Cleaning up the game

EDITORIAL: It seems the rapid expansion of online gaming and gambling has created a remarkably convenient new highway for illicit money just as regulators are struggling to police the increasingly complex digital routes through which it moves. The Financial Action Task Force’s (FATF’s) latest warning, based on surveys across 80 jurisdictions, therefore, deserves urgent attention. Platforms built to move money quickly across borders, payment systems and currencies can also be exploited to launder criminal proceeds, finance terrorism and, to a lesser extent, facilitate proliferation financing. And, as the digital economy becomes more interconnected, following the money is becoming considerably harder. The scale of the regulatory problem has grown with the industry itself. Online gambling platforms can operate across jurisdictions, accept payments through cash, e-wallets, mobile money and virtual assets, and connect with social media, digital marketplaces and other services. Some participants in this sprawling ecosystem fall outside conventional anti-money laundering and counter-terrorist financing frameworks altogether. A transaction can therefore cross several regulatory boundaries almost as quickly as a user can place a bet, while investigators remain constrained by national laws, different reporting requirements and cumbersome mechanisms for international cooperation. Criminals have predictably discovered the possibilities. FATF has identified cases where gambling platforms are used to transfer money without meaningful gambling activity, while multiple small transactions can be employed to avoid detection. Large or coordinated bets can raise separate concerns about manipulation. Illegal and unlicensed offshore operators present an even greater challenge because they can masquerade as legitimate businesses while providing the anonymity that both ordinary customers and criminal networks may find attractive. In some jurisdictions, FATF says, illegal gambling markets rival or even exceed their legal counterparts. This should trouble countries such as Pakistan in particular. The country has spent years strengthening its anti-money laundering and counter-terrorist financing architecture and knows from painful experience the economic and reputational consequences of deficiencies in financial monitoring. Digitalisation now demands that those systems evolve continuously. Financial intelligence designed primarily around banks, conventional transfers and identifiable intermediaries will struggle if illicit funds migrate towards platforms and payment channels where ownership, location and purpose become progressively harder to establish. The difficulty for regulators is that technological innovation will almost always move faster than legislation. Closing one route can merely redirect activity towards another platform, payment instrument or jurisdiction. And because online businesses can serve customers without maintaining a meaningful physical presence where those customers live, enforcement increasingly depends upon international cooperation. Regulatory differences between countries become opportunities for criminals to exploit, especially when information cannot move between authorities as quickly as money moves between accounts. FATF’s new risk indicators should therefore be treated as operational guidance rather than another document for compliance files. Regulators, financial institutions, payment providers and law-enforcement agencies need mechanisms for identifying suspicious transaction patterns across gaming-related payments, particularly rapid movement of funds, repeated small transactions and dealings involving unlicensed operators. Information-sharing between public authorities and private financial intermediaries must also become faster, while emerging payment channels need to be incorporated into risk assessments before criminal networks establish themselves comfortably inside them. There is an unavoidable wider lesson here. The same digital revolution that has made international commerce cheaper, faster and more accessible has also transformed the business of moving dirty money. Criminal finance no longer requires suitcases of cash, accommodating bank managers or elaborate chains of shell companies when value can travel through a growing ecosystem of platforms almost instantaneously. For regulators, therefore, the game has changed rather dramatically. Unfortunately, the people laundering the money appear to have noticed first. Copyright Business Recorder, 2026

Read full story on Business Recorder