Half of Online Gambling Firms Lose 10% of Revenue to Fraud

The European online gambling (iGaming) sector is suffering multibillion-euro losses to fraud each year, according to new research from Sumsub.

The identity verification firm revealed that nearly half (47%) of the compliance professionals it asked lost over 10% of their revenue to fraud last year. Given the sector accounts for 40% (€55bn, $58bn) of the regulated European gambling market, this could amount to losses of over €5bn ($5.2bn) annually.

An additional 15% of respondents to Sumsub’s survey said they lost more than 20% of revenue to fraud last year.

Digital fraud appears to be on the rise in the sector, with 83% of respondents claiming it had grown in 2024.

The majority (76%) said fraud happens after customer onboarding, with most citing identity fraud (65%), money laundering (65%) and bonus abuse (64%) as the biggest threats to their business.

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Artificial intelligence (AI) is helping fraudsters to outwit iGaming company checks, for example via deepfake technology which can create realistic but false identification documents. Over three-quarters (78%) of compliance professionals apparently spotted a surge in AI-generated fakes over the past year. 

Additionally, AI-powered bots are used for bonus abuse, where multiple accounts are opened to exploit promotional offers like welcome bonuses and free spins. It is now one of the most popular scams in the sector.

These challenges are being compounded by outdated and ineffective fraud prevention tactics, which often rely on labor-intensive manual checks rather than automated monitoring, Sumsub claimed.

The vendor said that existing methods prevent only 54% of fraud attempts, with around a third (31%) of respondents spending more than 40 hours on fraud prevention each month.

Kris Galloway, head of iGaming product at Sumsub, urged gambling firms to step up their fraud prevention efforts.

“Fraudsters are becoming smarter, better equipped, and more capable by the day, making an annual security check-up simply insufficient to dealing with existing threats,” he added. 

“For a sector this exposed to fraud, a multi-layered strategy is the most effective defense. Security measures must be in place throughout the entire user journey, from registration to withdrawals. This includes KYC, behavioral analysis, device fingerprinting, and more.”