FATF Sounds New AML Alarm Over Gambling’s Digital Underworld

• Global watchdog flags smurfing, fake identities and illegal operators as gambling platforms become faster, more digital and harder to police.

The Financial Action Task Force (FATF) has issued a new warning over the growing use of gaming and gambling platforms for money laundering, terrorist financing and proliferation financing, publishing a fresh set of risk indicators for regulators, financial institutions and operators.

The warning comes as online gambling becomes increasingly cross-border, multi-platform and dependent on multiple payment channels, creating new routes for criminals to move money through the financial system.

The FATF said criminals may use gambling platforms to move funds without actually gambling, while others can split transactions into numerous smaller payments — a practice known as smurfing— to avoid detection.

The watchdog also identified suspicious betting patterns, including unusually large or coordinated bets on events that may be vulnerable to competition manipulation.

Other red flags include customers operating multiple accounts under different identities, discrepancies between gambling-account details and payment-account information, suspicious identity documents and repeated use of VPNs to conceal location.

The FATF’s year-long project drew contributions from more than 80 jurisdictions, industry bodies and researchers and represents its first detailed examination of risks associated with online and illegal gambling.

Illegal gambling emerged as one of the most significant risks identified by the watchdog, with the FATF warning that illegal markets can rival or exceed legal gambling markets in some jurisdictions. Offshore and unlicensed operators can exploit regulatory gaps and offer anonymity attractive to criminal actors.

The watchdog also flagged vulnerabilities involving cash, e-wallets, mobile money and virtual assets, as well as complex ownership structures that can obscure beneficial owners.

For AML compliance teams, the message is clear: gambling-sector monitoring can no longer focus solely on traditional casino activity. Customer identity, payment behaviour, account structures, betting patterns, beneficial ownership and links to other criminal activity increasingly need to be assessed together.

FATF President Giles Thomson urged governments to strengthen oversight, tackle illegal and offshore operators, improve international cooperation and deepen public-private information sharing.