sophisticated and operators must keep their processes up to date.
Smaller operators, or those in the grey markets, may not be properly putting protections in place, he warns. Budget constraints or lack of protection engagement raises the risk of due diligence failures.
“ If you only ask for a copy of a passport, but you don’ t do a likeness check, or if you just ask for proof of funds when you don’ t actually have the staff, experience and the tooling to check that it’ s a legitimate bank and that everything looks right with it, you are, for sure, exposed,” d’ Ancona states.
ELECTRONIC ID WALLETS One method that could help curb ID fraud is the introduction of official or national digital identifications.
Digital identity wallets or applications use numerous technologies to secure and confirm identification. These include cryptographic keys and biometric data, as well as fingerprints and facial recognition.
Digital wallets are not a nascent technology. Singapore brought out its SingPass in 2002, which acts as a national ID, allowing users to file taxes or access medical documents.
Estonia also introduced its digital ID card in 2002. Other nations with digital ID options include Germany, Sweden, Japan and Canada.
The UK’ s Post Office EasyID launched in 2021. It provides a digitalised ID that is government certified and can be used for right to work, criminal record checks and age verification.
The EU has already taken some steps in ID regulation that could be a useful aid in securing operations
“ What’ s missing right now is consistency. There’ s no shared framework for tackling AI-driven fraud, and that needs to change”
Peter Wood, Spectrum Search
as the EU Digital Identity Framework Regulation came into force in 2024. Under this, EU member states must offer at least one digital identity wallet to citizens. This app ID will allow people to identify themselves to public and private online services.
Jarek Sygitowicz, co-founder of identity verification software developer Authologic, thinks the implementation of the electronic ID wallets could be a game changer.“ These have seen adoption growing over the years, but with the EU implementing the eIDAS 2.0 regulation, what has been a slow wave will become a big jump in the next 12-24 months. While the EU has led the adoption of e-IDs, even sceptical countries such as the UK are planning to launch their own digitised driving licence in the summer,” Sygitowicz tells iGB.
CALLS FOR CONSISTENCY The threat of AI deepfakes is already here, but again, so are the majority of the tools that will be used to mitigate the risk.
While AI software in the wrong hands is capable of producing fake IDs and mimicking biometric data with increasing precision, there are advanced protection measures available. However, the adoption is patchy and smaller platforms may not be aware of their options.
“ What’ s missing right now is consistency. There’ s no shared framework for tackling AI-driven fraud, and that needs to change,” Web3 recruiter Spectrum Search CTO Peter Wood explains.
“ Regulators should be pushing for industry-wide standards around ID verification that are designed to hold up against AI. We also need to see better collaboration between platforms, some kind of anonymised, real-time data sharing system that helps flag suspicious activity across the board.”
A key challenge in detecting synthetic identity fraud is that personal identifiable information can be fragmented across platforms. With no“ unified oversight”, it can be difficult to spot inconsistencies.
MacDonald says one way to mitigate this would be for regulators and law enforcement to encourage“ international coordination on synthetic ID detection, information sharing and regulatory standards, which will be essential to staying ahead of increasingly sophisticated AI-driven fraud”.
While the risk profile for potential fraud and AML breaches enabled by the use of AI has risen, operators’ obligations to be informed and up to date have not changed.
There are tools to keep the gambling sector ahead of the threat, but industry and regulatory stakeholders may need to come to a consensus about best practice.
iGB L! VE 2025 • ISSUE 138 • 15