Online betting has made it easier for millions to enjoy responsible gaming from the comfort of their homes. There is good news and bad news for the multi-billion dollar online betting market.
The good news is that in various corners of the world, online betting is completely legal and the stakeholders are protected under the law. As per Statista, the current size of the online betting market is 59 billion U.S. dollars and is expected to be valued at more than 92.9 billion U.S. dollars by 2023.
The bad news is that this huge pool of money attracts all types of fraudsters and scammers looking to take advantage of the loopholes in the online betting industry. So, for betting websites, it becomes extremely important to take necessary measures that can protect their business and customers from online betting frauds.
A 262% surge in online betting frauds!
As per a report from Transunion, in the US alone, the rate of online betting fraud reached 262% from Q2 2020 to Q2 2021. With physical casinos being closed during the Covid-19 lockdown, virtual betting became the next best way for people to spend more time online.
Websites became a valuable target due to the high transactional volume across the platform. With customers making transactions multiple times in a day, it becomes more challenging to detect online fraud among the millions of transactions every day.
If you were scraping the internet to find all the key information about online betting frauds, and you found this link, then your research stops here!
In this blog, we will discuss the different types of online betting frauds prevalent in 2022, and how online gaming business owners can protect themselves and their customers from these threats.
Let’s dig in!
What is online betting fraud?
In simple terms, Online betting entails risk for both the parties involved, i.e., players and the betting establishment. For the player, the risk is losing all their money or being targeted by a scammer for their personal information. Similarly, for betting establishments, the biggest risk out there is getting defrauded. The only thing these business owners can do is be proactive and stay one step ahead of these fraudsters.
Online Betting platforms need to be aware of two types of online fraud- External and Internal. External fraud is when the scammer targets an online betting business in search of credit card or social security numbers. On the other hand, Internal fraud is when an employee of the betting operator targets its customer in search of confidential information. In a nutshell, A scammer could be someone outside the business or someone who is closely related to the business, such as an employee. The burning question that comes to mind here is ‘How do these fraudsters orchestrate these scams?’ This is the most important piece of information to understand for a betting platform to perceive the risks involved. We are summarizing the latest ways or techniques used by fraudsters
Gnoming (Multi-accounting):
Scammers pretend to be someone else and create multiple accounts to take advantage of bonuses and offers on the online betting platform. They use distinct identities and morphed IP addresses without raising any flags for the bookmaker.
Chip Dumping:
The scammers intentionally lose all their money to a second account owned by themselves, This is done to take advantage of bonuses and clean up dirty money from credit card frauds.
Bonus Abuse:
Fraudsters might misuse the joining bonus feature provided by many online betting websites and use multiple accounts and email addresses to get unlimited joining bonuses or perks and resell them to the highest bidder.
Chargeback Fraud:
When a legitimate customer tries to claim a fake refund for a transaction to recover spent money. This can be misused by people who have lost a large sum of money and might lead to some heavy bank charges for the online platform.
What can you do as an online betting business owner?
Although we see an increase in online betting fraud in recent years, there are a few crucial steps Casino operators can take to provide their customers with a safe and seamless experience.
Know-Your-Customer:
The best way is to keep track of your customer details and what accounts they are using so that you can track their activities and verify their identity. With the customer’s consent, IP address tracking, two-factor authentication, and fingerprint access can help in establishing a unique and authentic identity. The Casino can also confirm the CVV every time a credit card is used and lockout underage users with age verification software.
Use Fraud prevention software:
Fraud prevention software leverages advanced technology such as AI to identify accounts with suspicious activities and help track their transactions, to trace back in case of any fraud. This software will segregate your potential scammers into High risk, High transaction volume, and BOT sign up categories and help you identify at-risk players faster and more efficiently.
Responsible gaming has become an integral part of the industry with stricter rules and regulations being formed to overlook casino activities which have pushed these establishments to accept more responsible gaming ethics. With the current advancement in technology, there are various platforms in the market that enable end-to-end security protocols for online gaming activities.
For online betting business owners, it becomes necessary to invest in platforms that will help in strategic, tactical, and operational decision making for your Gaming business and offer customers a safe, seamless experience. To find the right platform, one needs to start by assessing whether the business needs such a platform. If yes, what should be the non-negotiable features in such a platform—scalability, performance, or just security.
