Illegal offshore gambling emerges as major financial crime risk: FATF
Illegal and unlicensed offshore gambling has emerged as one of the industry’s most significant financial crime risks, with illicit markets in some countries matching or exceeding regulated markets, the Financial Action Task Force (FATF) warned.
The warning came in a report released on September 9th examining financial crime risks across land-based and online casinos, sports betting, other forms of gambling and online video and mobile gaming.
The findings were based on questionnaire responses from 80 jurisdictions, written submissions from 29 jurisdictions and consultations with industry groups, researchers and private-sector stakeholders.
The project updates FATF’s earlier work on casino vulnerabilities from 2009 and marks its first detailed examination of the risks linked to online and illegal gambling.
Illegal operators exploit regulatory gaps
FATF said illegal operators were prevalent across jurisdictions, regardless of whether gambling was legal or how the regulated market was structured.
Unlicensed offshore platforms can attract customers through promotions and greater confidentiality. They may also present themselves as legitimate businesses while exploiting differences in national licensing and anti-money-laundering (AML) frameworks.
The report linked the criminal misuse of gambling operators to corruption, cyber-enabled fraud, professional money laundering networks and organized crime.
Casinos — both land-based and online — and sports betting were considered particularly exposed to money laundering. Lotteries, scratch cards and some other forms of non-casino gambling were generally viewed as presenting lower risks.
Digital payments widen cross-border exposure
The expansion of online, cross-border and multi-product platforms has also increased the number of channels through which funds can move.
Cash, e-wallets, mobile money and virtual assets were among the payment methods identified as vulnerable. Their use across online platforms can allow funds to be transferred quickly across borders and converted between different forms of value.
FATF also warned that gambling platforms were increasingly connected to social media, digital marketplaces and software providers, some of which fall outside national AML and counter-terrorist financing frameworks.
Social media channels can be used to advertise illegal gambling, recruit money mules and coordinate competition manipulation. The report also identified their potential use for terrorist propaganda and fundraising, although terrorist financing cases involving gambling remain limited.
Transaction and ownership red flags
The indicators include deposits followed by withdrawals with little or no gambling, multiple small transactions designed to remain below reporting thresholds and payments made through accounts that do not match the registered player.
Other warning signs include several gambling accounts using the same device or IP address, frequent VPN use, third-party deposits and customers consistently betting on all possible outcomes to reduce the risk of losing funds during the laundering process.
At the corporate level, FATF flagged complex cross-border ownership structures that conceal beneficial owners or divide shareholdings to avoid regulatory checks.
FATF also identified operators’ dependence on white-label arrangements or third-party providers without adequate oversight as a vulnerability. The same applies to commercially questionable agreements involving software, marketing, consulting or technology providers.
FATF said junkets remained exposed to risks involving player anonymity and concealed beneficial ownership, despite their declining use and tighter regulation.
Stronger licensing and cooperation urged
FATF recommended stronger licensing and registration requirements to prevent criminal control of gambling operators. It also called for closer international cooperation and greater information sharing between regulators, law enforcement agencies and the private sector.
FATF President Giles Thomson said: “Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organised criminal networks.”
The organization urged jurisdictions to apply proportionate, risk-based measures rather than treating all gaming and gambling activities as presenting the same level of exposure.
https://agbrief.com/intel/10/09/2026/illegal-offshore-gambling-emerges-as-major-financial-crime-risk-fatf/