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Islamist terrorism has become a grave problem in Central Asia. Terrorism has grown in scope, degree and frequency since 2001 despite strong countervailing forces, such as the Shanghai Cooperation Organization (SCO). The ineffectiveness of the SCO in reducing terrorism is cause for puzzlement. The contention of this paper is that the SCO approach is not working because it fails to take into account the transnational nature of terrorism in Central Asia and the impact that this nature has on the incentives acting on each player state. Here we consider the impact of this transnational character on the player state and the terrorists in the geopolitical and motivational realms. Additionally, we will explore what further insights into the nature and boundaries of this phenomenon might be achieved by embedding it within the construct of modern game theory. Finally, the broad strokes of a policy prescription are painted in order to correct the underlying dynamic