FATF Warns Regulators of Growing Money Laundering Exposure in Casinos and Sports Betting

The Financial Action Task Force has warned regulatory authorities that brick-and-mortar and online casinos together with sports betting face particular exposure to money laundering. FATF released its latest analysis after a year-long project drawing from over 80 jurisdictions. This constitutes the body’s first detailed examination focused on risks tied to online and illegal gambling.

Illegal markets rival or exceed legal markets in many places. Unlicensed operators present as legitimate while supplying anonymity and incentives that draw both consumers and criminal networks. The evolution of technology linked to gambling platforms combined with differing jurisdictional rules on anti-money laundering and counter-terrorism financing has increased associated risks.

Unlicensed platforms with multiple deposit options compound the difficulty of monitoring threats from the black market. Recent UK examples underscore the pattern. The Labour Party sought an investigation into the now-defunct unlicensed operator Tether.bet after claims that George Cottrell connected high-roller UK punters to offshore bookmakers. Fispay, owned by Mowbray Jackson, faced parallel complaints regarding bank account access for deposits and withdrawals. Both Cottrell and Jackson denied the allegations. The Gambling Commission raised the UK gambling software sector to medium risk for money laundering and terrorist financing.

FATF Risk Indicators

The report identifies methods such as moving funds without placing bets, smurfing via repeated small transactions below detection thresholds, and unusually large or coordinated bets on events vulnerable to match-fixing. Listed risk indicators encompass deposits from multiple third-party accounts, heavy use of cash or virtual assets, betting on every outcome, automated patterns, repeated VPN deployment, accounts opened under false names, and efforts to evade customer due diligence.

Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organised criminal networks. Governments should take note of the risk indicators and put in place appropriate risk-based responses – from strengthening oversight and cracking down on illegal and offshore operators, to boosting international co-operation, and deepening public-private collaboration.

The Enforcement Gap Ahead

As reported by SBC News, European regulators continue to update national frameworks yet face obstacles from fragmented laws and tax regimes that make full unification improbable. The FATF standards endorsed by the European Union emphasize deeper oversight of high-risk sectors including online gambling. The threat level from illegal operators is projected to rise with further technology advances.

Licensed operators encounter rising compliance costs while black market platforms operate with lower barriers. Regulators hold clear guidance on priority indicators but must still translate those into consistent enforcement across borders. The coming period will test whether coordinated action can narrow the advantage currently held by unlicensed entrants.

Reporting: SBC News

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