The Financial Action Task Force published its first update to gambling sector money laundering indicators in 15 years on 9 September, releasing a comprehensive report titled Risks of Gaming and Gambling. The new guidance, built on input from more than 80 jurisdictions, replaces red flag standards that have been in place since 2009.
The report’s headline finding highlights a dramatic shift in the global gambling landscape: in many countries, the unlicensed market now rivals or exceeds the size of the licensed sector. This development carries significant implications for both regulated operators and the financial institutions that service them.
Four Key Red Flags Banks Will Monitor
The updated FATF guidance outlines specific indicators that financial institutions will use to screen gambling-related transactions. The first red flag involves money moved through a platform without any real gambling activity, a classic sign of potential money laundering through gaming accounts.
Smurfing, the practice of breaking large transactions into many smaller ones to avoid detection thresholds, represents the second major indicator. This technique has become increasingly sophisticated as criminals adapt to automated monitoring systems.
The third warning sign covers the use of multiple accounts and payment methods under different identities, along with payment details that do not match the registered customer. This pattern suggests attempts to obscure the true source or destination of funds moving through gambling platforms.
Why This Matters for Licensed Operators
The 15-year gap between updates reflects how dramatically the gambling sector has evolved since 2009. The original guidance predated the mobile gambling revolution, cryptocurrency adoption, and the explosive growth of online betting markets across emerging jurisdictions.
For licensed B2B platform providers and operators, the new standards will likely translate into enhanced compliance requirements. Financial institutions rely on FATF guidance to shape their risk assessment frameworks, meaning gambling businesses should expect more detailed scrutiny of transaction patterns and customer verification processes.
Unlicensed Market Growth Drives Policy Shift
The finding that unlicensed gambling now matches or surpasses licensed activity in many markets represents a critical challenge for the regulated sector. This growth in gray and black market gambling not only diverts revenue from compliant operators but also concentrates money laundering risk outside regulated frameworks.
The breadth of jurisdictional input, spanning more than 80 countries, suggests the FATF findings reflect global rather than regional trends. Platform providers operating across multiple markets will need to assess how the new red flags align with their existing transaction monitoring and know-your-customer protocols.
The updated guidance arrives as regulators worldwide intensify focus on gambling sector compliance, making it essential reading for compliance officers and risk management teams across the iGaming supply chain.
