Online Gambling Braces for a New Era of AI-Powered Fraud

The fight between online gambling operators and fraudsters is escalating into what many in the industry now describe as an arms race. What once revolved around fake IDs or doctored selfies has shifted to a far more complex battlefield shaped by generative artificial intelligence and increasingly sophisticated cyberattacks. Operators that neglect to update their systems may become increasingly vulnerable to potential fraud.

Malicious Actors Often Use AI Tools to Bypass ID Checks

A recent report by news outlet GGRAsia shared the insights of Ofer Friedman, chief business development officer at AU10TIX, an Amsterdam-based identity verification firm. According to Friedman, current fraud prevention models are becoming increasingly inadequate in the face of evolving threats. Attackers can now use generative AI tools to create convincing fakes, bypass verification checks, or simulate digital footprints for legitimate users. 

A 2025 survey by identity verification platform Sumsub revealed that nearly four out of five online gaming operators reported fraud attempts involving AI-generated documents. The deposit stage was the most vulnerable one, followed by withdrawals and onboarding. Friedman observed that while security specialists had the tools to combat these new threats, it was up to operators to implement them.

We are putting more and more hurdles… in fraudsters’ paths, and making that a machine-based defense, not merely one of human gatekeepers.

Ofer Friedman, AU10TIX chief business development officer

Operators noticed that a disproportionate share of fraudulent registrations occurs in the early hours, between 4 AM and 8 AM in the local time zone of the fraudster, when hardly anyone is watching. AU10TIX observed that more attempts are coming from amateurs utilizing fully automated attack suites, as new advances in malicious software have made it more accessible than ever.

Unregulated Operators Are Also Taking Advantage of AI

While gambling platforms scramble to harden their defenses, unregulated operators are exploiting the same technologies to capture market share. Cybersecurity company ESET Research recently revealed how GhostRedirector, a China-linked hacking group, took control of at least 65 Windows servers on multiple continents. The hackers silently introduced malware to game Google search results and push visibility for offshore gambling sites.

Looking to the future, Friedman drew attention to the increasing connectivity of everyday devices that “recognize” their users. With each such device potentially containing sensitive or personal information, he was adamant that investing in cybersecurity was a necessity, rather than a luxury. This notion is doubly true for the gambling sector, which has proven a popular target of fraud attempts and cyberattacks.

The implications for regulators and licensed operators are troubling. Fraud prevention already creates friction for legitimate players and adds operational costs. With AI now allowing malicious actors to scale their attacks exponentially, pressure to innovate has never been higher. Licensed operators have a choice: invest in industrialized defenses or risk losing ground to the shadow economy of unregulated gambling.