FATF Flags New AML Risks in Online and Illegal Gambling

FATF has published new red flags for money laundering in casinos, betting and online gaming after a year-long review involving more than 80 jurisdictions. The report is the watchdog’s first detailed look at the risks linked specifically to online and illegal gambling.

The project drew questionnaire responses from 80 jurisdictions, with another 29 submitting written comments. FATF also consulted industry groups, researchers and other private-sector participants. Its report focuses heavily on online activity and the way gambling accounts are funded.

Cash remains part of the risk picture, but FATF also points to e-wallets, mobile money and virtual assets. These can make it easier to move funds between countries or switch between payment types. Online casinos and sports betting are among the areas FATF identifies as particularly exposed.

FATF Lists Payment and Account Red Flags

A large part of the report is devoted to behaviour that may deserve a closer look from operators. The warning signs include:

Customer details that do not match the name or information on the payment method;
Deposits followed by withdrawals with little or no real gambling;
Several small deposits kept below reporting thresholds before money is withdrawn in larger amounts;
Repeated VPN use, changing IP locations or several accounts linked to the same device or address;
Third-party deposits, mule accounts, fast transfers and payments involving higher-risk jurisdictions;
Coordinated or hedged betting that appears to be used mainly to move money.

The list goes further than deposits and withdrawals. FATF also mentions foreign e-wallets, virtual-asset wallets connected with unlicensed gambling, failed payment attempts and cases where several customers use the same bank account or payment method.

None of those signals automatically means that money laundering is taking place. FATF says one indicator may have an innocent explanation, and some patterns can also be linked to problem gambling.

Several signs appearing around the same account or transaction are more important. A payment mismatch, for example, may mean little on its own. The picture changes if the same account also uses several devices, changes location often and withdraws funds after very limited betting.

Offshore Gambling Gets Particular Attention

Illegal gambling takes up a sizable part of the report. FATF says unlicensed markets in some countries already rival or exceed the regulated sector.

Cross-border operators are one reason for concern. Different licensing and AML rules can leave gaps between jurisdictions, while the companies, payment providers and customers involved may all be based in different countries.

FATF wants jurisdictions to strengthen licensing and registration controls, improve cooperation across borders and share more information with the private sector.

Ownership and Payment Links Add More Risk

FATF also highlights ownership structures. Red flags include companies set up across several jurisdictions, shareholdings kept below regulatory-check thresholds and third-party or white-label arrangements where it is difficult to see who ultimately controls the business.

The issue is not limited to illegal operators themselves. A licensed gambling company may still receive payments or customers connected with higher-risk markets, payment providers or offshore businesses. The report does not create new binding rules for gambling operators.

For compliance teams, the more immediate task is checking whether existing AML systems can connect payment data with account behaviour, location and betting patterns instead of reviewing each signal separately.