FATF issues Red Flag Risk Indicators Report for the Gaming and Gambling Industries

Red Flag Risk Indicators - Gaming and Gambling

On the 9th September 2026, the FATF published  its "Red Flag Risk Indicators – Risks of Gaming and Gambling." FATF weirdly groups gambling (and betting), with digital gaming (video gaming), and places both sectors under the same publication. – Why?  Because it has identified that as both gaming and gambling are becoming more digital, interconnected and cross-border, so Money Laundering and Terrorism Financing risks keep evolving.

Whilst the FATF  identifies money laundering through gambling, as an "established risk", confirming its previous assessments on the gambling and betting sector, it also presents that online digital/mobile gaming attracts less money laundering activity than online gambling but higher terrorist-financing misuse than gambling, due to its social and technological features. The report also tries to assess intersections between online gambling and digital gaming and flags social media integration with gaming platforms as enabling higher risks of for instance competition manipulation, promotion of unlicensed operators, money-mule recruitment, terrorist financing and terrorist propaganda and grooming.

The FATF’s analysis considered the “most common gaming and gambling verticals across jurisdictions, divided into casinos, sports and novelty betting, other non-casino gambling, and online digital (video)/mobile gaming. Overall, the findings indicate an increase in market size globally, a rise in the proliferation and the use of online platforms, and an overlap of services and payment mechanisms (e.g. cash, card, bank transfer, virtual assets, mobile money, third-party intermediaries and money or value transfer services).”

The report presents five categories of red flags:  

1. customer behaviour and profile (land based gambling, online gambling)  — covering things like bribing staff, VPN/multi-device concealment, mismatched IDs, PEP status, sanctions-list hits, extremist content on accounts;
2. online account activity  - in relation to frequent transfers to/from many parties, sudden large deposits to dormant accounts, multiple accounts sharing same IP address;
3. betting patterns – on how deposits are structured not to surpass reporting thresholds, hedged or collusive betting, chip dumping, improbable win streaks,  and non-genuine play;
4. payment methods and transactions  - heavy cash use (land based gambling), rapid smurfing-style cash deposits, mismatched payment names, deposits followed by immediate withdrawal with minimal play, mule-account indicators, bypassing responsible-gambling limits; and
5. product and platform features - with complex cross-border ownership hiding beneficial owners, weak third-party/white-label oversight, commercially senseless contracts, rapid unexplained expansion into virtual assets, frequent brand/URL changes and sham-merchant abuse).

The FATF report hints at mitigation factors that jurisdictions could adopt, such as for supervisors and subject persons to keep abreast with the evolving and technologically integration happening with the sector(s), strengthening supervisory controls on both sectors, raising public awareness about the risks of unlicensed offshore gambling, and strengthening international cooperation between jurisdictions.

Malta has been regulating the gambling sector for more than a quarter of a century, and was the first  EU Member State to regulate the online gambling sector way back in 2004.  It’s supervision evolved with the technological advancements of the sector and also used regulatory sand boxes to learn new models and technologies at the same pace as they developed.  Thus, many of the red flags listed by the FATF have been taken into consideration as the risks associated to such developments became more prominent, more probable or developed a higher negative risk impact. 

Should you wish to learn more about how the above mentioned red flag risk indicators and how they could affect or shape your business, then send an email to our gaming, gambling and AML team at info@gtg.com.mt.  

FATF’s Report reviewed by Reuben Portanier