2025 iGaming fraud prevention guide: trends, types, and regulations

Introduction: The rising threat of online gambling fraud

Online gambling fraud is a growing concern for online gambling operators, regulators, and players. With increasing digitalization, fraudsters exploit vulnerabilities in identity verification, bonus offers, transaction monitoring, and account takeover to commit financial crimes. 

This blog explores the latest fraud trends, regional insights, regulatory requirements, and best practices for iGaming operators to enhance security and compliance.

The growing challenge of iGaming fraud in 2025

According to the Veriff Identity Fraud Report 2025, an iGaming experienced a significant surge in physical adversary-in-the-middle attacks in 2024. These attacks have become a key enabler for fraud tactics such as multi-accounting, identity farming, and account takeover, particularly in response to the industry’s use of sign-up and bonus incentives. With lucrative rewards at stake, fraudsters exploit these vulnerabilities to gain financial advantage. Addressing these sophisticated threats requires advanced security measures to protect platforms and maintain user trust.

As fraud tactics evolve, so does the iGaming industry itself. The market size of the online gambling industry in the United States has experienced significant growth from 2017 to 2023, with projections indicating continued expansion through 2029. Starting at just $1.28 billion in 2017, the market has steadily increased, reaching $19.54 billion in 2023, representing a 39% increase from 2022. Forecasts suggest this upward trend will persist, with the industry expected to grow to $39.82 billion by 2029. The growth is driven by the increasing popularity of online casinos, digital lotteries, and sports betting, reflecting broader trends in digital entertainment and regulatory advancements in online gambling across various states. If these projections hold, the U.S. online gambling industry will more than double in size within the next six years.

Key iGaming fraud trends by region based on Veriff Identity Fraud Report 2025

United States

The US shows a concerning trend, with a significant increase in fraud attempts in the video gaming industry (11.7% YoY increase). This suggests potential tactics include identity theft to create fake accounts, bonus abuse through exploiting promotions or in-game rewards, and potentially money laundering via in-game transactions or virtual item trading.

United Kingdom

Despite seeing a decrease in net fraud rate (3.97% in 2024 vs 4.55% in 2023), the region remains prone to identity fraud. We witness identity theft attempts for fraudulent account creation, money laundering through the anonymity of online gaming platforms and in-game transactions, and various cyber threats like account takeovers and phishing attacks targeting gamers.

Latin America (LATAM)

The consistently high fraud rate (6.48% in 2024) points toward prevalent identity theft for creating accounts and making fraudulent purchases, bonus abuse by exploiting new account sign-up incentives and other promotions, and potentially money laundering through in-game transactions or virtual item trading.

Types of iGaming fraud and their impact

1. Identity fraud

Fraudsters use deepfake technology to create synthetic identities, bypassing KYC and AML checks. These fake accounts exploit promotional bonuses and enable multi-accounting fraud. Additionally, fraudulent behaviors like multi-accounting and identity theft can exploit gambling accounts to manipulate bonuses, launder money, or conduct chargeback fraud, highlighting the importance of strict verification measures to protect these accounts from fraudsters.

Prevention strategy: Implement biometric authentication, age validation, and age estimation solutions.

2. Money laundering

Online casinos and sportsbooks are often misused for illicit fund transfers through high-value bets and structured withdrawals.

Prevention strategy: Enforce transaction monitoring, risk-based AML protocols, and "ensure compliance with applicable local AML laws and regulations, while having regard to international guidelines and recommendations"

3. Bonus Abuse

Fraudsters exploit welcome bonuses by creating multiple fake accounts. VPNs and Tor browsers further conceal their activities, making detection harder. This type of exploitation is known as bonus abuse fraud, where strategies like 'bonus hunting' are used to manipulate promotional offers.

Prevention strategy: Deploy device fingerprinting and IP analysis to detect suspicious behavior.

Regulatory frameworks for iGaming fraud prevention

A recent September 2024 Statista poll reveals that nearly half of U.S. adults (47%) believe the gambling industry should face stricter regulations, with 25% supporting much stronger regulation and 22% favoring somewhat more regulation. Meanwhile, 27% of respondents are satisfied with the current level of regulation and do not see a need for change. A smaller portion of the population, 14%, advocates for less regulation, with 6% supporting much less regulation and 8% preferring somewhat less oversight. Interestingly, 12% of respondents remain uncertain whether gambling regulations should be adjusted. These findings highlight the ongoing debate over gambling laws in the U.S., where concerns about consumer protection, responsible gaming, and industry transparency continue to shape public opinion and regulatory discussions.

United States

• Unlawful Internet Gambling Enforcement Act (UIGEA): Regulates financial transactions linked to online gambling.
• Bank Secrecy Act (BSA) & FinCEN AML Compliance: Requires stringent KYC and AML measures for operators.

United Kingdom

• UK Gambling Act 2005: Governs responsible gaming and fraud prevention.
• Proceeds of Crime Act 2002 (POCA): Enforces AML compliance for gambling operators.
• UK Online Safety Act 2023: Addresses fraud risks in online platforms, including gaming.

Latin America

• Brazil’s Law No. 14,790/2023: Regulates online gaming and mandates identity verification.
• Mexico’s Gaming & Raffles Law: Implements fraud measures for iGaming operators.

How Veriff strengthens iGaming fraud prevention

Case Study: How Veriff partnered with EasyGo / Stake 

Stake is an online gaming and sports betting platform operating globally in 15 languages. In 2024, Stake approached Veriff with a challenge to support their global expansion, with a strong focus on Stake Brazil, their third-largest market.

Veriff partnered with EasyGo / Stake, a leading online gaming and betting platform, to enhance its identity verification (IDV) processes and ensure compliance with stringent regulatory requirements. With a global user base and high transaction volumes, Stake needed a seamless yet robust verification system to prevent fraud, streamline onboarding, and meet evolving compliance demands. By integrating Veriff’s AI-driven IDV solution, Stake significantly reduced verification times, improved pass rates, and strengthened fraud prevention measures. This partnership enabled Stake to deliver a smoother user experience while maintaining high-security standards, strengthening trust among its players and regulators alike.

Why operators trust Veriff for iGaming security

Automate and scale your operations while expanding in both emerging and established markets with confidence. Veriff’s industry-leading identity verification and fraud prevention solutions are designed to build trust online, ensuring a seamless and secure user experience across various industries. Our superior document coverage, encompassing over 12,000 document specimens from 230+ countries and territories in 48 languages and dialects, enables fast and reliable onboarding while supporting regulatory compliance.

Veriff’s key Identity Verification solutions:

• Veriff’s Document and Identity Verification solution provides fast and accurate user authentication, reducing fraud risks and maintaining high conversion rates.
• Utilizing Fraud Protect and Fraud Intelligence, Veriff adapts to evolving fraud tactics, including deepfake detection and synthetic identity fraud prevention.

Age Validation & Compliance

• Veriff’s Age Validation solution combines document verification with device and behavioral analytics to prevent unauthorized access and ensure compliance with age restrictions across gaming, social media, and eCommerce platforms.
• Age Estimation leverages facial biometric analysis to determine a user’s age, even when identity documents are not available.

AML Screening & Risk mitigation

• Veriff’s AML Screening solution automates Politically Exposed Persons (PEP) and sanctions list checks, ensuring businesses comply with anti-money laundering regulations.
• Ongoing monitoring for adverse media and high-risk individuals enhances risk mitigation strategies.

Proof of Address & Data Verification

• Veriff’s Proof of Address solution integrates trusted data sources to verify customer addresses, ensuring businesses meet KYC and regulatory standards.
• Data Verification enables real-time validation against government databases, such as US SSN, Mexico INE/CURP, providing an additional layer of authentication.

Learn how Veriff securely processes personal data to ensure privacy, compliance, and seamless identity verification:

Why Veriff?

High accuracy & fraud prevention

Reduce false positives and improve fraud detection with advanced AI-powered checks and network-wide fraud insights.

Seamless user experience

Optimized verification flow ensures high first-pass approval rates, improving conversion while reducing friction.

Global coverage & compliance

Meet regulatory requirements across multiple jurisdictions with customizable IDV, AML, and KYC solutions.

Scalability & growth

Veriff’s automation-first cloud-based solutions offer flexibility, easy API integration, and seamless adaptation to market conditions.

Together, these solutions empower businesses to build trust, mitigate fraud, and create a secure digital environment for their customers.

Conclusion: The future of iGaming fraud prevention

As fraudsters evolve, iGaming operators must adopt AI-driven fraud detection, robust KYC processes, and regulatory compliance measures. With Veriff’s expertise, online gaming platforms can protect players, ensure compliance, and enhance trust in the industry.

Want to safeguard your iGaming platform? Contact Veriff today for cutting-edge fraud prevention solutions.