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Artificial intelligence (AI) has been of great help to the gambling community, as many operators utilize it to enhance gameplay, provide innovative solutions, and even detect fraud. While it has been used for good reasons, fraudsters are now using AI to exploit the vulnerabilities of fraud prevention systems, causing cybersecurity experts to raise awareness to operators about AI-driven fraud.

In general, online gambling is growing worldwide. Many operators are accepting players from Israel and other regions where online casinos are limited. This brings them more customers, but also increases the risk of fraud. Experts warn that if operators don’t improve their security, they could face more AI-powered attacks.

Currently, fraudsters and online gambling operators are involved in what experts describe as an arms race as security breaches have gone from doctored selfies and fake IDs to more complex and sophisticated cyberattacks involving generative AI.

In a recent report, Ofer Friedman, who serves as the Chief Business Development Officer at AU10TIX, an identity verification company based in Amsterdam, said that the current fraud prevention systems being employed by online gambling operators can no longer withstand the new wave of cyberattacks as these malicious actors now use generative AI tools to bypass verifications and mimic the digital identities of legitimate customers.

A survey carried out this year by Sumsub, an identity verification platform, also adds to this point. The survey revealed that over 82% of online gaming operators have fallen victim to fraudulent attacks. Four out of every five fraud attempts recorded involved the use of AI-generated documents. It also showed that operators were most vulnerable to fraudulent registrations at the deposit stage, followed by the onboarding and withdrawal stages.

A large number of these suspicious registrations happen between 4 AM and 8 AM of the fraudster’s local time zone, with most of the attempts being carried out by amateurs. Friedmann added that new upgrades to malicious software have made it easier to carry out these registrations.

While fraudsters are using AI to bypass security checks, they aren’t the only ones using AI to exploit the market. Experts have revealed that unlicensed operators are also using AI to secure a share of the market.

In a recent announcement, ESET Research, a global cybersecurity company, explained how GhostRedirector, a hacking group, compromised about 65 Windows servers. These servers cut across different countries, mainly Thailand, Brazil, and Vietnam. ESET Research believes that the main purpose of the hack was to tamper with Google search results and boost the visibility of an unregulated gambling platform.

As hackers continue to involve AI in their operations, experts believe that malicious attacks could increase exponentially,  creating a vulnerable future for online gambling. Friedman believes that this is the best time to invest in cybersecurity and implement new security measures.

This investment is less of a choice and more of a necessity, as failure to invest in adequate technology could see operators not only lose the trust of their customers but also lose their share of the market to the underground activities of the unregulated gambling economy.