Fraud is killing innovation – it’s time the igaming industry fought back

Given the complexity of the challenge, it is understandable why igaming operators have traditionally leaned into a reactive approach when tackling fraudulent activity.

According to research, fraud in the sector rocketed by an average of 64% per year between 2022 and 2024, while half of online gambling companies lost 10% of revenue through such activities last year.

Fraudsters are getting more sophisticated and – coupled with increasing regulatory scrutiny – operators have encountered growing pressure from all sides.

However, in this context, reactive compliance for such a critical issue is hampering innovation and progress, according to Ian Campbell, director of solutions at payment services provider Equals Money.

Campbell argues that a change of mindset is required from operators to bring about real change, so that integrated and progressive payment solutions are viewed as a strategic lever, rather than merely a backend function.

Onboarding protocols

By adopting such an approach, operators can shift towards proactive collaboration with payment platforms underpinned by shared onboarding protocols that protect players and future-proof businesses – and the sector at large.

“One key area is joint onboarding protocols, and we onboard both the gaming company and their underlying customers,” Campbell explains.

“By working closely with gaming operators, we can align on what information and checks are needed during onboarding, and they can embed those into their own journeys.

“This proactive approach reduces fraud further down the line and speeds up payment processing for genuine customers. It also benefits financial institutions by allowing us to detect suspicious activity early.”

Fraud risk

Fraud risk is considered to be the number one barrier to payment innovation across all sectors, with Campbell highlighting Equals Money’s research that 42% of businesses consider it to be their biggest risk.

However, as mentioned, direct onboarding – which brings both the gaming company and their customers into Equals Money’s system individually – is a key way to mitigate the issue.

Each underlying client is assigned a unique IBAN, improving reconciliation and helping isolate issues quickly.

“If there’s a problem, we know exactly where it is,” Campbell says. “That level of visibility helps both us and the gaming firm manage fraud more effectively and keeps issues from affecting an entire pool of funds.”

“If an issue arises, we can freeze activity at the specific IBAN level, rather than freezing the entire client account. That containment allows gaming firms to continue serving other customers without interruption – a huge benefit in such a fast-moving industry.”

Collaborative approach

By focusing on embedding new strategies at the onboarding stage, Equals Money aims to optimise customer flows, and then recommend specific solutions.

As part of this collaborative approach, operators should view payment solutions as an opportunity rather than a challenge. With this in mind, Campbell believes data-sharing represents a big opportunity.

“Right now, there’s not a lot of cross-industry sharing on what fraud actually looks like in igaming,” Campbell says. “Creating a shared ecosystem for fraud indicators would be a huge step forward. It would let firms spot and stop fraud faster, based on shared intelligence.”

Real-time monitoring

Whilst breaking down data siloes is important, a nimble approach to the task is required, with Campbell adding that real-time monitoring is “absolutely crucial” in detecting and preventing fraud.

“Real-time monitoring allows us to detect and respond to suspicious activity as it happens,” he says. “At Equals, all our transaction monitoring is in real time. That means we can immediately flag and investigate any irregularities, whether payments are going in or out.

“Collaboration is important here too. While we can’t share specific transaction monitoring rules for compliance reasons, we can work with our gaming clients to help them understand what kinds of patterns or red flags to look out for.

“That way, both the financial institution and the operator are better equipped to catch fraud early, while still delivering the real-time payments consumers expect.”

“Creating a shared ecosystem for fraud indicators would be a huge step forward. It would let firms spot and stop fraud faster, based on shared intelligence.”

The role of APIs

Underpinning real-time monitoring is speed – and APIs play a vital role in enabling faster and more secure payments in gaming.

“Instant payments are no longer a luxury – they’re expected,” Campbell says.

“Gaming companies need to move funds in minutes, not days. APIs make that possible by allowing seamless integration with financial institutions like Equals, which provide global real-time payments.

“But speed alone isn’t enough. Security and compliance are key. APIs need to be backed by robust onboarding processes and real-time monitoring systems. That way, gaming firms can deliver instant payments without compromising on safety.”

AI-driven analytics

In a sector that supports countless transactions, scalability is needed. Research published last year by Equals Money found that 95% of financial leaders are either using or considering using artificial intelligence (AI) in their processes.

The business uses AI-driven analytics both in onboarding and transaction monitoring, and Campbell praises the technology as “one of the most effective tools in fraud detection and monitoring”. However, he notes that there is still work to be done to ensure AI can be used effectively and responsibly at scale.

“We’re seeing some really impressive developments in this space, which are increasingly being adopted across the industry,” he explains. “AI can not only help detect potential fraud more accurately but also support the kind of real-time payments gaming customers expect.

“The insights it gives us are powerful, but again, it has to be deployed within a clear, safe compliance framework.”

The growth of stablecoins

Another emerging trend in the sector is the growing utilisation of blockchain – and specifically stablecoins, which are cryptocurrency tokens that track the value of fiat currencies like the US dollar.

Global circulation of stablecoins has reportedly risen to about $250bn, with Campbell anticipating significant developments in the space over the next 12 months as European lawmakers attempt to catch up with the US, where a crypto-friendly administration has accelerated progress.

“It’s hard to go an hour without someone mentioning stablecoins these days,” says Campbell, who notes that the tokens account for as much as 20% of usage in some sectors.

“Stablecoins offer real benefits. They help hedge against volatility and enable faster settlements. But it’s still early days in gaming, and regulators, particularly the Financial Conduct Authority (FCA), remain cautious due to potential fraud risks.”

A ‘great step forward’ with the FCA

In March, the UK government announced plans to consolidate the Payment Systems Regulator (PSR)’s functions into the FCA. Campbell is optimistic that shifting to a single regulator represents a “great step forward”, allowing for closer alignment with gaming firms and the chance to build a more coherent and effective framework.

“This is a real opportunity for the FCA to provide clear, consistent guidance,” Campbell says.

“The FCA has long promoted trust, transparency, and strong supervision, and these are qualities that are crucial in igaming. Streamlining compliance requirements through a unified regulator could help firms both meet standards and innovate more confidently.

“The clearer the FCA can be on what constitutes best practice, the better equipped firms will be to implement the right tools early and reduce their exposure.”

A ‘safe path to innovation’

The aim is to move beyond ticking regulatory boxes and adopting a more progressive and integrated approach to payments that is supported by proactive regulatory collaboration.

On this point, Campbell is confident that the FCA can continue to support innovation while maintaining strong compliance standards. One way of doing this, he says, is by expanding the use of regulatory sandboxes, which are controlled environments that allow companies to test new technologies safely.

“Having spoken with the FCA’s innovation team, it is clear they are keen to engage more closely with igaming firms,” Campbell says. “If something proves effective in the sandbox, it can then be incorporated into formal guidance. That creates a safe path to innovation, without compromising compliance.”