With online gambling set to be worth $39 billion by 2016, the industry is at risk of becoming a safe haven for money laundering, according to a report published on Thursday.
Security software firm McAfee warned of the rapid growth of illegal "unlicensed" online gambling websites, which are now so prolific they are difficult for authorities to police, and where cash flow is anonymous and easy to disguise.
"The number of licensed gambling websites is simply a drop in the ocean compared with sites that are unlicensed. For every licensed online gambling site, there could be up to nine unlicensed online gambling sites," said report authors led by senior McAfee researcher, Charles McFarland.
The report quoted estimates suggesting there were 25,000 unlicensed gambling sites back in October 2011, and said there were likely to be many more by now.
"With dozens of unlicensed gambling sites being created every day, it is likely this number has increased significantly," said McFarland. "Although requiring licenses for gambling operators is an important approach, this step does nothing to halt the tide of unlicensed operators."
Gambling market research firm H2 Gambling Capital said that within three years, the global market (for unlicensed gambling sites or all gambling sites?) would grow by nearly 30 percent to $39 billion. It forecast poker sites would see the fastest growth, and said these sites offered opportunities for money laundering.
Unlicensed sites make it easier for cyber criminals to launder dirty money as player identities and locations are disguised. When used in conjunction with money-laundering tools, they can also allow customers to anonymously convert to and from virtual currencies. McAfee warned that well-known digital currency Bitcoin could offer further anonymity to cyber thieves.
McFarland suggested cross-border and cross-sector co-operation, advanced data-gathering techniques and technologies, and further training and awareness were necessary to help tackle cyber-money laundering.
So far this year, listed online gaming and gambling companies have had mixed fortunes. Online game-maker Zynga reported a first-quarter loss of $61 million this week. Shares closed over 1.5 percent lower on Thursday, although they are still almost 15 percent higher year-to-date.
In the U.K., online bookmakers have also struggled, with the likes of 888 Holdings falling 14 percent since the start of the year, and online betting site Betfair down 10 percent over the same period.