Identifying the risk of proliferation financing in the gaming and gambling sector

In September 2026, the Financial Action Task Force (FATF) published the report “Risks in the Gaming and Gambling Sector - Red Flag Indicators”[1], which examines the risks of money laundering (Money Laundering - ML), terrorist financing (Terrorist Financing - TF) and proliferation financing (Proliferation financing - PF) in the gaming and gambling sector. The report shows that the rapid growth of online gaming and gambling, cross-border transactions and the use of diverse payment methods have created vulnerabilities that can be exploited for illicit financial activities. However, the FATF assesses the PF risk in the gaming and gambling sector as currently very limited, significantly lower than the ML and TF risks addressed in the study.

Although the FATF assesses the PF risk in the gaming and gambling sector as currently very limited, identifying red flag indicators remains important, because these indicators may reflect the possibility of the sector being misused as an intermediary channel in concealing, moving or converting funds linked to the proliferation of weapons of mass destruction. The issue of concern is not only the gambling transaction itself, but the links between the customer, the source of funds, the payment method, the beneficiary and the economic activities behind the transaction.

For example, where a customer's wealth or income is linked to international trade in dual-use goods with sanctioned countries, this may raise questions as to whether the funds are connected to the supply, sale or transfer of goods and technologies that could be used in programmes for the proliferation of weapons of mass destruction. If funds from such activities are then channelled into gaming accounts, betting activities or related payment methods, tracing the origin and true purpose of the funds may become more complex.

Similarly, where a customer or beneficial owner named on a sanctions list has ownership, control or significant links with designated organisations or individuals, this should be examined in terms of the risk of evasion of targeted financial sanctions. The use of other people's accounts, intermediary legal entities or complex ownership structures in the gaming and gambling sector may make it difficult to identify who actually controls or benefits from the funds.

As regards fund flows, money being transferred through multiple international bank accounts, intermediary accounts or third parties, or being split, aggregated and then dispersed across multiple transactions, may create a multi-layered chain of transactions that reduces the ability to identify the link between the original source of funds and the ultimate party. In the PF context, these methods may be exploited to conceal the provider of funds, the beneficiary or the actual purpose of the funds, especially when transactions involve countries, territories or persons subject to sanctions by the United Nations Security Council.

The use of virtual assets raises similar issues. When fiat currency[2] is converted into virtual assets, moved through multiple wallets or platforms and then converted back into fiat currency, determining the origin, the beneficial owner and the end use of the value of the assets may become more difficult. If factors such as unlicensed wallets, overseas platforms, cross-border transactions or customer information inconsistent with the scale of transactions are also present, consideration should be given to whether this may indicate the use of financial channels to conceal or evade PF-related controls.

In particular, complex ownership structures and the concealment of beneficial ownership may enable designated organisations and individuals, or those linked to WMD proliferation networks, to gain indirect access to financial services. The use of nominees, intermediary legal entities, trusts or the division of ownership to avoid control thresholds may prevent service providers from identifying who actually owns, controls or benefits from accounts and transactions.

Thus, from a PF perspective, the risk in the gaming and gambling sector lies mainly not in gambling itself generating funds for the proliferation of weapons of mass destruction, but in the possibility of the sector's platforms, accounts and payment methods being misused as a link in a wider financial chain. This chain may include receiving funds from trade or financial sources linked to high-risk persons; moving money through multiple accounts, payment methods or jurisdictions; concealing beneficial ownership; and then transferring value to persons or activities related to the proliferation of weapons of mass destruction. Therefore, the detection of one or more red flag indicators should be considered in relation to the customer's entire profile and transaction flows, rather than assessing each indicator in isolation.

In countering PF, the red flag indicators issued by the FATF play an important role in helping relevant agencies, organisations and individuals identify anomalies that may appear in a complex financial chain. A customer who has links to trade in dual-use goods; transacts with countries, territories or persons subject to sanctions by the United Nations Security Council; uses multiple accounts, payment methods and virtual assets; or has a complex ownership and control structure is not necessarily engaged in PF activity. However, when several indicators appear at the same time and are connected in terms of parties, fund flows, geographical location or transaction purpose, the need for further checks, verification and in-depth analysis increases.

For organisations and individuals operating in the gaming and gambling sector, the requirement is not only to carry out customer due diligence and transaction monitoring to detect ML and TF, but also to gradually improve their ability to identify signs that may be related to PF. Particular attention should be paid to links between customers and beneficial owners and designated organisations or individuals; the origin and purpose of cross-border fund flows; trade in dual-use goods; the use of anonymous or hard-to-trace payment methods; and signs that a customer may be seeking to evade targeted financial sanctions.

As gaming and gambling become increasingly digitalised, cross-border and connected to multiple payment methods, early identification of the above indicators will help limit the possibility of legitimate financial channels being misused as intermediaries for WMD proliferation activities. At the same time, it provides a basis for strengthening information exchange between organisations and individuals operating in this sector and the competent authorities, improving the effectiveness of the risk-based approach and the implementation of measures to prevent, detect and address PF risks in line with international requirements./.

Vu Quang Dai - Centre 81

[1] https://www.fatf-gafi.org/en/news/risks-of-gaming-and-gambling-2026.html

[2] Fiat currency is currency issued by the government of a country and legally recognised for use in the economy.