The Financial Action Task Force (FATF) has issued a report highlighting risk indicators in the gaming and gambling sectors, particularly addressing issues related to money laundering, terrorist financing, and proliferation financing. Released on Wednesday, the report titled "Risks of Gaming and Gambling" updates FATF’s prior analysis from 2009 and incorporates insights derived from responses to questionnaires submitted by 80 jurisdictions, as well as written feedback from an additional 29 jurisdictions and consultations with industry stakeholders.
FATF identifies that both land-based and online casinos, as well as sports betting, present the highest risks for money laundering. In contrast, lotteries and scratchcards are deemed to pose a lower risk. The findings indicate that online gaming is associated with more recorded instances of terrorist financing compared to other forms of gambling; however, the risk of proliferation financing is considered to be limited across both gaming sectors.
The report also points out that payment methods such as cash, e-wallets, mobile money, and virtual assets are particularly vulnerable to exploitation, especially when operators use these methods to structure deposits to fall below mandatory reporting thresholds.
Giles Thomson, the president of FATF, remarked that unregulated sectors can potentially turn into "attractive gateways for fraudsters, professional money launderers, and organized criminal networks." He urged governments to enhance oversight, target illegal and offshore operators, and foster greater cooperation between the public and private sectors.
The Danish Gambling Authority, Spillemyndigheden, confirmed on Friday that this report is a result of a comprehensive evaluation conducted by FATF member countries over the past year, which focused on the gaming sector and its associated risks.
Spillemyndigheden actively contributed to this evaluation and was part of FATF’s gaming sector working group. The authority noted that many of the identified risk indicators are relevant to operators holding licenses in Denmark.
FATF’s warning about the risks of illegal and offshore gambling is particularly pertinent for Denmark. Recently, Spillemyndigheden secured a court order to block 178 unlicensed gambling websites, marking the largest enforcement action of its kind in the agency’s history. This case underscored the tactics employed by illegal operators, who frequently disguise their presence online through various site variations, a practice also highlighted as a concerning indicator in the FATF report.
Denmark’s proactive measures reflect a broader trend that FATF has been observing through its own grey and blacklisting system, which increases scrutiny or imposes reputational sanctions on jurisdictions with inadequate anti-money laundering and counter-terrorism financing controls.
