Hours before Argentina and Spain met on the pitch for the World Cup Final in July 2026, the Council of Europe’s Secretary General Alain Berset raised a yellow card to the organization in charge of international soccer’s premier tournament. Berset’s yellow card was an open letter, and it rebuked the Fédération Internationale de Football Association (FIFA) for a series of decisions and deals. In the letter, Berset decried FIFA’s decision to renege on U.S. striker Folarin Balogun’s suspension after pressure from the U.S. government. He also singled out a deal between FIFA and an obscure blockchain-based forecasting platform called ADI Predictstreet, saying the deal could make international soccer vulnerable to fraud.
FIFA initially promoted the deal with ADI Predictstreet as a way to boost fan engagement during the World Cup, allowing them to forecast goals, player performances, and tournament outcomes before and during matches. But the deal, which made ADI Predictstreet the official prediction-market sponsor of the 2026 World Cup, raised suspicions almost as soon as the ink dried on the contract. Critics questioned why FIFA selected the little-known ADI Predictstreet and highlighted that the company received its license from international gambling hub Gibraltar (a British territory on Spain’s southern coast) just days before announcing the partnership.
According to Berset, “betting on every pass, every card, every corner,” is an invitation for fraudulent activity. “Betting has moved from the result of a match to moments a single player can produce without changing the score,” Berset wrote. “A bet is won by making others lose. It is an open door to fraud. And this World Cup has opened the door wider.”
Whether the deal between ADI Predictstreet and FIFA ushered fraud through international soccer’s door has yet to be revealed, but the Group of Copenhagen, an international anti-sports-manipulation advisory body, identified several potential betting irregularities during the tournament. Those irregularities include forecasting platform Polymarket receiving $4.8 million on markets for Spain to lose to Cape Verde in their group-stage game, which ended in a draw, and opening a market on July 2, 2026, asking, “Will Folarin Balogun play against Belgium?” on the same day he received a red card during a game against Bosnia and Herzegovina.
International soccer isn’t the only sport grappling with betting-related integrity concerns. Recent high-profile betting scandals involving players and others connected to the National Basketball Association (NBA) and Major League Baseball (MLB) prompted sports news platform Front Office Sports to name 2025 “The Year of Sports Gambling Scandals.”
Sports history is punctuated with instances of illegal betting, match fixes and corruption, but the spread of legalized gambling and growth of online sportsbooks and prediction markets raise the stakes. [See “A brief history of sports betting scandals” at the end of this article.] With an explosion of betting platforms and the ease of betting with mobile apps, sports gambling is just as accessible to fraudsters as it is for sports fans. Online prediction markets allow people to forecast outcomes on just about anything — from World Cup victors to presidential election winners — and up the ante for fraudulent activity, especially with prediction platforms muddling distinctions between trading and gambling. Online sports betting is also a growing public health concern as many sports fans grapple with gambling addiction. The playing field is wide open to a new generation of fraud perpetrators and victims alike.
Even sports fans who never place a wager are familiar with sportsbooks and prediction platforms. Gambling advertising has become a constant presence in sports media, rivaling alcohol advertising in volume. A 2026 The Washington Post analysis of 50 hours of televised football, basketball and hockey games in the U.S. found gambling references, promotions or commercials occurred every four minutes on average. Ads appeared on goal posts, team jerseys and basketball backboards while broadcasters routinely read betting promotions on air. As Raffaello Rossi, a marketing professor at the University of Bristol in the U.K., told The Post, “the overarching aim is that as soon as you think about sports, you think about betting.”
A sportsbook is where bettors place their bets. It can be a physical location, such as a casino or self-service kiosk at a stadium, but online betting platforms and mobile apps are fast eclipsing in-person bets as the fan favorite. A 2026 survey by the Siena Research Institute and St. Bonaventure University found that 27% of Americans, including 52% of men ages 18–49, have an active online sportsbook account. The survey shows a steady trend upward in online betting interest, with 19% of respondents reporting interest in 2024 and 22% indicating interest in 2025.
Sportsbooks accepted nearly $200 billion in wagers in 2025, and betting activity surged during the 2026 FIFA World Cup, according to ESPN. The final match, in which Spain beat Argentina, was the most bet on game in the histories of BetMGM, Caesars Sportsbook and DraftKings. DraftKings reported a windfall of 650% more wagers in 2026 over wagers during the 2022 World Cup. BetMGM reported receiving 211% more wagers in 2026 over 2022.
In the U.S., sports betting expanded dramatically in 2018 after the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act, allowing states to legalize and regulate sports wagering. Today, 39 U.S. states and Washington, D.C. have legalized sports betting, and 30 states allow online and mobile app gambling. According to CBS Sports, nearly every U.S. state has introduced a bill to legalize sports betting at some point since 2018. Although leagues once opposed expanded gambling because of integrity concerns, many now maintain advertising partnerships and business relationships with sportsbooks.
Outside the U.S., in the U.K., Europe and Australia, legalized sports betting has been established and regulated for decades. In Canada, it’s been legal since 2021. Many Latin American countries permit gambling, with a patchwork of regulations across the continent. Legal sports betting has enthusiastic fans across Africa, and the market there was valued at $1.85 billion in 2024 and projected to exceed $3.6 billion in 2029. In the Middle East, the United Arab Emirates licensed its first online sports-betting and internet-gaming platform in 2026. Its gaming regulator, the General Commercial Gaming Regulatory Authority, was established in 2023.
Prediction markets first garnered public attention during the 2024 U.S. presidential election as news media cited forecasts on Polymarket as real-time, reliable gauges of how voters would decide the race. A New York Times analysis of Polymarket data showed hundreds of bets on one day in June 2025 predicting that the U.S. would strike Iran within a day. Indeed, the U.S. attacked Iran and users made a profit.
On prediction platforms, participants buy and sell contracts based on the outcomes of future events. According to Fidelity, these contracts gain or lose value depending on whether the forecasted outcome plays out. Pew Research Center reports that trading volumes on these sites have increased dramatically in the last year. According to Pew, combined monthly global trading rose from less than $5 billion in 2025 to $24 billion in 2026. While predictions about wars and presidential elections have captured public attention, Pew reports that sports bets make up a healthy percentage of trades on Kalshi (80%) and Polymarket (39%).
People may place bets on prediction markets similar to sportsbooks, but they’re not always treated — or regulated — like them. In the U.S., prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) like other futures markets. However, other regions regulate them like sportsbooks, such as with the U.K.’s Gambling Commission. Gambling and trading on prediction markets do share some commonalities — they both involve risk and potential for gains and losses — but gambling is largely a game of chance. Traders rely on research and data to identify long-term positive outcomes. On prediction markets, people bet against one another, while people bet against “the house” on gambling sites. Prediction markets contend that unlike gambling markets, they don’t benefit when customers lose.
The emergence of prediction markets raises a host of questions about their legality and how they should be regulated. Unlike sportsbooks, prediction markets are open to customers in places where sports gambling is illegal, and they allow anyone over 18 to place bets. In the U.S., people under the age of 21 are generally barred from gambling. Experts have claimed that prediction markets found a “regulatory loophole” to offer sports betting at the federal level in the U.S. to bypass state laws. Some states are seeking to ban prediction markets. For example, In July 2026, New York State sued Kalshi, calling it an “illegal, unlicensed gambling operation.”
Insider trading is now a subject of several legal cases regarding prediction markets. A U.S. Army special forces soldier involved in the capture of President Nicolás Maduro of Venezuela was charged with using classified information to bet on events related to the mission. In another case, a Google employee was indicted on charges of insider trading for allegedly using inside information to bet on Google search markets on Polymarket.
Looking ahead, Anne Layne, CFE, CPA, director of Risk Advisory at Grant Thornton Advisors LLC, expects fraud examiners to encounter increasing misuse of prediction markets and other emerging wagering platforms. She warns that anyone with access to nonpublic information may gain an unfair advantage without directly influencing outcomes. According to Layne, even a slight informational advantage can undermine market integrity. As prediction markets expand into events beyond sports, social engineering may become a growing threat, she cautions, as bad actors seek access to information that could improve their chances of success.
Between 2022 and 2025, the Better Business Bureau (BBB) reported receiving nearly 200 scam reports and more than 10,000 complaints about online gambling businesses. Scams reported to the BBB included stolen bank accounts, compromised payment credentials or unauthorized ACH transfers to fund accounts and withdraw winnings that will be converted to cryptocurrency. With the wide range of online payment methods available to sports bettors, including credit cards, digital wallets and cryptocurrencies, fraudsters have numerous avenues for targeting online gambling platforms. Artificial intelligence (AI) allows fraudsters to automate schemes and open accounts by creating convincing identity documents that bypass know-your-customer (KYC) verification. Common online gambling schemes include:
ATO, bonus abuse, promotional fraud and loyalty program manipulation remain among the industry’s most significant sources of financial loss.
The American Gaming Association estimated in 2025 that people in the U.S. wager $673.6 billion annually in illegal and unregulated markets. Engaging in illegal sports betting exposes people to other illegal practices such as tax evasion and money laundering to conceal their winnings.
Criminals are coordinating multistage attacks that combine synthetic identities, ATO, bonus abuse and money laundering into highly organized operations. Layne says that criminal organizations increasingly view betting platforms as attractive vehicles for fraud and money laundering because they offer opportunities to move funds while generating profits simultaneously. “If they can make money while they’re laundering their money, why not?” she tells Fraud Magazine.
According to Sally Gainsbury, Ph.D., professor and director of the Gambling Research and Policy Unit at the University of Sydney, online sports betting poses unique risks because of its accessibility and convenience. “You can gamble at any time of day,” she says. And for people struggling to control their gambling, “there’s no friction” between the impulse to bet and the ability to place a wager. Gainsbury says that many mistakenly view sports betting as a test of skill rather than a game of chance. Although sports knowledge may influence decisions, consistently profitable betting requires accurately assessing odds, and sportsbooks maintain a built-in advantage. As Gainsbury explains to Fraud Magazine, operators “take more money than they lose,” minimizing their own risk.
Gainsbury highlights advertising, promotions and bonus offers as factors that encourage betting activity. She advises operators to provide tools that help customers track spending and make informed decisions. Public health experts warn that constant access to betting through mobile devices, combined with aggressive marketing and increasingly immersive wagering products, may contribute to gambling-related harm. According to 2024 data from the National Problem Gambling Helpline Network, requests for assistance increased 33% from the previous year, with major sporting events producing significant spikes in help-seeking behavior. [See “When entertainment becomes addiction” at the end of this article.]
Another byproduct of sports betting addiction is fraud. Several high-profile cases demonstrate how the pressure to pay off accumulated debts from gambling can lead to fraudulent behavior. In 2025, Ippei Mizuhara was sentenced to nearly five years in prison for stealing $17 million from Los Angeles Dodgers’ star Shohei Ohtani. Mizuhara, who served as Ohtani’s English interpreter, had racked up debt due to a sports gambling addiction and resorted to embezzling from the MLB hitting and pitching great to pay off his bookmaker. In another case, Toronto Raptors forward Jontay Porter was banned from playing in the NBA for life after pleading guilty to conspiracy to commit wire fraud in 2024. Porter admitted to withdrawing early from games so that coconspirators could win bets on his performance. He told the court that he had “to get out from under large gambling debts.”
AI is transforming how U.S. online casinos verify customers, detect fraud and meet regulatory requirements. Days of manual review can now be completed in minutes through AI-powered identity verification systems that scan documents, authenticate users and flag potential risks in real time. These technologies help operators comply with age verification rules, anti-money laundering (AML) regulations, responsible gambling safeguards, income checks and self-exclusion programs while creating a faster, smoother experience for legitimate players.
Online casinos process enormous volumes of deposits, withdrawals and wagers every day, making traditional manual oversight impractical. AI enables operators to analyze vast amounts of transactional and behavioral data, identifying suspicious activity that might otherwise go unnoticed. Rather than relying solely on static rules, modern machine learning systems continuously adapt to emerging threats and evolving fraud tactics.
Casinos aren’t the only ones using AI. Fraudsters have embraced generative AI to create convincing fake identities, forged documents, deepfake videos and cloned voices intended to defeat traditional verification processes. Consequently, fraud prevention has become a technological arms race in which attackers and defenders are leveraging increasingly sophisticated AI tools.
Despite the focus on large-scale criminal operations, Layne cautions that operators shouldn’t overlook smaller irregularities. “Anything that changes the odds in your favor is cheating, and it’s a problem,” she explains. She adds that smaller incidents can accumulate and become significant losses over time. “Those all add up,” Layne says, emphasizing the importance of preventive controls that stop suspicious activity before investigators devote substantial resources to review it later.
The market for AI fraud detection in sports betting and online gambling is projected to reach roughly $1.9 billion in 2026, driven by regulatory pressure and increasingly costly fraud attacks. Operators are combining behavioral analytics with AI-powered monitoring systems that can identify anomalies in real time, helping investigators detect suspicious activity before losses escalate.
As AI becomes more effective, many gaming companies are expanding their compliance and fraud investigation teams. Automated tools may flag unusual deposit and withdrawal patterns, rapid account creation, device-sharing indicators, bonus abuse schemes, geolocation anomalies, potential ATO and other high-risk behaviors. Fraud examiners must evaluate these alerts, distinguish legitimate customer activity from fraud indicators and determine whether their findings warrant additional investigation. Compliance officers also play a critical role in ensuring that automated systems remain accurate, fair and aligned with evolving regulations. Regulators worldwide increasingly require operators to maintain robust AML compliance programs. Failure to comply can result in significant financial penalties, license reviews, mandatory third-party audits, operational restrictions, license suspensions, and in extreme cases, revocation of gaming licenses or criminal investigations.
Layne emphasizes that AI and analytics tools remain most effective when paired with experienced investigators. Although advanced technologies can rapidly identify unusual patterns and anomalies, fraud examiners must determine whether suspicious activity truly represents fraud. As AI capabilities expand, she says that investigators continue to rely on traditional analytical techniques coupled with manual review. “Sometimes you still have to do a Google search,” Layne says. “Sometimes you have to get a spreadsheet and make a pivot table.”
Effective fraud investigations often require reviewing customer account histories, transaction records, device and location data, identity verification results, gameplay activity, and external intelligence sources. Examiners may also conduct enhanced due diligence, request supplemental documentation, verify source of funds, review linked accounts, and coordinate with AML, compliance and responsible gambling teams when suspicious activity presents multiple risk factors.
Fraud examiners are also responsible for assessing whether fraud detection rules and machine learning models are producing useful results. By identifying false positives, uncovering emerging fraud patterns and documenting investigative outcomes, they help improve detection systems over time while ensuring controls remain aligned with regulatory expectations. Their role increasingly serves as the bridge between automated fraud detection technology and the human judgment required to make defensible risk decisions.
The U.K. Gambling Commission’s October 2025 emerging risks briefing highlights the growing money laundering risks associated with prepaid payment methods used in gambling, including prepaid cards, vouchers and similar products. According to the Gambling Commission, prepaid payment methods are particularly high risk because they can be loaded with cash or crypto assets, sometimes through third-party services, and they offer a degree of anonymity. That makes it harder to identify the source of funds and track transactions. In addition, despite the U.K.’s prohibition on gambling payments by credit card, prepaid products can be used to circumvent the ban.
Mitigating the risks posed by prepaid products and strengthening AML controls requires fraud examiners to take a multipronged approach that involves updating risk assessments to cover all payment methods, conducting risk-based customer due diligence, and applying enhanced due diligence for high-risk customers, including verifying source of wealth and source of funds where appropriate. The commission also recommends maintaining responsibility for KYC checks, even when using third-party providers.
Operators increasingly rely on affiliate marketers to acquire customers while facing growing risks from affiliate fraud and commission manipulation. According to the ACGCS website, affiliates often receive commissions based on player sign-ups, deposits or gaming revenue. Although many affiliates operate legitimately, some manipulate tracking systems or marketing activities to claim commissions they didn’t legitimately earn. Regulators increasingly view affiliates as an extension of the operator’s marketing function and hold operators responsible for affiliate misconduct, according to ACGCS. Cookie stuffing is a common affiliate fraud scheme that involves placing affiliate tracking cookies on users’ devices without a legitimate referral, allowing affiliates to claim commissions for customers they didn’t acquire. Click fraud and bot traffic use automated traffic, fake clicks, or bot-generated registrations to inflate affiliate performance and earn commissions.
Although AI has improved fraud detection capabilities, technology alone can’t address every emerging threat facing the gambling industry. Fraud examiners increasingly must navigate a landscape of risks beyond ATO and identity fraud to include money laundering, insider information, payment system abuse and third-party misconduct. As betting platforms and prediction markets continue to evolve, regulators are scrutinizing vulnerabilities that sophisticated fraudsters can exploit. “The biggest mistake operators can make is treating fraud, money laundering and gaming integrity as separate problems,” Messenger tells Fraud Magazine. “Increasingly, the same customers, transactions and technologies can present multiple risks at the same time, which makes integrated monitoring and strong human judgment essential.”
Layne advises fraud examiners across the gaming industry to remain alert to the risks posed by insider information and emerging betting opportunities. “Don’t discount how important insider information is,” she stresses. “Pay attention to the trends and know what’s going on.” As gambling, prediction markets and digital payment systems continue to evolve, Layne says that vigilance and awareness will remain as important as technology in detecting and preventing fraud.
Editor’s note: If you or someone you know is struggling with gambling addiction, you may access free, confidential resources by calling or texting the National Problem Gambling Helpline at 1-800-MY-RESET (1-800-697-3738).
Jennifer Liebman, CFE, is editor in chief of Fraud Magazine. Contact her at jliebman@ACFE.com.
Crystal Zuzek, CFE, is the associate editor of Fraud Magazine. Contact her at czuzek@ACFE.com.
Betting fraud incidents have scandalized fans, players and others involved in the game throughout the history of organized sports. Here’s a timeline of notable cases.
For many, online sports betting begins as entertainment. But for some, it can spiral into compulsive behavior with devastating personal and financial consequences. U.S. sports bettor Terry Thompson became a heavy user of the online sportsbook FanDuel, wagering approximately $18.5 million through the platform between 2020 and 2025. According to reports, he lost about $2 million on sports bets. To finance his gambling, he took out second and third mortgages on his home, which eventually went into foreclosure, and sold his ownership stake in an investment company. His gambling problems became severe enough that he sought treatment at a psychiatric facility for addiction.
Thompson is one of two plaintiffs in a landmark lawsuit filed by the Public Health Advocacy Institute (PHAI) against DraftKings, FanDuel, Genius Sports and the NFL. The complaint alleges that sportsbook operators used selective programs, promotional incentives, personalized outreach, and other engagement tactics to encourage continued gambling, even when customers displayed signs of problematic behavior. The lawsuit further claims that defendants developed and promoted sports betting products, particularly live, in-game micro-betting opportunities, designed to maximize betting frequency and increase user engagement. According to the complaint, the gambling ecosystem relies on sophisticated technologies, including AI, machine learning, personalized marketing and real-time data analytics, to drive betting activity and profits.
The case seeks to hold sportsbooks and the NFL accountable for allegedly creating and profiting from an environment that encourages compulsive gambling. Among its claims are allegations of product design defects, failure to warn consumers of addiction risks, negligence and intentional infliction of emotional distress.
PHAI has drawn parallels between the modern sports-betting industry and the tobacco industry, asserting that companies have engineered highly engaging, potentially addictive products while minimizing the associated risks to the public. Gambling disorder is recognized by the American Psychological Association and the World Health Organization as a legitimate addiction and public health concern. A review of more than 140 studies and reports conducted for the National Council on Problem Gambling (NCPG) found that the introduction of online sports betting coincides with increased rates of gambling-related harm. Among sports bettors studied, 16% showed signs consistent with gambling disorder while another 13% exhibited characteristics of problem gambling. Gambling disorder is a recognized mental health condition marked by a persistent inability to control betting behavior despite serious financial, social or emotional consequences.
Warning signs of gambling addiction include:
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