Unveiling the Financial Losses in European iGaming
Over four out of ten iGaming businesses in Europe experienced a revenue decrease of 10% due to fraudulent activities in the year 2024.
A new study by identity-verification firm Sumsub showcases the staggering financial losses confronting the European online gambling sector, potentially totaling over $5.2 billion per year.
The Extent of Revenue Drain
Half of the compliance professionals polled in the survey reported losing more than 10% of their revenue to fraud last year, which could equate to losses of over $5.2b on an annual basis for the sector, making up 40% ($58bn) of the regulated European gambling market. Shockingly, another 15% admitted to lose more than 20% of their revenue due to fraud in 2024.
Types of Deception
iGaming's dynamism in combating fraudsters unfortunately pales in comparison to the evolving methods and sophistication of fraudsters. The crux of deception includes digital fraud, often occurring during customer onboarding, with identity fraud (65%), money laundering (65%), and bonus abuse (64%) being the leading sources of fraud for the online gaming sector.
To further complicate matters, criminal minds utilize deepfake technology to manufacture almost undetectable false identification documents. Startlingly, three-quarters (78%) of compliance professionals reported witnessing a hike in AI-generated fakes in 2024, making it increasingly difficult for them to stomp out fraud before it occurs.
Addressing the Crisis
Beleaguered by the persistent challenge of defending against deception, the European iGaming sector will undoubtedly need to overhaul its ineffective fraud prevention tactics. Sumsub advocates replacing labor-intensive manual checks with automated monitoring. Regrettably, manual checks only thwart around 54% of fraud attempts, and approximately 31% of fraud professionals spend over 40 hours a month grappling with fraud prevention.
Kris Galloway, Head of iGaming product at Sumsub, emphasized the need for a multi-layered approach to bolster defense against fraud, asserting that security measures should be in place throughout the entire user journey, from registration to withdrawals, encompassing KYC, behavioral analysis, device fingerprinting, and more.
- Fraudsters continue to pose significant threats to the iGaming industry, with half of the compliance professionals reporting losses of more than 10% of their revenue due to fraud last year, equating to $5.2 billion in annual losses for the sector.
- Identity fraud, money laundering, and bonus abuse are the leading sources of fraud in the online gaming sector, while fraudsters also employ advanced technology such as deepfake technology to bypass detection mechanisms.
- The European iGaming sector needs to revamp its ineffective fraud prevention tactics, with automated monitoring being advocated as a replacement for labor-intensive manual checks that only thwart around 54% of fraud attempts.
- Kris Galloway, Head of iGaming product at Sumsub, urged a multi-layered approach to strengthen defense against fraud, emphasizing the importance of security measures that should be in place throughout the entire user journey, from registration to withdrawals, encompassing KYC, behavioral analysis, device fingerprinting, and more.
