Emerging technologies – especially AI – can bolster crime prevention within online gambling, says LexisNexis Risk Solutions.
The explosive growth of South Africa’s online gambling and betting sector means increased opportunities for criminals, with expanding sports betting, new licences and booming digital payments open to exploitation if anti-money-laundering (AML) and combating the financing of terrorism (CFT) controls lag behind.
This is according to global data and analytics company LexisNexis Risk Solutions, which claims its most recent research shows revenue from SA’s online gambling and betting sector soared 1 400% in five years, to reach R152.6 billion in 2023.
iGaming software developer SOFTSWISS says in FY2023/2024, South Africa’s total gambling turnover reached €56.8 billion (about R1.13 trillion), representing a 40.2% year-on-year increase, while gross gambling revenue (GGR) stood at €3.05 billion (about R60.99 billion), up 25.7% from the previous year.
The betting sector dominates the market, accounting for 60% of total GGR, with online betting alone contributing €1.5 billion (about R29.9 billion) in revenue.
Lee-Anne Kotze, head of Africa, financial crime compliance, LexisNexis Risk Solutions, says the company is seeing a clear acceleration in demand for technology to support identity verification and know-your-customer (KYC), fraud prevention and transaction monitoring from both operators and financial institutions serving the sector.
“Online gambling sites carry unique AML/CFT risks due to the requirement for rapid digital onboarding, high velocity transactions and cross-border payment channels. Regulators can strengthen controls by enforcing consistent KYC and threshold standards across provinces, mandating real-time transaction monitoring and expanding information sharing between gambling boards, banks and law enforcement.
“Using device intelligence and behavioural analytics to screen at onboarding can help detect anomalies early. A coordinated supervisory approach that mirrors frameworks used in other digital finance sectors will be essential to ensure operators maintain robust AML/CFT compliance as the industry grows.”
Kotze adds that while the country’s financial sector is recognised for its mature and well-established AML/CFT frameworks, the gambling sector must strive for the same standards. This includes implementing a clear risk management and compliance programme, appointing a dedicated money-laundering reporting officer and ensuring executive level buy-in.
“A stringent risk-based approach in line with FATF [Financial Action Task Force] recommendation one, combined with up-to-date customer screening, ongoing monitoring, controls configured to risk appetite, comprehensive data coverage and continuous staff training, will help build a trustworthy and well-regulated gambling environment.”
LexisNexis Risk Solutions believes emerging technologies – especially AI – have a role to play in helping to bolster crime prevention within online gambling.
Kotze says AI and emerging technologies can significantly streamline processes for both operators and players by automating routine steps, accelerating onboarding and reducing friction for low-risk customers.
“However, AI cannot replace core compliance requirements,” she adds. “Operators will still need to validate customer information against authoritative data sources and apply certain checks at key points in the customer journey. Verifying that a player is who they say they are, or confirming affordability through payslips or bank statements remains essential. AI enhances efficiency, but human oversight and documentary evidence will always be critical to maintaining robust standards and protecting players.”
Johan Steyn, AI expert and founder of AIforBusiness.net, comments on ways AI can be used within the gaming space.
“AI can absolutely support responsible gambling by continuously analysing changes in bet size, frequency and playing times to flag risky patterns early, trigger ‘cool-off’ nudges, and alert human support teams before real harm occurs.
“The same technology, however, can just as easily be used to maximise revenue from vulnerable players, so regulators and operators will need clear guardrails, independent auditing and transparency to prove that these systems are genuinely designed to protect people, not only profits.”
Kotze says as South Africa’s gambling sector expands, strengthening AML and CFT controls will require the same disciplines that underpin the country’s broader financial system. This includes consistent national standards, risk-based controls aligned with FATF expectations and stronger coordination between gambling boards, banks and law-enforcement.
“Enhanced due diligence for higher-risk players, real-time monitoring and comprehensive data coverage will help identify risks and misuse early,” she adds.
