Artificial intelligence is making fraud increasingly difficult to detect as South Africa’s online gambling market continues to expand, according to a new report from identity verification company Sumsub.
The report found that fraud in South Africa’s iGaming sector more than tripled during the second half of 2025, despite the country’s recent progress in strengthening anti-money laundering (AML) and counter-terrorism financing controls after its removal from the Financial Action Task Force (FATF) greylist.
AI Drives More Sophisticated Fraud
Based on more than three million fraud attempts and millions of identity verification checks between 2024 and the first quarter of 2026, Sumsub identified Africa as the world’s highest-risk region for iGaming fraud, with a fraud rate of 2.54%.
Fraudsters are increasingly using AI-generated identity documents, synthetic images, and deepfake technologies to bypass traditional verification systems. Across Africa, 97% of detected fraud attempts were intercepted during biometric liveness checks, highlighting facial verification as a key defence against AI-driven attacks.
Operators Shift Beyond Traditional KYC
The growing sophistication of fraud is prompting gambling operators and financial institutions to move beyond traditional Know Your Customer (KYC) checks.
Many are adopting behavioural analytics and continuous transaction monitoring, using machine learning to identify unusual customer activity throughout the player lifecycle rather than relying solely on identity verification during account registration.
A recent BioCatch survey found that nearly three-quarters of South African banking executives consider behavioural monitoring one of the most effective tools for detecting high-risk activity.
Online Gambling Growth Raises Compliance Pressure
The rise in fraud comes as South Africa’s online gambling sector continues to grow rapidly.
According to National Treasury, gross gambling revenue reached R74.5 billion during the 2024/25 financial year, up 25.6% year over year. The South African Reserve Bank reported that online betting accounted for 85.5% of total betting revenue, up from 80.7% a year earlier.
Globally, Sumsub reported that suspicious transactions increased more than fourfold, while the average value of flagged transactions exceeded $6,500, indicating that AI-powered fraud is becoming both more frequent and more financially damaging for gambling operators.
