In 2024, Ilya Brovin of Sumsub shares strategies for combatting gambling fraud

The online gambling industry is booming, with an expected annual growth rate of 7.76% and a projected revenue of $138.1 billion in 2028. However, this rapid growth has also led to an increase in fraud cases, leaving gaming operators struggling to cope with the challenges.

One of the most common types of fraud in the gambling space is bonus abuse, which accounts for over 50% of all fraud cases. Affiliate fraud is another prevalent issue in the industry. In addition to these traditional forms of fraud, deepfakes have emerged as a rising concern, with the number of deepfakes globally increasing by 10x in 2023 compared to 2022. iGaming specifically saw the third most deepfake cases, following crypto and fintech.

When organizations fall victim to scams, it not only impacts their financial stability and reputation but also affects how players perceive the company. Damage to a reputation is not short-term and can have long-lasting effects. The digitized nature of the industry, potential for significant financial gain, and ongoing regulatory challenges create vulnerabilities that operators are struggling to handle.

To address these challenges, regulators are focusing on compliance and imposing heavy fines for violations of anti-money laundering and responsible gaming requirements. Know Your Customer (KYC) has become increasingly important in verifying the identity of new players and preventing fraud and money laundering.

While KYC checks are typically carried out once funds are withdrawn in iGaming, the majority of gaming fraud occurs before the KYC stage, making fraud prevention crucial. Gaming platforms are being encouraged to work with solutions specifically designed for the industry to establish customizable rules to prevent suspicious activity, flag unusual behavioral patterns, and detect potential addictions to ensure compliance with responsible gaming requirements.

Operators are also urged to get ahead of regulations by proactively seeking opportunities to remain compliant and secure. The American Gaming Association is one group promoting responsible gaming and player protection, with the goal of preventing significant fines or license revocation for gaming platforms.

In order to uphold reputability within the industry and among players, operators are advised to consider technological advancements to help them remain compliant in the face of changing regulations. This may include implementing comprehensive solutions or products developed internally, all from a single vendor, to ensure secure online gaming and reduce integration or data transfer issues.

Ultimately, as the industry continues to expand globally, operators and platforms need to know they are protected at all steps of the user journey to maximize revenue, remain compliant, and reduce fraud, all while cutting costs. The hope is that 2024 will see a reduction in fraud for the industry as a result of these efforts.