gaming industry

AML Compliance in Gaming: The Industry Actually needs it

12 de março de 2021
 |  edward kortiz

Anti-money laundering is the hiding of ill-gotten funds. This money is earned through illegal practices like drug dealings, human trafficking, or corruption. Black money can’t be used in the financial system easily because all the financial institutions demand sources of money. Money laundering is done to give illegal money a legal source so that it can be used freely in the financial system.

Criminals target those businesses that have anonymity and involve multiple financial transactions in a day. The secrecy gives ease in the placement of illegal money. Those businesses that have huge and numerous transactions in a day usually have weak verification measures. Similarly, the gaming industry is at greater risk of money laundering because it fulfills the above two requirements. The gaming industry needs its own AML compliance program like other businesses.

Money Laundering in Gaming Industry

it’s not a hypothetical case, money laundering actually happens in the gaming industry. Swedish Financial Police reports that there 700 plus money laundering cases through the gaming industry in 2020. The cases rose by 15% in 2020 as there were 614 cases in 2019. It also reports that there is under-reporting of the cases. Because there are only 70 licensed gaming companies. Only these companies helped in assembling the above statistics. The other non-registered gaming business might have a higher number of money laundering activities.

There are two ways of money laundering in the gaming industry:


These are the payments that are used for in-game purchases. The payment range can be cents to thousand dollars. It is very common in mobile games where gamers purchase skins, gaming environments, and weapons. The payment gateway for microtransactions is not much secure and does not have any history. A criminal can use a game and can launder his money through money mules. He can deposit his money by multiple micro-transactions and can withdraw it in another state smoothly.

In-Game Currencies

These are the virtual currencies used in gaming platforms for in-game purchases or competitions. These are usually obtained by winning games or completing challenges. Then these funds are transferred to digital wallets. In-game currencies have a much higher amount in sale-purchase of accounts

AML Compliance

It is the set of policies, laws, and practices that a business adopts to prevent its channels from being used for money laundering. All the businesses have an internal AML compliance program which is developed under the directives of law enforcement agencies. Every state differs in AML laws and directives. The USA has FinCEN and the UK has FCA as a financial law enforcing authority. An AML compliance program serves as the foundation of its flourishment.

A solid Anti-money laundering compliance consists of five pillars given below:

  1. AML Compliance Officer

A person or a department who oversees the latest AML directives and guidelines of local and global authorities. He is responsible for implementing AML policies in the company. Advanced money laundering tactics are also observed by AML compliance officers.

  1. Written and Clear Anti-Money Laundering Policy

Clearly state what is money laundering and anti-money laundering policies according to the type of business.

  1. Ongoing AML Training

The employees are trained about money laundering efforts, how to detect and report suspicious activities. Normally AML compliance officer conducts the ongoing AML training

  1. Independent Audits

Not only internal but third-party audits are necessary. Through this, a business can have a better overview of AML efforts. It helps in better future decision-making. The management of the business

  1. Customer and Enhanced Due Diligence (CDD & EDD)

The identity of the customer is confirmed for the mitigation of identity fraud. Later he is screened through Politically Exposed Persons (PEPs) lists. And If found the authorities are informed about this.

Summing it Up

Although all the above AML steps cannot be applied to the gaming industry, customer due diligence can be implemented. The secrecy of players or criminals can be revealed. All the players and participants should be verified by the Customer Identification Program. This will prevent imposters’ involvement in gaming platforms. After verification, they should be screened through PEPs. Continuous AML monitoring and background checks should be done for securing the gaming industry from money laundering.

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