AI-powered fraud is becoming a growing challenge for the iGaming industry, with new research from identity verification provider Sumsub showing a sharp increase in suspicious activity over the past year.
Suspicious transaction volumes increased 4.5 times between early 2025 and early 2026, while the average value of flagged transactions rose from around US$4,000 to approximately US$6,500. The findings suggest fraudsters are increasingly targeting higher-value accounts and payments.
Fraudulent identity verification attempts also climbed, accounting for 1.53% of all verification checks in the first quarter of 2026—an 18% increase from a year earlier.
AI Makes Fraud Harder to Detect
Artificial intelligence is enabling criminals to generate convincing fake identities, forged government documents, and realistic facial images at scale.
The report found that fraudulent users spend significantly more time completing verification than legitimate customers, often testing multiple identities and document variations before submitting applications. This patient approach, combined with AI-generated content, makes fraudulent activity more difficult for automated verification systems to detect.
Regional Trends Vary
Fraud patterns differ across global markets.
Africa recorded the highest fraud rates, while North America reported the lowest. However, the report noted that fraud in mature markets often involves more sophisticated techniques, including deepfakes and synthetic identities, making detection increasingly challenging.
Europe has seen relatively stable fraud levels, while Latin America experienced a rise in fake proof-of-address documents used during customer verification.
Stronger Security Needed
The findings highlight the growing limitations of relying solely on identity verification during account registration.
As AI-driven fraud becomes more advanced, operators are increasingly adopting layered security strategies that continuously monitor player behavior throughout the customer lifecycle, helping identify suspicious activity beyond the initial onboarding process.
