Investigating Deceptive Practices: A Comprehensive Manual on Online Gaming and Betting Scams (2024)
In the fast-growing iGaming industry, which is predicted to surpass $172.2 billion by 2030, fraud poses a significant challenge. Hackers, identity thieves, and other malicious actors are constantly devising new ways to exploit vulnerabilities and infiltrate platforms.
One common form of iGaming fraud is identity theft, where thieves buy real documents on the darknet to trick gambling platforms, making it difficult for even the most reliable systems to detect anything suspicious. Account takeovers, affiliate fraud, bonus abuse, chip dumping, and using illegitimate websites are other forms of fraud that target both players and platforms.
To combat these scams, iGaming platforms employ a range of strategies. Strong identity verification using multi-factor authentication and advanced KYC (Know Your Customer) checks are essential to detect fake or synthetic identities. AI-based risk detection tools that track player behavior, segment players, and detect anomalies such as multi-accounting or suspicious payout patterns in real-time are also crucial.
Two-factor authentication (2FA) and monitoring for suspicious login attempts are key to preventing account takeovers. Restricting or carefully monitoring affiliate programs can help identify and stop affiliate fraud. Educating users about phishing scams and advising them not to share banking or login credentials with others is another important measure.
Biometric or video verification methods are used to counter deepfake identity attempts, and continuous updating of fraud detection systems is necessary since fraud methods evolve with new technology and weaker ID checks.
Regulatory bodies in several countries, including the United States, Australia, United Kingdom, Sweden, and the Netherlands, have imposed heavy fines for violations of AML and responsible gaming requirements. In 2023, these bodies issued record financial penalties totaling £347,704,531 ($442,647,339) and warnings to online and land-based gambling operators.
Advanced solutions, such as automated systems developed by third-party professionals, can further aid iGaming platforms with identity and age verification, as well as monitoring player behavior throughout the entire player lifecycle. Platforms can download Sumsub's 2024 iGaming Fraud Report to learn more about the most recent iGaming fraud trends and prevention measures.
By implementing these strategies, iGaming platforms can reduce financial losses, protect user accounts, and maintain regulatory compliance amid evolving fraud tactics. The battle against iGaming fraud is ongoing, but with vigilance and the right tools, it can be won.
- Despite the challenges in the iGaming industry, where sports betting is also common, fraud poses a significant issue, with identity theft being a common form of fraud.
- To safeguard user accounts and maintain compliance, iGaming platforms employ strategies such as multi-factor authentication, AI-based risk detection, two-factor authentication, biometric or video verification, and continual updating of fraud detection systems.
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