FINTRAC Issues Money Laundering Alert for Online Gambling

Be Vigilant: FINTRAC Raises Alarm on Money Laundering Risks in Online Gambling

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has sounded a clear warning to the gambling sector. In a special bulletin, FINTRAC has flagged the heightened risk of money laundering through online gambling, urging operators and payment providers to remain vigilant and report any suspicious activity promptly.

Assessing the Risks: Identifying Money Laundering Threats

FINTRAC’s bulletin serves as a valuable resource to help gambling industry stakeholders recognize and evaluate money laundering and terrorist financing risks effectively. By being proactive and watchful, those in the gambling sector can play a crucial role in detecting and reporting any potentially illicit activity.

Online Gambling’s Elevated Threat Level

The alert emphasizes the unique risks associated with the online gambling sector. It’s worth noting that Canada’s Updated Assessment of Inherent Risks of Money Laundering and Terrorist Financing elevated the threat level in the online gambling sector from ‘high’ to ‘very high’ last year. The reasons for this upgrade are rooted in the ability of organized crime groups to operate or exploit gambling sites, both within Canada and in foreign jurisdictions accessible from Canadian locations.

Recognizing ‘Red Flags’: Indicators of Money Laundering

FINTRAC’s bulletin provides a list of ‘red flags’ that gambling operators should be on the lookout for in customer behavior. These red flags include situations where a customer’s spending patterns are inconsistent with their apparent financial situation. Also, if identification details appear to be false, stolen, or inaccurate, it should raise suspicion.

Other indicators include customers opening multiple accounts under different identities, multiple accounts controlled from the same IP address, discrepancies between client information held by payment providers and personal account details, and inconsistent deposit and withdrawal methods.

Reporting Suspicious Activity: A Shared Responsibility

Both gambling operators and payment providers have a shared responsibility to report any suspicious financial activity to FINTRAC. This responsibility comes into play when there are “reasonable grounds to suspect that a transaction, or attempted transaction, is related to the commission or attempted commission of a money laundering offense.”

Operators and reporting entities are encouraged to consider all relevant activity when assessing the risk of money laundering, as a single indicator may not appear suspicious on its own.

While Canada has issued a stark warning regarding the increased money laundering risk in online gambling, other jurisdictions like Malta and Alderney have also made adjustments to their risk assessments. Staying vigilant and proactive in the fight against money laundering remains a global imperative in the gambling industry.