Online Identity Verification Services

KYC in Gambling: Fighting Modern Fraud Without Losing Profit

In September 2025, the landmark SiGMA summit brought together the global iGaming community in Malta. The Allpass.ai team was there, too. Beyond new technology and industry innovations, one of the key themes discussed in several panels was AML and security in gambling.

Between 2022 and 2024, fraud in online gambling increased by 64%. First-party fraud alone cost operators $2.8 billion in lost revenue. Speaking of violations of KYC and AML requirements, the global online gambling industry paid over $184 million in fines in 2024.

Even with regulations in place, fraud continues to happen. So, what goes wrong with KYC in gambling? What prevents operators from setting up these processes effectively? And most importantly, what can be done about it?

Fraud in Online Gambling: Key Insights

Regions with Highest Fraud Rates

Source: SigmaPlay

Stages Where Fraud Occurs

How Fraud in Online Casinos Has Changed

Online casino fraud is no longer limited to simple fake registrations or bonus abuse. The types of fraud have evolved, especially with the advancement of AI. Today, operators face increasingly sophisticated threats.

• Stolen & synthetic identities. Personal data purchased on the dark web is used to create entirely fake or “blended” identities that can slip past basic verification checks.

• Underage players masking their age. Teenagers and young adults try to bypass age restrictions using false IDs or altered documents.

• Account takeovers. Fraudsters exploit stolen credentials to hijack legitimate accounts, drain balances, or launder illicit funds through gameplay.

• Deepfakes & AI-driven forgeries. Fraudsters now use deepfakes and generative AI to manipulate documents and biometric data, creating identities that look legitimate but are entirely fabricated.

• Multi-accounting & collusion. Players open multiple accounts under different identities to exploit bonuses, skew odds, or collude in peer-to-peer games like poker.

Casinos Can’t Afford to Cut Corners on KYC

For regulated casinos, weak KYC isn’t just about the risk of a fine. Penalties from regulators are the most obvious consequence, but the real damage often happens elsewhere.

Players quickly lose trust when they feel a platform is unsafe, and once high-value customers walk away, they rarely return. At the same time, payment providers, affiliates, and game suppliers don’t want to be associated with operators under investigation. Even a single compliance scandal can cut a business off from the partners it needs to survive. And when cases reach the media, the reputational fallout spreads faster than any official sanction.

Cutting corners on KYC may save money in the short term, but in practice, it puts an operator’s entire business at risk.

High-Profile KYC/AML Enforcement Cases

Even top-tier operators are not immune. These high-profile enforcement cases show just how costly lapses in KYC and AML processes can be, both in fines and in reputational damage.

Betway

In March 2020, Betway, an online gambling business, was fined £11.6 million by the UK Gambling Commission. The investigation found that Betway failed to implement effective anti-money laundering controls and did not adequately interact with high-spending customers who were at risk of gambling harm. The company allowed £5.8 million to flow through the business, some of which was stolen money.

The regulator noted that Betway’s actions demonstrated little regard for the welfare of its clients or the broader impact on those around them. Consequences included not only the record fine but also severe reputational damage, heightened regulatory scrutiny, and stricter monitoring of future operations.

888 UK Limited

In March 2022, 888 UK Limited, operating 78 websites including 888.com, was fined £9.4 million by the UK Gambling Commission. The investigation revealed significant failures in social responsibility and money laundering practices. The company allowed customers to gamble large sums without proper checks on the source of funds, breaching the Commission`s formal guidance.

The UKGC publicly stated that if such failures were repeated, the operator’s suitability to uphold licensing objectives and maintain safe gambling would be seriously reconsidered.

In Touch Games

In January 2023, In Touch Games, operating 11 online sites, was fined £6.1 million by the UK Gambling Commission. The investigation revealed social responsibility and money laundering failures, including failing to interact with a customer for seven weeks despite erratic play patterns. The operator, which had faced previous fines, was warned that further action would be taken for repeat offences.

Why Gambling Platforms Struggle with KYC/AML

Even though KYC and AML are essential for safe and sustainable online gambling, many operators still face gaps in their implementation. The reasons are largely practical and business-driven:

Balancing User Experience and KYC Compliance

One of the most common concerns gambling operators voice is the risk of losing players during the KYC process. And there’s some truth to it. Research shows that around 24% of U.S. bettors abandon sign-up when faced with cumbersome identity checks. While there isn’t a lot of gambling-specific data globally, this figure highlights that verification friction is a valid issue.

At the same time, the cost of acquiring a single gambling customer is very high—on average $100–$600 per player, depending on the market. That means every abandoned sign-up represents a significant financial loss.

However, the problem is solvable. A well-designed KYC flow does not need to hurt conversion. The key is in choosing the right tools and ensuring a seamless user experience:

• High pass rates: Look for identity verification software that delivers strong first-try success. For example, Allpass.ai achieves 95% verification on the first attempt, allowing players to get through checks quickly and without frustration.

• Process design: Software should allow you to customize the KYC flow, keeping only the steps that are legally required for a given market. A clear, intuitive design helps users move smoothly through the process without confusion or unnecessary effort.

Done right, KYC can protect the gambling operator while maintaining conversion rates and keeping compliance costs manageable.

Implementation and Maintenance Costs

Implementing KYC can be expensive, and this is one of the main reasons operators hesitate to invest. Large platforms usually have the resources to absorb these costs, but for new or mid-sized casinos, the financial burden can feel overwhelming.

On average, manual KYC checks can cost between $3–$5 per user, not counting the overhead of compliance teams, ongoing monitoring, and data storage. For growing platforms, these expenses add up quickly and can eat into already tight margins.

Beyond per-user costs, setting up a compliance infrastructure is another challenge. Industry estimates suggest that integrating a KYC/AML module into a new gambling platform can cost €10,000–€25,000 in initial setup alone, plus ongoing yearly expenses for legal support and licensing. For smaller operators, this entry barrier often feels prohibitive.

But cost doesn’t have to be a barrier. Modern identity verification solutions have made KYC more affordable and scalable. For example, Allpass.ai provides fast and accurate verification at a fraction of traditional costs. The fact that the software is cloud-based further cuts down implementation and maintenance costs.

This shifts KYC from being a heavy expense into a strategic investment that can help expand into other markets without breaking the budget.

The Complexity of Multi-Market Compliance

KYC requirements vary widely between jurisdictions. This fragmentation creates operational challenges:

• Operators must adapt onboarding processes to local regulations.

• Different markets require varying levels of due diligence.

• Scaling across regions without a unified approach can lead to gaps and inconsistencies.

For global operators, this means juggling multiple vendors, workflows, and compliance teams—slowing down onboarding and driving up costs.

The solution lies in adopting flexible, customizable KYC platforms that allow operators to configure requirements by market. With solutions like Allpass.ai, operators can build customized KYC processes tailored to each jurisdiction.

A compliance manager sets up the process once for a given market, and it runs automatically for every user in that region. Since the product is built on a modular architecture, making adjustments doesn’t mean rebuilding the workflow from scratch. Existing processes can be easily edited and updated as regulations change.

This allows operators to manage all their KYC processes in one place, reducing complexity, ensuring consistency, and saving time.

Bottom Line

Fraud in gambling has become more advanced, but so have the tools to fight it. Cutting corners on KYC might save money in the short term, but it puts the entire business model at risk.

Solutions like Allpass.ai demonstrate that KYC can be both rigorous and straightforward for operators. The platform is designed to be easy to implement, cost-effective compared with building internal systems or using heavily marketed alternatives, and suitable for businesses of all sizes.

For smaller operators in particular, it provides an easy way to protect against fraud while remaining fully compliant with regulatory requirements. Book a demo to explore how Allpass.ai can fit into your operations.