ISLAMABAD: The Financial Action Task Force has warned of emerging risks to economies from the rapid growth of online gaming and gambling and issued new indicators to help countries combat money laundering, terrorist financing and proliferation financing.
‘As gaming and gambling services become increasingly digital, cross-border and interconnected, new money laundering, terrorist financing and proliferation financing risks are emerging, the Paris-based global watchdog said on Wednesday after conducting surveys across 80jurisdictions.
The FATF sets international standards to combat illicit finance and assesses whether countries are taking effective action to address money laundering, terror-ist financing and proliferation financing.
Its latest findings and risk indicators examine risks across casinos, gambling and online gaming, including online platforms, payment channels, illegal operators and their links with the overall financial system.
The FATF said the gaming and gambling industries had changed significantly in recent years and continued to evolve through the expansion of online, cross-border, multi-product and multipayment platforms.
‘Gaming and gambling establishments and platforms are now part of a broader interconnected value transfer ecosystem with numerous actors, some of which fall outside national anti-money laundering/counter-terrorist financing (AML/CFT) regulatory frameworks,’ it said.
The watchdog said varying levels of AML/CFT regulation and differing understanding of gaming-related risks across jurisdictions had contributed to growing money-laundering and terroristfinancing risks and, to a lesser extent, proliferation-financing risks.The FATF also alerted countries and regulators how to spot and block the abuse of the gaming and gambling sectors, including criminals using gambling platforms to move money without actually gambling, making multiple small transactions known as ‘smurfing’ to avoid detection and unusually large or coordinated bets on events nagged for possible competition manipulation.
Its analysis identified new opportunities for criminal abuse in the gaming and gambling sectors, following an increase in market size globally, a rise in the use of online platforms and as payment methods allow rapid, anonymous transactions acrossborders.
It identified illegal gambling as one of the sector’s most significant risks. In many jurisdictions, illegal markets rival or even exceed the size of legal gambling markets.
Illegal gambling operators are prevalent across jurisdictions, regardless of the legal status of gambling or the regulatory frameworks in place. Illegal and unlicensed offshore operators often present themselves as legitimate businesseswhile offering anonymity and incentives that can attract both consumers and criminal actors.
Itsaidthe technologicalinnovationhad expanded activity across online, crossborder and multi-payment platforms, creating increasingly complex ecosystems for regulators and law enforcement.
With gaming and gambling activities increasingly interconnected with the wider digital e conomy, they provide multiple points of access to the formal financial system by using cash, e-wallets, mobile money and virtual assets.
Gaming and gambling platforms depend on a wide range of related services, including social media platforms, digital marketplaces and software developers. These actors may fall outside existing regulatory frameworks, creating additional opportunities for criminal abuse.
It alerted that criminals and illegal operators can exploit differences in regulatory approaches across jurisdictions.
These differences can also create barriers to information sharing between private and public sectors and challenges in international cooperation.