The Financial Action Task Force (FATF) has issued a report highlighting new red-flag risk indicators within the gaming and gambling industries. This report addresses issues related to money laundering, terrorist financing, and proliferation financing.
Released on Wednesday, the report titled "Risks of Gaming and Gambling" revisits the FATF's 2009 analysis of the casino sector, incorporating insights from questionnaires submitted by 80 jurisdictions and additional written comments from 29 others, alongside consultation with industry experts.
The report indicates that both land-based and online casinos, along with sports betting, exhibit the highest vulnerability to money laundering activities. In contrast, lotteries and scratchcards present a comparatively lower risk.
Moreover, it notes that online gaming is increasingly linked to documented cases of terrorist financing, although the risks associated with proliferation financing remain limited across both gaming sectors.
The FATF report also identifies cash, e-wallets, mobile money, and virtual assets as the payment methods most susceptible to misuse, particularly when operators manipulate them to keep deposits under reporting limits.
FATF President Giles Thomson remarked that unregulated sectors might become "attractive gateways for fraudsters, professional money launderers, and organised criminal networks," urging governments to enhance oversight, combat illegal and offshore operations, and strengthen public-private partnerships.
On Friday, the Danish Gambling Authority confirmed the report's significance for licensees in Denmark. They stated that the document is part of a broader review conducted by FATF member countries over the past year, which assessed risks related to money laundering and terrorist financing within the gaming sector.
Spillemyndigheden, the Danish regulator, actively participated in this review as a member of the FATF's gaming sector working group and confirmed that many indicators in the report are relevant to Danish licensees.
The FATF's alert regarding illegal and offshore gambling holds particular importance for Denmark. In the previous year, Spillemyndigheden successfully obtained a court order to block 178 unlicensed gambling websites, marking its most significant enforcement action to date.
This case underscored the tactics employed by illegal operators to conceal their activities, such as creating multiple site variations, a method also outlined in the FATF report as a risk indicator.
Denmark’s strategy aligns with a broader trend that FATF has monitored through its own grey and blacklisting system, which subjects jurisdictions with inadequate AML/CTF controls to heightened oversight and potential reputational penalties.
