gambling markets. It warned that technological innovation has created increasingly complex ecosystems for regulators and law enforcement.
“Gaming and gambling platforms depend on a wide range of related services, including social media platforms, digital marketplaces and software developers. These actors may fall outside existing regulatory frameworks, creating additional opportunities for criminal abuse,” it said.
The project identified links between gaming and gambling abuse and a range of other offences, including corruption, cyber-enabled fraud, professional money laundering networks and the use of illegal or unlicensed offshore operators to facilitate criminal activity.
The FATF also warned that the beneficial ownership shareholding of platforms can be structured to bypass thresholds for regulatory checks, especially when AML/CFT controls and anti-corruption frameworks are weak.
FATF President Giles Thomson said in a statement: “Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organised 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.”
