The $100 Billion Problem: iGaming Fraud Set to Surge by 2025

The iGaming industry is fighting back against fraudulent traffic, with operators now successfully blocking up to 50% of fraudulent activity, according to recent research published by RockApp. This development marks a major milestone in a sector where fraudsters have long manipulated advertising budgets, distorted key metrics, and inflated acquisition costs.

Fraud in iGaming: A Multi-Billion Dollar Drain

Fraud in iGaming advertising has reached alarming levels, with up to 40% of ad traffic in iGaming campaigns being fraudulent. The rise of sophisticated fraud techniques, such as bot-generated clicks, affiliate fraud, and bonus abuse, has created an urgent need for operators to strengthen their security measures.

RockApp’s latest research, which examines the scale of fraudulent traffic across iGaming, highlights that fraud is draining billions from marketing budgets annually. Digital advertising fraud is projected to cost businesses over $100 billion annually by 2024, and the iGaming sector is among the most impacted due to its high CPAs and complex user acquisition strategies.

How Fraud is Manipulating iGaming Campaigns

Fraud in iGaming advertising takes many forms, with fraudsters using increasingly advanced methods to exploit ad networks, tracking systems, and promotional incentives. Key types of fraud affecting operators include:

• Click Fraud & Fake Traffic: Up to 50% of clicks in high-CPA iGaming campaigns come from bots, automated scripts, and fraudulent networks that deplete budgets without bringing in real users.
• Affiliate Fraud & False Attribution: Fraudulent affiliates manipulate tracking systems using tactics such as cookie stuffing, fake sign-ups, and pixel fraud, leading to inflated marketing spend.
• Multi-Accounting & Bonus Abuse: Fraudsters create thousands of fake accounts to claim promotional bonuses, distorting retention rates and inflating acquisition costs.
• Ad Injection & Domain Spoofing: Operators find their ads displayed on unauthorized or low-quality websites, misleading media buyers and reducing conversion rates.

The Financial & Operational Impact

Operators that fail to implement fraud prevention strategies are suffering from:

• Inflated CPAs: Fraudulent traffic increases acquisition costs by 30-50%, making real user acquisition more expensive.
• Distorted Performance Metrics: Fake traffic results in unreliable retention rates, conversion rates, and ROI calculations.
• Regulatory & Compliance Risks: Fraudulent advertising practices put operators at risk of violating strict responsible gaming regulations.
• Reputation Damage: Trust is essential in iGaming, and brands associated with high fraud levels risk losing credibility with users and partners.

How Operators Are Cutting Fraud in Half

With fraud levels reaching crisis proportions, leading iGaming operators are taking aggressive measures to detect and eliminate fraudulent traffic. The latest RockApp research reveals that brands implementing AI-driven fraud prevention solutions have successfully reduced fraudulent traffic by up to 50%, improving advertising efficiency and increasing real user acquisition.

Key Strategies for Combating iGaming Fraud:

• AI-Powered Traffic Analysis: Machine learning algorithms detect abnormal traffic patterns and block fraudulent users in real time.
• Affiliate Fraud Monitoring & Transparent Attribution: Advanced tracking tools expose irregular sign-ups and prevent fraudulent commissions.
• Enhanced KYC & User Verification: Biometric authentication and multi-factor verification stop multi-accounting fraud.
• Whitelisting & Real-Time Ad Verification: Operators are restricting ad placements to verified, high-quality websites to prevent domain spoofing.

The Future of Fraud Prevention in iGaming

The battle against fraud in iGaming is far from over, but the industry is making significant strides. As more operators adopt data-driven fraud detection solutions, the market is moving toward a future where advertising budgets yield real, measurable results. The reduction of fraudulent traffic by 50% marks a turning point, proving that technology-driven solutions are the key to securing long-term growth in iGaming.

RockApp’s full research on fraudulent traffic in iGaming is available now, providing a deep dive into the financial and operational impact of fraud, as well as the latest strategies operators can use to combat it effectively.