The European online gambling sector is experiencing significant financial losses due to fraud, according to recent research from identity verification firm Sumsub. Nearly half of the compliance professionals surveyed reported losing more than 10% of their revenue to fraud in 2024, which, given the €55bn ($58bn) size of the regulated European market, suggests annual losses could exceed €5bn ($5.2bn). Additionally, 15% of respondents stated that fraud accounted for more than 20% of their revenue, underscoring the growing challenge within the industry. The increase in digital fraud was especially notable, with 83% of respondents claiming that fraudulent activities had risen during the year.
The survey highlighted that most fraud occurs after customer onboarding, with identity fraud, money laundering, and bonus abuse being the primary threats.
Fraudsters are using increasingly sophisticated tactics, including deepfake technology to create realistic yet fake identification documents. Additionally, AI-powered bots are enabling bonus abuse, where multiple accounts are created to exploit promotional offers, such as free spins and welcome bonuses, making it one of the most prevalent scams in the sector.
Sumsub’s research also pointed out that existing fraud prevention tactics are not keeping pace with these emerging threats.
Most companies still rely on outdated, labor-intensive manual checks, which are proving insufficient to tackle the sophisticated nature of fraud in the iGaming sector. According to Sumsub, these current methods only prevent 54% of fraud attempts, and around a third of the respondents spend more than 40 hours each month on fraud prevention. This inefficiency suggests that many companies are not fully equipped to deal with the scale of the problem.
Kris Galloway, Head of iGaming Product at Sumsub, emphasized the need for a more robust and multi-layered approach to fraud prevention. He urged iGaming firms to adopt security measures throughout the entire user journey, from registration to withdrawals. This includes strategies like Know Your Customer (KYC), behavioral analysis, and device fingerprinting, which can provide better protection against the growing threat of fraud, particularly in a sector that is becoming increasingly exposed to AI-driven scams.
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