The development of artificial intelligence (AI) makes it more difficult for businesses across the globe to identify potential fraud attempts. While weeding out bad actors remains a challenge for many sectors, the gambling industry isn’t spared.
47% of Online Gambling Companies Lose 10% of Their Annual Revenue to Fraud
Online gambling operators across the globe are constantly on the lookout, trying to prevent malicious attempts such as fraud and identity theft. Such unlawful actions can often result in big losses and in some cases, put the operation of iGaming companies at risk, considering that fraudulent attempts can be tied to money laundering and other crimes.
Now, a newly released report warns about the impact of fraud on iGaming companies. Data from the leading identity verification company, Sumsub, quoted by Infosecurity Magazine, uncovers that billions are lost every year by online gambling companies to fraud. Close to half or 47% of the online gambling companies in Europe have lost more than 10% of their revenue to fraud in 2024.
Considering that the European iGaming sector is evaluated at $58 billion annually, this translates to losses of more than $5 billion every year. What’s even more concerning is that another 15% of the respondents in Sumsub’s research admitted that they lost more than 20% of their revenue to fraudulent activities in 2024.
According to the respondents of Sumsub’s survey, in 2024, digital fraud in iGaming has increased. That was the opinion of 83% of the respondents with an overwhelming majority of 76% admitting that fraud occurs after a customer is onboarded. When it comes to challenges, 65% identified money laundering and the same percentage recognized identity fraud as major threats to their respective companies. Separately, 64% of the iGaming companies recognized the danger of bonus abuse.
Undoubtedly, the results sound the alarm about the impact of fraud on iGaming and the need for additional robust solutions, likely on an European level, to combat such crimes and protect the legal gambling sector.
Fraudsters Use AI and Deepfake Technology
In a separate Sumsub report, the recognizable company analyzed more than 1 million fraud attempts within the iGaming sector from 224 countries and territories. Concerningly, the report uncovered that the use of deep-fake data and information between 2022 and 2023 marked a tenfold increase.
The use of AI helped facilitate the fabrication of fraudulent documents and per that report, in Q1 2024, 1.7% of the fraud attempts were tied to an ID card, 1.6% were connected to fraudulent passports and 1.4% to residence permits. When it comes to the most popular iGaming fraud, Sumsub said that 69.9% of the reports in 2023 were tied to bonus abuse, while 9.9% of the fraud cases were tied to money laundering.
