Why the FATF matters to gambling operators

The gambling industry likes to think of itself as global. Players move across borders, payments settle in seconds and operators scale across jurisdictions with relative ease. Yet beneath this apparent fluidity sits a constraint more powerful than most gambling regulators: the Financial Action Task Force (FATF).

FATF does not license casinos, approve betting platforms or regulate online wallets. Instead, it sets anti-money laundering (AML), counter-terrorist financing and sanctions-related financial crime standards that its 200-plus member jurisdictions are expected to implement. Its most visible tool is reputational rather than legal: the black, grey and white lists of jurisdictions with strategic deficiencies.

Every few years, those lists are updated. The February 2026 plenary added Kuwait and Papua New Guinea to the grey list, bringing the total to 22 jurisdictions under increased monitoring, with no removals in that cycle. Two countries – Algeria and Namibia – are now considered close to exit. For gambling operators, the significance is not the listing itself. It is what happens next.

A system built on financial gatekeepers

FATF’s influence over gambling is indirect but far-reaching. It operates through banks, payment service providers (PSPs), acquirers and regulators rather than through gambling-specific rules. Richard Williams of Keystone Law describes the mechanism plainly: “FATF status has a direct impact on regulators and hence operators. It also has an indirect impact on banks, payment processors and compliance teams.”

This indirectness is precisely what gives FATF its reach. A grey listing does not prohibit gambling activity in a jurisdiction, but it does change the risk profile applied by every financial intermediary involved in moving money in and out of it. Payments become slower, customer checks become stricter and onboarding takes longer.

Tamsin Blow of CMS Law notes that while FATF does not regulate gambling directly, it sets standards that “should be implemented by its over 200 member countries”, meaning gambling regulators must integrate FATF expectations into licensing and supervision. The UK Gambling Commission, she adds, expects “robust” checks where higher-risk jurisdictions are involved.

Netherlands gambling sector shielded from FATF scrutiny

Yet FATF’s influence is not felt equally everywhere. In the Netherlands, Chris Adriaansz of Franssen Tolboom argues that the practical impact on licensed operators is often more limited than the broader narrative suggests.

The reason lies in market structure. Dutch remote gambling licences are intended primarily for customers on Dutch soil, meaning the overwhelming majority of customers are domestic residents. Unless the Netherlands itself were subjected to enhanced monitoring, FATF designations affecting other jurisdictions are unlikely to affect a significant proportion of an operator’s customer base.

“Frankly, we do not see much of an effect of FATF grey-list and black-list decisions on licensed gambling operators in the Netherlands,” says Adriaansz.

The result is a system where enforcement is passed down through layers. FATF identifies risk, financial institutions price it, regulators incorporate it into their expectations and gambling operators absorb the consequences. But how strongly those consequences are felt depends heavily on the structure of the market in question.

2026: Small changes, structural effect

The February 2026 changes were modest in headline terms – two additions, no removals – but material in operational impact.

Kuwait was added following deficiencies identified in its mutual evaluation, particularly weak beneficial ownership transparency and limited effective enforcement of complex money laundering cases. Papua New Guinea was added due to systemic weaknesses in financial crime enforcement capacity and sanctions implementation.

A recent blog by industry commentator John Garfield highlights why such technical findings matter for gambling compliance teams. “The Cyprus Gaming Commission publicised the update to its licensees within three days,” he noted, signalling that gambling regulators now expect FATF responsiveness on the same timeframe as banks and electronic money institutions.

He adds a structural warning: “FATF Plenaries happen three times a year. Most operators only update their country risk matrices once. That gap is where regulators and PSPs find compliance failures.” FATF is not just changing lists. It is speeding up compliance.

The Philippines offers an example of how FATF pressure can reshape gambling oversight over a longer period. Andrew Klebanow of Klebanow Consulting notes that weaknesses in the country’s anti-money laundering framework had long concerned international casino developers, particularly because PAGCOR historically operated as both regulator and operator.

He says the Anti-Money Laundering Act of 2001 “excluded casinos from certain reporting requirements”, This weakness was exposed by the 2016 Bangladesh Bank cyber heist, in which a Philippine casino played what he describes as “a critical but unwitting role” in the theft. “The FATF closed that loophole and further enhanced oversight of the industry,” he says.

How FATF grey-listing affects gambling markets

The immediate effect of a grey-list designation varies. It plays out differently across markets depending on financial infrastructure, gambling exposure and regulatory maturity.

For operators with exposure to Kuwait, the most immediate impact is likely to be payment friction rather than market exclusion. Cross-border transactions involving grey-listed jurisdictions are typically subject to enhanced due diligence by payment service providers and banks. That can translate into slower deposits, increased rejection rates, or the introduction of additional verification layers for both operators and end users.

Papua New Guinea presents a different profile. Here, the issue is less about high-volume gambling flows and more about underlying financial system limitations. In both cases, the operational effect is similar: higher compliance costs, tighter transaction monitoring thresholds and a greater likelihood of de-risking by financial intermediaries.

The Dutch experience suggests that the impact of new FATF listings depends heavily on a market’s regulatory model. According to Adriaansz, most Dutch operators already use automated systems that screen customer jurisdictions against FATF and EU grey and black lists during registration. As a result, grey-listing usually affects only a small number of players, with operators deciding on extra checks or, in some cases, account closure.

In highly domestic markets, therefore, FATF updates may create compliance work without fundamentally altering commercial strategy. In internationally focused gambling hubs, by contrast, the consequences tend to be felt much more acutely through payment channels, banking relationships and investor perceptions.

Garfield’s “30-day response framework” reflects how operators are expected to respond: immediate risk classification updates, retrospective customer reviews, updates to monitoring rules and formalised policy amendments. Speed of response is now a compliance measure in itself.

Malta and Gibraltar forced to re-establish credibility

If the 2026 additions illustrate FATF’s forward pressure, Malta and Gibraltar show its longer tail.

Davinia Cutajar of law firm WH Partners describes Malta’s grey-listing as creating “immediate and tangible difficulties most acutely in banking and payment processing”. Operators were “presumed to carry elevated jurisdictional risk” and forced to re-establish credibility across multiple financial partners.

Importantly, she notes that regulatory reform accelerated in response. Customer due diligence standards tightened, source-of-funds scrutiny deepened, and AML governance became more board-level. But reputational recovery was slow. Investors stayed cautious, and risk remained part of due diligence even after removal.

Gibraltar’s experience, according to government gambling commissioner Andrew Lyman, highlights another dimension: perception and politics. While its grey-listing was not driven by gambling-specific failures, he acknowledges that “we did feel a degree of inherent negative subjectivity and assumptions about the risk profile of the jurisdiction because it was a gambling hub”.

He notes that there was no mass operator exit, but potential inward investment may have been lost. Payment providers, meanwhile, were more volatile: “Some of the bigger financial institutions just went for the easy option of having a disproportionate blanket de-risking policy.”

Lyman also raises a broader concern. FATF and MONEYVAL – a permament monitoring body of the Council of Europe – are “ostensibly international standards bodies”, he says, but “there is also a political dimension” to their work. Debate has emerged over whether smaller jurisdictions and international finance centres face more intense scrutiny than larger economies with potentially greater financial crime exposure.

FATF influence on political priorities

The Philippine experience also illustrates the limits of FATF’s influence when compared with domestic political priorities. Klebanow notes that while enhanced monitoring increased scrutiny following the Bangladesh Bank heist, the country’s offshore gaming sector continued to expand.

“POGOs (underground gaming venues) flourished during that same period,” he says. In his view, meaningful change did not occur until there was a shift in national political leadership and at PAGCOR, culminating in the eventual demise of the POGO industry. “FATF certainly played a role but not as much as sheer political will.”

Yet despite those reservations, he acknowledges the benefits. “Processes are more structured, there is more cooperation between agencies at an intelligence level.” FATF pressure is not only restrictive. It also shapes enforcement systems.

Different levels of compliance pressure

Across jurisdictions, FATF classification increasingly functions as a shorthand for financial risk assessment. Cutajar notes that the FATF grey-listing in Malta led to investors treating jurisdictional exposure as a distinct risk category in transaction due diligence. Williams similarly observes that operators and investors now treat FATF status as a proxy for AML robustness and reputational exposure.

This matters because gambling is capital-intensive and payment-dependent. Even small shifts in banking appetite or PSP pricing can alter market viability. As Williams puts it, banks and payment providers “continue to de-risk their operations by avoiding jurisdictions that have weak AML controls”.

FATF scrutiny also tends to fall unevenly across gambling verticals. Klebanow argues that junket operations have been particularly affected because of their long-standing association with money laundering risks. “FATF scrutiny played a positive role in restricting this kind of illicit behaviour,” he says.

The latest FATF changes reinforce an emerging pattern: gambling no longer operates in a uniform global regulatory environment but across a layered compliance landscape. This can be broken into three broad categories.

Mature hubs versus resource-limited jurisdictions

First are mature hubs with strong regulatory frameworks – such as Malta and Gibraltar – which may experience temporary grey-listing but retain structural access to banking and investment, albeit with increased scrutiny. Second are emerging or developing markets, where grey-listing exposes weak financial systems and leads to payment issues and more de-risking by financial firms.

Third are structurally high-risk or resource-limited jurisdictions such as Papua New Guinea, where FATF designation combines with wider financial system weaknesses to create ongoing friction rather than a return to normal.

The Netherlands arguably represents a fourth category: highly regulated domestic markets where FATF considerations are largely embedded within existing compliance systems and therefore felt less dramatically at an operational level. As Adriaansz notes, most Dutch operators encounter relatively few customers from newly listed jurisdictions, limiting the practical impact of FATF updates.

In all cases, the gambling sector is not directly regulated by FATF. Yet its operating environment is shaped by FATF classifications more than by many gambling-specific rules.

FATF’s role is increasingly indirect

There are signs that FATF’s influence may increasingly be exercised through regional institutions rather than directly. Adriaansz points to the forthcoming EU AML package, due to take effect from July 2027, and the creation of the new Anti-Money Laundering Authority (AMLA) in Frankfurt.

Because the new framework is expected to align even more closely with FATF standards, operators may increasingly look to EU regulation and AMLA guidance rather than FATF publications themselves. “We expect operators to mostly look towards the EU regulation and the EU regulator (AMLA) for implementation of the framework,” he says.

That observation echoes a question raised by Lyman in Gibraltar: how FATF’s global standards will interact with Europe’s new supervisory architecture remains unclear.

Klebanow also questions whether responsibility for anti-money laundering failures is always assigned to the right institutions. “It is the role of the gaming regulator to not only promulgate rules but to truly regulate the industry,” he says. He argues that banks, customs authorities and financial intelligence systems also play critical roles in monitoring the movement of funds. He notes: “When funds appear in a casino, as in the case of the Bangladesh Bank heist, they point to lax oversight of the casino operator.”

‘Pressure applied across an entire ecosystem’

FATF’s influence, therefore, may be best understood as pressure applied across an entire financial and regulatory ecosystem rather than solely through obligations imposed on gambling companies.

The February 2026 review is a reminder that a change in FATF status can change how risky an entire jurisdiction is seen, without changing a single gambling law. For operators, that makes FATF less a distant standards body than a force that quietly determines how easily money, investment and trust move across borders.

In that sense, FATF does not regulate gambling. But it increasingly helps determine where – and how easily – gambling business can be done.