The watchdog says the fast-growing online gambling ecosystem crosses borders in ways that outpace controls built for brick and mortar casinos and regulated banks, leaving compliance blind spots. Online casinos and sportsbooks face heightened exposure to laundering because money can move into and out of accounts even when there is little actual wagering.
FATF also highlights that criminals split transactions into smaller increments to remain below levels that would prompt know-your-customer (KYC) or anti-money-laundering (AML) checks, a technique widely known as smurfing. At times, individuals who ultimately control gambling sites hide behind intricate layers of ownership, and investigators have found occasional connections to organized crime groups.
To help compliance teams, regulators and law enforcement, FATF listed risk flags to look for. Examples include multiple customers using the same payment method that points to coordinated networks, discrepancies between a user's declared location and the IP address observed, as well as sizable totals of deposits and withdrawals occurring alongside very little wagering.
FATF said regulators and operators should better link indicators spanning user profiles, hardware used, funding channels, and gameplay behaviors to detect misuse earlier.
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FATF noted that online gaming platforms have more documented instances of terrorist-financing misuse. A research briefing last year from UK think tank RUSI reported that gaming and adjacent services - such as livestreaming platforms - serve as avenues for collecting money to support extremist activities. Techniques included buying in-game items or currencies, selling bespoke games that promote extremist views, and soliciting donations during livestreamed gameplay.
"Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organized criminal networks," said FATF president Giles Thomson, who also called for more cooperation to clamp down on illegal and offshore operators.
With online set to make up a majority of gambling revenue by 2029, the stakes around integrity and oversight are rising. Platforms, payment tools and even content channels that touch gaming are navigating a risk landscape that regulators are watching closely, especially where unlicensed or offshore activity is involved. For consumers and investors alike, the headline is simple: growth is real, but so are the financial crime pressures that come with it.
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