As iovation’s Eddie Glenn heads to Macau for the MGS Entertainment Show, the premiere casino and gambling industry conference, now is the time to take a look at five key challenges that are keeping those in the online gambling industry up at night.
The world of online gambling attracts a mix of players—those just out to have a good time, but also individuals and groups who want to game the system by committing financial fraud or identity theft. Online gambling operators and platform providers have to stay on top the fraudsters to make sure a few bad eggs don’t take the fun away from those playing by the rules.
Here are five fraud tactics that give online gambling operators the biggest headaches:
1. Bonus Abuse
In bonus abuse, the online gambling company offers an incentive for a new player to play, or for a former player to return and play more. These often come in the form of a small amount of money (in gambling chips) to create a new account and play, or to reload an existing account and continue playing.
Unfortunately, some people scam the bonus or promotional offer, creating multiple accounts using different email addresses, variations of their name, false mailing addresses, and even playing from different devices. They then play the lowest risk games that pay out the most, potentially racking up huge wins. This ultimately costs online gaming companies profits and makes them hesitant to offer these incentives to fair players.
2. Player Collusion
With player collusion, players work together to game the system. Much as they do when playing in live casinos, they share information to manipulate the game and influence its outcome. A single person can even conduct a form of player collusion by playing in the same game using multiple accounts. These players rob others of a fair game, and also tend to work together to take advantage of bonuses and promotions.
A chargeback is money that a business—in this case, an online gambling company—pays to reimburse a credit card company or bank for a transaction that the cardholder disputes and that the credit card company or bank investigates and deems fraudulent. Fraudsters often attempt to get chargebacks for their original deposits when they have been identified as conducting bonus abuse or player collusion. The more chargebacks a casino has to pay, the bigger the dent in both its bottom line and reputation with financial institutions.
4. Account Takeover
In an account takeover, a player assumes the identity of another player and withdraws the winnings or deposits to their device. Organized crime rings often sell the compromised information of the victim, which can be obtained through large-scale password-cracking using bots, phishing schemes, and other means of compromising personal and financial information. Account takeovers cause honest players to lose confidence in the security of online gaming, leading them to shy away from playing.
Sometimes players voluntarily decide to exclude themselves from online gaming when they recognize that they can no longer gamble responsibly. In such cases, the online gambling company needs to prevent these “self-excluded” players from playing on their site in the future. This can be difficult when self-excluded players lose their resolve and sign up for multiple accounts, much as they do when abusing bonuses and promotions.
Fortunately, online gambling operators and platform providers can detect fraudsters more effectively by identifying devices from which players create an excessive number of accounts, patterns of behavior that indicate potential fraud, relationships between players that may reveal player collusion, and databases that inform them of fraudsters detected by other online businesses.