Are Fentanyl Traffickers Using iGaming to Launder Money in Canada and the US?

This emerging threat has prompted coordinated responses from financial intelligence units across Canada, the United States, and Mexico, representing a significant evolution in how criminal organizations are adapting to exploit digital financial systems.

The Evidence: What Intelligence Agencies Have Found

Canada's FINTRAC Findings

In January 2025, Canada's Financial Transactions and Reports Analysis Centre (FINTRAC) issued a groundbreaking operational alert based on analysis of approximately 5,000 suspicious transaction reports related to fentanyl and synthetic opioids that were filed between 2020 and 2023.

The findings were stark: known fentanyl traffickers frequently sent funds received from multiple incoming email money transfers to gambling sites and received payments in return from associated payment processors based in Malta, Canada and the United Kingdom.

The intelligence revealed a sophisticated scheme where individuals are depositing and withdrawing funds at online casinos, using these platforms to disguise proceeds from fentanyl and opioid trafficking as wagers and winnings from online gambling. FINTRAC provided a specific example where an individual received a few hundred high-value email money transfers from a payment processor closely aligned with online gambling, followed by similar outgoing transfers to gambling sites.

US FinCEN Data and Analysis

The scale of fentanyl-related money laundering in the United States is staggering. According to FinCEN's latest analysis, between January and December 2024, financial institutions filed 1,246 BSA reports that identified suspected fentanyl-related activity amounting to approximately $1.4 billion in suspicious transactions. While FinCEN's recent advisories focus primarily on precursor chemical procurement, the agency has acknowledged the trilateral cooperation with Canada and Mexico in developing indicators for fentanyl-related money laundering.

International Cooperation and Scope

This investigation represents unprecedented international cooperation through the North American Drug Dialogue Illicit Financing Working Group to develop money laundering indicators related to the importation, production and distribution of illegal synthetic opioids, involving FINTRAC, FinCEN, and Mexico's Unidad de Inteligencia Financiera.

How the Laundering Scheme Works

The Technical Process

The money laundering scheme exploits weaknesses in payment processing systems. Payment processors send email money transfers on behalf of individuals who deposit and withdraw funds from online casinos. The transactions appear as an e-transfer from the processor rather than as a transfer from the online gambling platform, effectively disguising the true nature of the transaction from financial institutions.

FINTRAC noted that these processors are designed to bypass a possible rejection of transactions from financial institutions due to their association with online casinos, creating a layer of obfuscation that helps criminals avoid detection.

Red Flags and Indicators

FINTRAC has identified specific indicators of this activity, including a client making high-volume or frequent purchases from a personal account to online gambling platforms and subsequently receiving funds into the same account from payment processors associated with online gambling platforms as an unusual pattern warranting investigation.

The Broader Context: Why Online Gambling Appeals to Criminals

Increased Vulnerabilities in Digital Gambling

The proliferation of online gambling since COVID-19 has created new opportunities for money laundering. gambling emerged as one of the top three sectors that incurred the highest amount of anti-money laundering (AML) fines in 2023 – racking up over $475 million in penalties.

Online gambling presents various different types of money laundering risks due to one aspect in particular: increased levels of anonymity. Unlike traditional casinos requiring face-to-face interactions, online platforms allow users to gamble with minimal personal information. Criminals often exploit this by using stolen credit cards, fake identities, or cryptocurrencies to place bets and withdraw their "winnings".

Academic and Expert Analysis

Research has shown that Australian casinos were used to launder the proceeds of illegal drug trafficking and to facilitate Chinese capital flight, demonstrating that the nexus between casinos and drug trafficking is not limited to North America. The connection between organized crime and gambling venues has been documented globally, with drug traffickers and organized crime gangs often used casinos to "snow wash" money gained via illegal activities in British Columbia, Canada.

Regulatory and Law Enforcement Response

United States Legislative Action

The U.S. Congress has responded with targeted legislation. The Stop Fentanyl Money Laundering Act of 2023 allows the Department of the Treasury to impose restrictions on an entity or activity determined to be of primary money-laundering concern in connection with illicit fentanyl and narcotics trafficking.

The legislation specifically requires that FinCEN must issue advisories to financial institutions about how to identify Chinese money laundering that facilitates the trafficking of fentanyl and other synthetic opioids.

Recent Treasury Actions

In January 2025, Treasury took historic action by issuing orders identifying three Mexico-based financial institutions—CIBanco S.A., Intercam Banco S.A., and Vector Casa de Bolsa, S.A. de C.V.—as being of primary money laundering concern in connection with illicit opioid trafficking. These actions demonstrate the continuing evolution of enforcement efforts targeting financial facilitators of fentanyl trafficking.

FinCEN's Enhanced Focus

FinCEN has significantly expanded its focus on fentanyl-related money laundering through initiatives like the Promoting Regional Outreach to Educate Communities on the Threat of Fentanyl (PROTECT) series of FinCEN Exchange sessions, working directly with regional financial institutions to improve detection and reporting.

International Frameworks and Standards

FATF Leadership

The Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering, has made fentanyl a priority. The FATF adopted a U.S.-led report on money laundering related to the illicit trafficking of synthetic opioids, including fentanyl, marking the first such comprehensive international assessment.

Organised crime groups use a range of methods including bulk cash smuggling, cash couriers, trade-based money laundering and virtual assets (crypto), as well as shell companies and the services of professional money launderers to process fentanyl proceeds, according to FATF analysis.

The Scale of the Global Problem

The global scope is enormous: the illegal gambling market is worth a staggering USD 1.7 trillion globally, according to research by the Asian Racing Federation, and is closely tied to other criminal enterprises. Recent international operations have demonstrated these connections, with Operation SOGA X investigations leading to the rescue of trafficked workers and the exposure of money laundering syndicates.

Methods and Sophistication of Criminal Operations

Digital Evolution

The sophistication of modern money laundering schemes extends beyond traditional methods. Multiple deposits and multiple accounts allow criminals to theoretically launder money far faster than ever before through online platforms.

Criminals employ various techniques including:

• Smurfing – large sums of money are broken down into smaller transactions – small bets – to evade financial crime detection software
• Multi-accounting – whereby every 'player' at the table, win or lose, is laundering the money in their accounts
• Transfers – whereby a player transfers money to another player, which is often immediately withdrawn to an offline account

Integration with Broader Criminal Networks

The connection between fentanyl trafficking and gambling-based money laundering is part of a larger ecosystem. Illegal gambling fuels human trafficking, money laundering and fraud, creating intersecting criminal enterprises that amplify the harm to society.

Industry Impact and Compliance Challenges

Financial Institution Obligations

In the United States, FinCEN expects online casinos to have the same robust Bank Secrecy Act (BSA) and AML programs as traditional brick-and-mortar casinos. The regulatory framework requires comprehensive monitoring and reporting of suspicious activities.

FinCEN issued its first government-wide priorities for AML and countering the financing of terrorism (CFT) policy pursuant to Section 5318(h)(4)(A) of the BSA, establishing eight national priorities that online gambling establishments must incorporate into their compliance programs.

Enforcement Trends

The enforcement landscape shows increasing focus on gambling-related money laundering. European countries issued a combined €314m in fines in 2023 for gambling-related AML violations, while the Asian gambling industry was fined a total of $475m for anti-money laundering (AML), the third highest after banking and cryptocurrency.

Challenges in Detection and Prevention

Technical Complexity

The sophistication of payment processing systems creates detection challenges. Gaming deposits originating from cryptocurrency and the use of multiple substantial deposits or withdrawals within a short time complicate traditional monitoring approaches.

Data Limitations

Despite increased reporting requirements, the data is tantalizingly broad brush and often insufficient for comprehensive analysis. In the UK, only 6,352 SARs were made by the gaming/leisure sector, accounting for 0.7 percent of the total suspicious activity reports, raising questions about the true scope of unreported activity.

Future Outlook and Recommendations

Enhanced International Cooperation

The success of the trilateral North American approach suggests the need for expanded international cooperation. The FATF recommends law enforcement and other operational authorities implement better coordination and information sharing on the methods used to launder the illicit proceeds from the emerging drug trade.

Technology and Detection

The private sector should be aware of the risks of new technologies (including dark web marketplaces and digital assets) to launder the proceeds of drug trafficking and take appropriate measures to deny criminals access to these systems.

Training and Capacity Building

Prosecutors and law enforcement authorities, including those with an extensive background in financial investigations, need additional training on investigations into the financial elements of the precursor supply chain.

The Evidence is Clear...

Fentanyl traffickers are successfully exploiting iGaming platforms to launder illicit proceeds in both Canada and the United States. This represents a significant evolution in criminal financial methodology, leveraging the anonymity and technical complexity of online gambling to disguise drug trafficking proceeds.

The response from financial intelligence agencies demonstrates recognition of this threat, with FINTRAC's analysis of approximately 5,000 suspicious transaction reports providing concrete evidence of systematic abuse. The $1.4 billion in suspicious fentanyl-related transactions identified in 2024 in the United States alone underscores the massive scale of the problem.

Moving forward, the success of anti-money laundering efforts will depend on continued international cooperation, enhanced technology for detection, improved industry compliance, and the development of more sophisticated analytical capabilities to track these evolving criminal methodologies. The integration of fentanyl trafficking with online gambling represents not just a financial crime challenge, but a critical component of the broader public health crisis caused by synthetic opioids.

As Under Secretary Brian Nelson noted, "Combatting this scourge is a top priority of the Biden-Harris administration, and Treasury plays an important role in the whole-of-government response", indicating that this issue will remain at the forefront of North American law enforcement and regulatory priorities.