The Financial Action Task Force (FATF) has released a report detailing red-flag risk indicators specifically for the gaming and gambling sectors, focusing on issues such as money laundering, terrorist financing, and proliferation financing. The report, titled "Risks of Gaming and Gambling," was published on Wednesday and updates FATF's analysis of the casino sector from 2009. It is based on feedback from 80 jurisdictions and written comments from an additional 29, alongside input from industry consultations.
The findings highlight that both land-based and online casinos, as well as sports betting, have a higher exposure to money laundering risks, while lotteries and scratchcards pose a lower risk profile. Interestingly, the report shows a greater amount of documented terrorist financing activity in online gaming compared to other forms of gambling, though it suggests that proliferation financing risks remain minor across both sectors.
Payment methods identified as particularly susceptible to misuse include cash, e-wallets, mobile money, and virtual assets. This vulnerability is notably pronounced when operators structure deposits deliberately to stay below reporting thresholds.
Giles Thomson, the president of FATF, emphasized the threat posed by unregulated sectors, which can become "attractive gateways for fraudsters, professional money launderers, and organized criminal networks." He urged governments to enhance oversight, take measures against illegal and offshore operators, and foster stronger collaboration between public and private sectors.
In response, the Danish Gambling Authority, Spillemyndigheden, stated on Friday that the FATF report is part of a broader review by FATF member nations carried out over the previous year. This review scrutinized the gaming sector regarding risks associated with money laundering, terrorist financing, and proliferation financing.
Spillemyndigheden confirmed its active participation in this work, being a member of FATF's gaming sector working group, and noted that many risk indicators present in the report are relevant for operators holding licenses in Denmark.
Denmark's recent actions against illegal gambling align with FATF's warnings. Last year, Spillemyndigheden achieved a court order to block 178 unregulated gambling sites, marking the largest enforcement operation in its history. This case revealed how illegal operators often mask their activities through various site variations, a tactic also cited as a potential red flag by FATF.
Denmark's proactive strategy against illegal gambling reflects a broader trend that FATF has monitored over the years, utilizing its own grey and black listing system. This system subjects jurisdictions with insufficient anti-money laundering and counter-terrorism financing controls to increased scrutiny or reputational consequences.
