Fraud is a major problem in the iGaming industry. Fraudsters use a variety of methods to steal money from iGaming operators and players.
Some of the most common types of fraud in iGaming include:
- Account takeover: Fraudsters steal or buy login credentials for iGaming accounts. They then use these credentials to log in to the accounts and steal money.
- Bonus abuse: Fraudsters exploit loopholes in iGaming bonuses to claim bonus money that they are not entitled to.
- Chargeback fraud: Fraudsters make deposits using stolen credit cards and then file chargebacks to get their money back.
- Collusion: Fraudsters work together to cheat iGaming operators. For example, they may collude to win games or to manipulate the odds.
- Money laundering: Fraudsters use iGaming platforms to launder money from illegal activities.
iGaming operators can take a number of steps to prevent fraud, including:
Implementing identity verification (KYC) and anti-money laundering (AML) procedures
Identity verification (KYC) and anti-money laundering (AML) procedures are used by iGaming operators to verify the identity of players and to prevent money laundering. KYC and AML procedures are required by law in many jurisdictions, and they are an important part of responsible gambling.
Know Your Customer (KYC) is the process of verifying the identity of a customer. This is typically done by requiring the customer to provide identification documents, such as a passport or driver’s license. iGaming operators may also ask customers to provide proof of address and/or proof of income.
Anti-Money Laundering (AML) procedures are used to prevent money laundering. Money laundering is the process of making illegally-gained proceeds (i.e. “dirty money”) appear legal (i.e. “clean”). iGaming operators may use a variety of AML procedures, such as monitoring player transactions and reporting suspicious activity to the authorities.
iGaming operators should require players to undergo KYC checks before they are able to deposit money or withdraw winnings. This helps to ensure that players are who they say they are and that they are not using the iGaming platform to launder money.
Here are some examples of KYC and AML procedures that iGaming operators may use:
- Collecting personal information from players, such as name, address, date of birth, and contact information.
- Verifying player identity by requiring them to provide identification documents, such as a passport or driver’s license.
- Checking player names against blacklists of known criminals and money launderers.
- Monitoring player transactions for suspicious activity, such as large deposits or withdrawals.
- Reporting suspicious activity to the authorities.
Using fraud detection software
Fraud detection software is a type of software that is used to detect fraudulent activity. It can be used to identify a variety of fraudulent activities, including unusual betting patterns and multiple accounts from the same IP address.
Unusual betting patterns can be a sign that a player is trying to cheat. For example, a player might place a series of large bets on a particular event, and then withdraw their money immediately after the event ends. This type of betting pattern is often known as “matched betting”.
Multiple accounts from the same IP address can also be a sign of fraud. For example, a fraudster might create multiple accounts and use them to claim bonus money multiple times.
Fraud detection software can help iGaming operators to identify and block fraudulent accounts. This helps to protect iGaming operators from financial losses and to create a fair and safe gaming environment for players.
Here are some examples of how iGaming operators can use fraud detection software to prevent fraud:
- Monitoring player betting patterns: Fraud detection software can be used to monitor player betting patterns for suspicious activity. For example, the software can look for players who are placing a large number of bets on a particular event or who are withdrawing their money immediately after an event ends.
- Identifying multiple accounts from the same IP address: Fraud detection software can be used to identify multiple accounts that are being used from the same IP address. This can help to identify fraudsters who are trying to create multiple accounts to claim bonus money multiple times.
- Detecting other types of fraudulent activity: Fraud detection software can also be used to detect other types of fraudulent activity, such as account takeover, money laundering, and collusion.
Educating players about fraud
Educating players about fraud is an important part of preventing fraud in the iGaming industry. Players who are aware of the risks of fraud are less likely to fall victim to it.
iGaming operators can educate players about fraud in a variety of ways, including:
- Blog posts: iGaming operators can write blog posts about fraud and how to protect against it. These blog posts can be published on the iGaming operator’s website and shared on social media.
- Social media posts: iGaming operators can post about fraud on social media platforms such as Twitter, Facebook, and Instagram. These posts can be used to raise awareness of fraud and to provide players with tips on how to protect themselves.
- Email campaigns: iGaming operators can send email campaigns to their players about fraud. These email campaigns can provide players with information about the different types of fraud and how to avoid it.
In addition to educating players about fraud, iGaming operators can also help to protect players from fraud by implementing KYC and AML procedures and using fraud detection software.
Here are some examples of topics that iGaming operators can cover in their educational materials about fraud:
- Different types of fraud: iGaming operators can teach players about the different types of fraud that can occur in the iGaming industry, such as account takeover, bonus abuse, chargeback fraud, collusion, and money laundering.
- How to protect against fraud: iGaming operators can teach players how to protect themselves from fraud by using strong passwords, enabling 2FA, being careful about what information they share online, and only playing on trusted iGaming websites.
- What to do if you suspect fraud: iGaming operators can teach players what to do if they suspect that they have been a victim of fraud, such as contacting the iGaming operator’s customer support team and reporting the fraud to the authorities.
Here are some additional tips for preventing fraud in iGaming:
- Use strong passwords: Players should use strong passwords for their iGaming accounts and change their passwords regularly.
- Enable two-factor authentication (2FA): 2FA adds an extra layer of security to iGaming accounts. iGaming operators should encourage players to enable 2FA on their accounts.
- Be careful about what information you share: Players should be careful about what information they share online, especially on social media. Fraudsters can use this information to steal identities and to create fake iGaming accounts.
- Only play on trusted iGaming websites: Players should only play on iGaming websites that are licensed and regulated. Players can check the licensing status of an iGaming website on the website of the gaming authority that issued the license.
By following these tips, iGaming operators and players can help to prevent fraud in the iGaming industry.
Here are some examples of how iGaming operators are using technology to prevent fraud:
- Using artificial intelligence (AI) to detect suspicious activity: Some iGaming operators are using AI to detect suspicious activity, such as unusual betting patterns and multiple accounts from the same IP address. AI can be used to analyze large amounts of data quickly and efficiently, which can help to identify fraudulent activity that would be difficult to detect manually.
- Using blockchain technology to verify player identities: Some iGaming operators are using blockchain technology to verify player identities. Blockchain technology is a secure and tamper-proof way to store data. This makes it ideal for verifying player identities and preventing fraud.
iGaming operators are constantly developing new and innovative ways to prevent fraud. By using technology and by educating players about fraud, iGaming operators can help to create a safe and secure gaming environment for everyone
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