Anti-Fraud Compliance and UX in iGaming: Getting the Balance Right in 2025

The iGaming industry is booming, with the global online gambling market projected to reach USD 153.57 billion by 2030. As the market attracts more players—and, as a result, more fraudsters—it faces greater regulatory pressure. Competition is also intense, as operators are trying to prevent fraud and meet compliance obligations without frustrating players.

This puts considerable stress on operators to provide a smooth and engaging user experience while meeting KYC and AML requirements and keeping fraud at bay. Not having effective procedures in place exposes operators to escalating rates of fraud and heavy regulatory penalties—global fines in the gambling industry totaled $184.4 million in 2024 alone. At the same time too much friction can cause players to get frustrated and drop off, potentially costing millions in lost revenue. 

To understand how operators can find the right balance and seize the opportunities of this rapidly expanding market, our ‘State of Identity Verification in the iGaming Industry 2025’ report has drawn on analysis of millions of global fraud attempts and insights from leading experts. In this article, we explore the report’s key findings and how iGaming operators can use them to their advantage.

How AI is changing iGaming fraud

Fraud is increasingly becoming a cause for alarm in iGaming. According to our latest report, the fraud rate has doubled since 2023, with AI allowing fraudsters to exploit key vulnerabilities.

Bad actors are weaponizing AI to forge documents, generate lifelike deepfakes to bypass, and construct convincing synthetic identities at scale with minimal effort. AI also allows for the coordination of organized attack networks designed to bypass even advanced defenses.

We found iGaming operators identify the biggest fraud threats as:

1. Identity fraud
2. Money laundering 
3. Bonus abuse

As criminals evolve their tactics, regulators are raising their expectations in a game of cat and mouse. This inevitably means more compliance demands for operators. If implemented poorly, more rigorous KYC checks can lead to customer drop-offs, penalties, or reputational harm.

Suggested read: AML Casino Compliance and Responsible Gambling Standards: Global Guide 2025

More iGaming, more fraud, and more regulatory pressure

As the iGaming industry grows, fraud and regulatory pressure on operators are intensifying. This has become particularly evident in Latin America. With Brazil’s newly regulated online gambling and betting market, the region is seeing a surge in both legitimate operators and criminals trying to seize new opportunities. 

Fraudsters have been quick to exploit regulatory gaps by weaponizing AI, explaining why deepfake fraud rates in Brazil are ten times higher than in Germany. Latin America is now experiencing over 30% year-on-year fraud growth, driven largely by Brazil’s regulatory shift. 

Tighter regulations are also a global trend, with regulators continuously adding new requirements, raising penalties for non-compliance, taking more enforcement actions, demanding more sophisticated verification measures with biometrics and liveness checks, and using AI-driven transaction monitoring. Operators also need to stay conscious of responsible gambling and advertising standards in every jurisdiction where they operate. 

Businesses that fail to adapt to these demanding standards not only risk fraud-related losses but also compliance penalties.

Key iGaming fraud trends in 2025

iGaming fraud is on the rise and putting operators under unprecedented pressure. We’ve found:

• 82.9% of operators have noticed increases in fraud
• Nearly a third of operators estimate fraud costs them 10–20% of their annual revenue
• 76% of fraud occurs post-KYC, meaning anti-fraud processes need to continue long after onboarding.

Among the most pressing fraud trends are:

• Money mules laundering funds through gambling accounts that appear legitimate
• Deepfake and synthetic identity fraud, with AI-generated forgeries able to bypass some verification checks
• Deposit and onboarding attacks, with fraudsters targeting the earliest stages of the customer journey, typically during off-peak hours when defenses are weakest;
• Organized attack networks, with AI and automation helping bad actors scale operations across multiple platforms with ease.

But the good news is that there are solutions making it easier than ever to comply with regulations and combat fraud with minimal user frustration. Not only has the global verification pass rate risen from 78.58% in 2023 to 88.25% in 2025, iGaming verification is now, on average, seven seconds faster. This is proof that operators can have strong compliance standards without sacrificing user experience.

Fraudsters may be innovating, but so are the most successful iGaming operators. To reduce risks and keep players engaged, it is best to integrate AI-driven technologies, device fingerprinting, behavioral analysis, and transaction monitoring throughout the player lifecycle.

The iGaming industry is facing a perfect storm of compliance pressure, rapidly evolving fraud tactics, and rising customer expectations. The operators who survive will be those who transform verification from a necessary evil into a competitive advantage.

Kris Galloway

Head of iGaming Product at Sumsub

Suggested read: Ask Sumsubers: How are global iGaming regulations expected to change in 2025 and beyond?

How can iGaming operators balance fraud prevention, compliance and player experience in 2025?

Proactive operators are showing that it’s not only possible to balance fraud prevention, compliance and player experience, but also to thrive while doing it. Industry leaders in iGaming are investing in compliance automation, intelligent technologies, and smooth processes that safeguard platforms while keeping users engaged. Some of the best practices include:

• Reusable digital identities: By allowing players to validate their identity once and use it across platforms, solutions like Sumsub ID reduce friction and cut onboarding times.
• Compliance automation: Successful operators invest in automated processes that minimize effort, reduce errors, and ensure instant compliance with evolving regulatory requirements. 
• Dynamic risk assessment: Leading platforms constantly adjust verification based on behavior and new insights to stay ahead of evolving risks.
• Continuous anti-fraud updates: Regular anti-fraud model updates ensure operators are able to identify emerging fraud trends before they have a chance to cause harm.

The full ‘State of Identity Verification in the iGaming Industry 2025’ report provides exclusive industry insights and analysis. Check it out to learn:

• The stage when most fraud occurs in iGaming
• Key regulatory trends and expert insights
• Practical verification recommendations
• Essential steps to safeguard your iGaming business in 2025