FATF Warns of Smurfing: New AML Guidelines for the Gambling Market

The Financial Action Task Force (FATF) has released a new guidance report warning the global gambling industry about increasingly sophisticated money laundering methods. The report identifies specific risk indicators to help authorities and operators detect suspicious betting activities early. A central issue is 'smurfing', where criminals split large sums into numerous small transactions to stay below the reporting thresholds of financial institutions. The FATF emphasizes that gambling platforms are often misused to move money without the actors having any actual intent to gamble.

The document is the result of a year-long study involving over 80 jurisdictions, industry bodies, and research institutions. For the first time, the task force has conducted a detailed examination of risks within the online gambling sector and illegal gambling markets. The organization is particularly critical of the increasing complexity brought by new payment systems such as e-wallets, mobile money, and virtual assets, which offer attractive loopholes for criminal networks.

Numbers and facts

The report makes it clear that the threat level is serious. In some regions, the revenues of illegal markets exceed those of the regulated sector. Giles Thomson, President of the FATF, issued an urgent appeal to the international community. The new guidelines list concrete warning signs, including the repeated use of Virtual Private Networks (VPNs) to conceal identity and the refusal of customers to verify their identity via video call. Another warning sign is when the account details of the payment method do not match the user details of the betting account.

"Without robust safeguards, these sectors can be attractive gateways for fraudsters, professional money launderers and organised criminal networks. I urge all governments to take note of the risk indicators we have set out, and put in place appropriate risk-based responses." - Giles Thomson, FATF President

Background

The FATF notes that criminals specifically exploit regulatory gaps. The concealment of beneficial ownership through complex corporate structures to bypass regulatory thresholds is particularly problematic. This occurs primarily where controls to combat money laundering and corruption are weak. Interestingly, the British Gambling Commission, in its update from July 10, 2026, rates the risk of terrorist financing in the sector as low, while the FATF generally urges vigilance as methods change rapidly due to the pandemic and technological advances.

A key aspect of the report is the investigation of coordinated betting manipulation. Unusually large or coordinated bets on specific events are now clearly classified as a risk indicator for money laundering or competition manipulation. The FATF calls for deeper public-private collaboration to take action against these professional money laundering structures.

Why it matters for German players

For German players, these new guidelines primarily mean even stricter verification processes. Germany has already created a system with the 2021 State Treaty on Gambling (GlüStV 2021) and the Joint Gambling Authority of the States (GGL) that meets many of the FATF's demands. The monthly deposit limit of 1,000 euros, monitored via the LUGAS system, prevents massive smurfing by individuals at the source. The stake limit of 1 euro per spin on online slots also significantly limits the volume per transaction.

Anyone playing at a licensed operator in Germany must undergo full verification. The FATF's requested rejection of players who evade a video ident process is already standard in Germany. The use of VPNs to bypass country blocks is also prevented by reputable providers, as this violates license conditions. For honest players, this means higher bureaucratic effort during registration, but simultaneously much higher protection against fraud and criminal activities surrounding the platforms.

What it means for GGL-licensed casinos

Casinos with a GGL license must now prepare their compliance departments to integrate the specific FATF indicators into their automated monitoring systems. Since the GGL whitelist only includes providers that meet the strictest requirements for IT security and player protection, German providers are already pioneers here. They must ensure that deposits and withdrawals only run through accounts in the player's name, which is exactly one of the FATF's core demands. Companies showing weaknesses in identity verification risk the revocation of their license and high fines in Germany. The FATF guidelines provide German authorities with additional arguments to take even tougher action against illegal offshore providers that often operate without any AML controls.