New research
New survey research by identity-verification firm Sumsub has revealed that the European iGaming sector was exposed to multibillion-euro losses last year.
could account for losses of over $5.2b annually
Sumsub’s research exposed the losses of the gambling sector. Nearly half (47%) of the compliance professionals surveyed responded that they had lost over 10% of their revenue to fraud last year. That could account for losses of over $5.2b annually, with the sector representing 40% ($58bn) of the regulated European gambling market.
Think losing 10% of their revenue sounds like a lot? Another 15% of respondents to Sumsub’s survey said that fraud claimed more than 20% of their revenue in 2024.
Types of fraud
The sources of fraud include digital fraud, with the main issue occuring during customer onboarding. Identity fraud (65%), money laundering (65%), and bonus abuse (64%) are the largest sources of fraud for the iGaming sector.
Though iGaming incorporates company checks to outwit fraudsters, those same criminals are now using deepfake technology to create nearly undetectable false identification documents. Three-quarters (78%) of compliance professionals reported spotting a surge in AI-generated fakes over 2024, but it has become harder and harder for those professionals to spot the fakes before the crime has occurred.
Updating fraud checks
Unfortunately, the iGaming sector’s challenge to defend itself against fraud means it will need to substantially update its ineffective fraud prevention tactics. Sumsub claims that the sector will be most benefited by replacing labor-intensive manual checks with automated monitoring. Reports indicate that manual checks only prevent around 54% of fraud attempts, with approximately 31% of fraud professionals spending over 40 hours a month of fraud prevention.
Fraudsters are becoming smarter, better equipped, and more capable”
Kris Galloway, Head of iGaming product at Sumsub, said: “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. 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.”