South Africa’s iGaming sector is seeing a surge in fraud attempts as operators turn to AI for real-time detection but face new risks and regulatory scrutiny
South Africa’s iGaming industry is confronting a sharp escalation in fraud, with operators now betting on artificial intelligence to catch threats as they happen. The promise is immediate: AI systems can flag suspicious activity in real time, a leap beyond the traditional model of discovering fraud only after the damage is done. But as the sector’s digital footprint expands, so do the risks and the complexity of the tools meant to protect it.
Fraud Spike and AI Response
According to data from Sumsub, a global identity verification provider, South Africa recorded a more than threefold increase in iGaming fraud during the second half of 2025. This surge coincides with explosive market growth—Softswiss, a major iGaming software supplier, reported that the country’s total gambling turnover hit €56.8 billion (about R1.13 trillion) in FY2023/24, up 40.2% year over year. Gross gambling revenue reached €3.05 billion (about R60.99 billion), with online betting alone contributing nearly half of all gross revenue. The sector’s rapid digitalization, driven by high smartphone penetration and affordable mobile internet, has made it a prime target for increasingly sophisticated fraud tactics.
AI is being positioned as the industry’s frontline defense. Mariia Halaida, head of business development at Softswiss, argues that AI’s real value lies in its ability to analyze massive datasets and alert operators to fraud and money laundering as it unfolds. Yet she cautions that AI is not a cure-all. “AI is completely overhyped… but it cannot solve everything at once. You need to first identify what the problems are that must be addressed and then, using results that can be measured, apply AI,” Halaida said. The belief that AI alone can neutralize fraud is, in her view, misplaced.
Regulatory Pressure and Market Dynamics
South Africa’s regulatory environment is tightening in response to both market growth and mounting fraud. The Department of Trade, Industry and Competition is reviewing the National Gambling Amendment Bill, while the Advertising Regulatory Board is re-examining its Gambling Code to restrict marketing to minors. Softswiss executives say that clear, enforceable regulations are a prerequisite for their regional expansion, preferring markets where compliance requirements are transparent from the outset. The company’s focus on South Africa reflects both the market’s size—valued at approximately R75 billion for 2024/25—and its regulatory maturity compared to other African jurisdictions.
Operators are not alone in adapting to these changes. As reported earlier, digital advertising strategies are also evolving as iGaming brands seek scalable growth in emerging markets, including South Africa. The convergence of regulatory scrutiny, fraud risk, and aggressive digital expansion is forcing operators to rethink both their compliance and marketing playbooks.
Agentic AI and New Vulnerabilities
The next wave of fraud detection is being shaped by agentic AI—autonomous systems capable of investigating and acting on threats in real time. Mark Walker, director at Transformation for Innovation (T4i), describes these systems as a shift from passive, rules-based monitoring to active, multi-step containment workflows that operate at machine speed. Agentic AI can adapt to new fraud typologies without prior data labeling, analyzing complex data silos and executing interventions within milliseconds.
However, this technological leap introduces its own set of risks. Walker warns that handing decision-making power to autonomous agents can create untraceable decision paths, high operational costs, and the potential for system-wide automation errors. The very speed and autonomy that make agentic AI effective against advanced fraud also open the door to new operational and financial vulnerabilities that operators and regulators are only beginning to understand.
Market Outlook and Operator Strategy
Softswiss remains confident that its platform technology and experience will continue to add value in South Africa and across Africa, provided regulatory clarity persists. The company draws a parallel between the normalization of smartphones and the likely trajectory of AI in the sector: what begins as a “shiny new thing” may soon become a standard tool, embedded in the daily operations of iGaming platforms. But the lesson from recent fraud spikes is clear—technology alone cannot substitute for robust compliance, measured deployment, and a realistic understanding of both the promise and the limits of AI.
Gross gambling revenue (GGR) is a key metric for understanding the financial health of a gambling market. GGR represents the total amount wagered by players minus the winnings paid out, before deducting operating expenses or taxes. This figure is distinct from total handle, which measures all bets placed, and from net profit, which accounts for all costs. Regulators and operators use GGR to assess market growth, set tax rates, and benchmark performance across jurisdictions.
