The Rise of Fraud in the Online Gambling Industries

We all need something to relax us and take our minds off the stress we deal with in everyday life. Some people have found themselves in creative hobbies, some in physical activity, some enjoy the world of gaming, and some need the excitement of online gambling. Whatever activity you choose, you want to know that you are safe. Unfortunately, the development and growth of fraudulent activity throughout the different business sectors make that more difficult than anyone would like. In this time and age, fraud is impossible to avoid, and every business sector has experienced that first hand.

Fraudsters do not care who you are and what your company’s size is; they just care about the profit they can gain by exploiting your business. This is why there has been a rise in gambling fraud, as that industry has a lot of potential for fraudsters and their malicious actions, especially considering its sudden growth amid the pandemic. Not only do online casinos and bookmakers deal with the money, but they also deal with sensitive data from businesses and customers which fraudsters can exploit for their benefit. Due to its high-risk nature, the online gaming industry needs to do everything in its power to manage the risk without turning away new customers or causing user friction.

What is online gambling fraud?

The truth is that online fraud is everywhere, and the only way to avoid it completely is to stop using the internet. Since that is not likely, you need to prevent it from affecting you. The first and most crucial step is to know what you are fighting against. How can you even fight if you don’t know what you are fighting against?

Gambling fraud is a term that covers all types of fraud whose goal is to exploit online casinos or bookmakers without having any direct involvement with the match itself.

That can be anything from:

Multiple account fraud: This type of fraud is the most common one and it happens when fraudsters use several accounts to scam the business. It can verge from using the accounts to abuse the new signup bonuses or other beneficial offers to cheating the system and using all additional accounts to ensure one of them pockets all the wins.

Stolen credit cards: This happens when fraudsters use stolen card details for fraudulent purchases such as top up on online casinos or bookmakers sites which ultimately results in chargeback requests from legitimate card owners.

Chargeback fraud: This type of fraud happens when fraudsters request a chargeback from their card provider after intentionally topping their account. The online gambling provider ends up suffering double financial loss as they have to reverse the payment, but they have already provided a top-up, and in addition, they need to pay a chargeback fee.

How can you prevent it and protect your business?

Any business that deals with the money needs to accept that they are a target for fraudsters, but that doesn’t mean they have to become victims. By being proactive and implementing the following steps into your business, you will prevent fraud attempts from causing any serious problems.

The first step you need to take is to implement a good KYC or Know Your Customer practice which allows you to verify the identity of your users and reduces the risk of fraudulent actors gaining access to your network. This can be done simply during the registration process where you need to request users to provide you with the required verifications:

ID verification: Used to ensure they have provided you with correct details during the registration process. Some businesses will also ask to provide a copy of the utility bill to confirm that users have given the valid address.

Age verification: This is a must-have for all online gambling networks to ensure the user is old enough to access the site and participate legitimately.

Photo verification: This is the newest procedure that allows you to compare users’ selfies to their picture on their ID to verify their identity additionally.

This is the most crucial data you need to gather from your users, but the more information you collect, you can ensure more easily that no fraudsters are accessing your system. Using tools such as device fingerprinting, data enrichment, email, or IP analysis, you can collect additional data without causing user friction and maximize the protection from online fraud.