The Financial Action Task Force (FATF) has released a report outlining risk indicators related to money laundering, terrorist financing, and proliferation financing in the gaming and gambling sectors. The report, titled "Risks of Gaming and Gambling," was published on Wednesday and updates the FATF's 2009 analysis focused on casinos. It incorporates feedback from 80 jurisdictions through questionnaires and additional comments from 29 more, alongside insights from industry consultations.
The findings of the report indicate that both land-based and online casinos, along with sports betting operations, present the highest exposure to money laundering risks. Conversely, lotteries and scratchcards are deemed to carry a lower risk profile.
In terms of terrorist financing, the report highlights that online gaming has a more significant documented occurrence of such activities compared to traditional gambling, although both sectors exhibit limited exposure to proliferation financing risks.
Various payment methods have been identified as vulnerable to exploitation, particularly cash, e-wallets, mobile money, and virtual assets. This vulnerability is exacerbated when operators use these methods to facilitate deposits that fall below reporting thresholds.
FATF President Giles Thomson emphasized the dangers posed by unregulated sectors, which can become enticing gateways for fraudsters and organized crime. He urged governments to enhance oversight, combat illegal and offshore operations, and strengthen collaborations between the public and private sectors.
The Danish Gambling Authority, known as Spillemyndigheden, acknowledged the relevance of the report for its licensed operators. On Friday, they noted that the FATF report originates from a comprehensive review conducted by FATF member countries over the last year that scrutinized the risks associated with money laundering and financing in the gaming industry. Spillemyndigheden confirmed its active participation in this review and membership in FATF's gaming sector working group.
The report's warnings about illegal and offshore gambling hold particular significance for Denmark. In a noteworthy move last year, Spillemyndigheden obtained a court order to block 178 unlicensed gambling websites, marking the largest action of its kind in the regulator's history. This case underscored the tactics employed by illegal operators, such as using various site variations to conceal their operations—a strategy highlighted in the FATF's report as a risky indicator.
Denmark's proactive stance on illegal gambling aligns with a broader trend observed by FATF through its monitoring and sanctioning of jurisdictions exhibiting inadequate anti-money laundering and counter-terrorism financing controls.
