Monitoring junket & players for CFT: A must for safer gaming
Casinos and online gambling platforms handle enormous sums of money every day, making them attractive targets for money laundering and, potentially, terrorist financing. While high-stakes bets often grab headlines, criminals are increasingly exploiting subtle methods, such as dispersing small deposits across multiple accounts, a tactic known as smurfing, or using prepaid vouchers and anonymous top-ups.
For example, the Financial Action Task Force (FATF) notes that smurfing involves numerous small deposits to avoid reporting requirements. In Canada, the Financial Transactions and Reports Analysis Centre (FINTRAC) acknowledges that the use of mule accounts at online gambling sites is a known typology for laundering proceeds of crime.
Even legitimate VIP programmes and junkets, a popular practice in Asia, can be exploited to move illicit funds without detection. A notable example is Alvin Chau, founder of Macau’s Suncity Group, who was sentenced in January 2023 to 18 years in prison after being convicted on 289 charges, including fraud, running a criminal syndicate, and operating illegal gambling activities. His operations were estimated to have cost the Macau government around $1 billion (€850.7 million) in tax revenue between 2013 and 2021 through these side-betting schemes.
Although there are no cases that have been made public that directly connect iGaming platforms to terrorist attacks, investigations frequently point out that significant terrorist incidents, such as the 9/11 attacks in the United States and the London bombings, were financed with relatively modest sums. Since then, there has been intensified regulatory awareness of low-value but high-frequency transactions that might bypass conventional monitoring systems.
Understanding European actions
In Europe, authorities have amended multiple policies keeping the anti-money laundering (AML) and counter-terrorist financing (CTF) compliance in mind. The European Union now mandates operators to move beyond one-off checks, requiring continuous monitoring of player behaviour, stricter reporting of suspicious activity, and closer scrutiny of third parties such as affiliates and payment processors.
As a result, operators must conduct comprehensive, risk-based due diligence, keep an eye out for questionable activity, and guarantee clear ownership structures. Penalties of up to €2.5 million or up to 18 years in prison may be imposed for noncompliance. Strong internal governance is crucial, as evidenced by recent reforms that also require regular risk assessments and biannual audits.
However, operators and providers still have many responsibilities to remain accountable for safeguarding their platforms and users. SiGMA News spoke with Kris Galloway, the Head of iGaming Product of SumSub, during SiGMA Euro-Med in Malta to understand how the money moves through CTF loopholes and what more can be done to enhance the existing practices of the industry.
“Transaction monitoring isn’t just for fraud – it’s key for responsible gambling, anti-money laundering, and counter-terrorist financing”
– Kris Galloway, Head of iGaming Product, SumSub
Galloway pointed to several areas where both land-based and online casinos can be vulnerable to misuse. He pointed to the risks of heavy cash flows, explaining that operators sometimes allow minimal gameplay to conceal illicit funds, a process known as smurfing. Galloway stated, “Layering bets to evade monitoring and then cashing that out as winnings. That’s also called smurfing, where you’ll layer your bets as much as possible. There’ll be instances where the casino itself is a front for this exact objective.”
He added, “Heavy cash flows allow one to disguise what you’re doing with more ease. If you have a high cash flow, especially in a brick-and-mortar casino, then it means you’re able to layer those bets much easier and ultimately determine their destination with less suspicion from the operator or from the casino.”
Role of junkets, VIP and vouchers
Galloway also stressed the risks associated with VIP programmes and junkets, particularly popular in Asia. “There’s growing suspicion surrounding junkets and how they might be exploited for this very purpose. If not controlled, they can embed illicit funds with VIP funds in a very simple manner,” Galloway said. He also gave an example: “If you’re running a junket and a VIP gives you $100,000 for a poker game, you can cash in those chips. But you might add in 200k of your own money or mix with other VIPs’ funds — and then cash that out at the end. Those chips could have come from anywhere.”
Sometimes, high deposit and withdrawal thresholds, combined with a focus on loyalty, can overshadow proper risk checks. Galloway stressed, “Account management can suppress suspicion. In the past, there has been so much focus on taking care of VIPs that you may sometimes not pay as close attention to red flags or suspicious risk scores as you would with a regular player,”
A call for monitoring and data-sharing
On regulatory compliance, Galloway pinpointed the need for continuous monitoring rather than one-time onboarding checks. “There’s a shift from one-time onboarding checks to continuous monitoring — travel rule in crypto, ongoing risk-based monitoring — and that’s really important. A lot of regulators are still lagging behind. Typically, there might be a transaction monitoring system to prevent fraud, and then a regulator might catch on to how that could also be used for responsible gambling, anti-money laundering, and terrorist funding.”
He also called for stricter reporting requirements, risk-based categorisation of players, and the need to screen affiliates and third-party payment partners. Discussing voucher systems and remote top-ups.“It’s easy to assume small top-ups are harmless, but that’s dangerous. Services like PaySafeCard or Neosurf that allow anonymous deposits absolutely leave blind spots.”
Galloway also called for sanctions screening and transaction monitoring. “The real effectiveness comes from tying screening into ongoing behaviour. Criminals spread funds across multiple micro deposits to avoid detection. Behavioural analytics are key, otherwise operators drown in false positives,” he added.
Galloway shared that cross-border information sharing on gambling-related financial crimes has improved significantly over the past five years and he said that’s a positive sign. He said that platforms like GoAML have helped European authorities coordinate more effectively, while proactive jurisdictions such as the EU, the US, and Canada are leading the way. However, some regions still lag behind, indicating that further progress is needed to streamline international cooperation fully. As the sector develops, protecting players and platforms will require proactive use of technology, analytics, and international collaboration in addition to regulations.
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