iGaming fraud prevention strategies

Implementing fraud prevention strategies can support regulatory compliance, minimize the risk of revenue loss, and help safeguard honest players from predatory fraudsters for iGaming businesses. Learn about the different types of online gambling fraud and the different strategies your team can implement to prevent them. 

What is iGaming fraud 

iGaming fraud is any activity that attempts to cheat or abuse the rules of an iGaming platform. The financial rewards on offer make iGaming an attractive target for fraudulent actors, who employ a variety of methods and tools to extract illicit gains.  

Research estimates that around half of all iGaming operators lose more than 10% of revenue to fraudulent activity, so it’s critical to understand how fraudulent actors operate and the anti-fraud measures that can be put in place.  

Gnoming  

Gnoming is another form of multi-account abuse, in which accounts are coordinated to bypass the rules. For instance, the operation of multiple accounts by a single player to manipulate the outcome of a game.

AML (Anti-money Laundering) and KYC (Know Your Customer) evasion  

AML (Anti-Money Laundering) and KYC (Know Your Customer) checks are designed to identify money laundering behaviour, such as suspicious transactions and the creation of multiple accounts. These checks require individuals to submit documents such as their official ID or utility bills, while companies continuously monitor transactions for unusual activity. Fraudulent actors may use fake documents or other means to bypass AML and KYC checks, allowing them to set up multiple accounts.

Friendly fraud (chargeback fraud)  

Chargeback fraud involves exploiting the refund terms of an iGaming platform. The typical pattern is that the player deposits funds, places their bets, and then disputes the charges so they can receive a refund.

Multi-accounting

Multi-accounting refers to any fraudulent activity involving the use of more than one account. It encompasses other types of fraud, such as bonus abuse, money laundering, or gnoming.

Online gambling fraud prevention strategies

Operators of iGaming platforms should implement a robust set of proactive and reactive fraud-prevention strategies to minimize fraudulent activity and associated revenue losses.

Preventing money laundering

Platform operators must comply with the relevant AML rules for their operating jurisdictions, including the use of KYC procedures where appropriate. In addition, platforms can implement transaction monitoring tools that can flag suspicious activities, such as unusual deposits or withdrawals, or high volumes of low-risk bets.

Preventing bonus abuse

There are several red flags that can indicate bonus abuse, and operators use them to detect and prevent it. Device fingerprinting and IP address monitoring can show if multiple accounts are generated from the same device or IP address. Multiple signups from similar email addresses are also a giveaway, as is the speed of signup and withdrawal, which can indicate that someone is not a genuine new user.

Preventing gnoming

Gnoming attacks can be detected in a similar way to bonus attacks, by identifying fraudsters who set up multiple accounts for coordinated activity. Devices that share the same network or appear to be acting in synchronization are indicators of gnoming activity.

Preventing AML (Anti-Money Laundering) and KYC (Know Your Customer) evasion

AML and KYC checks should be robust enough to verify the authenticity of identity documents and to check for consistency. For example, customers who provide payment information with a name different from the one on their identity documents, or those who attempt to submit documents with different names, should be flagged.

Preventing friendly fraud (chargeback fraud)

Operating a competitive chargeback policy is a must for reputable platforms, but this should also include measures to prevent chargeback fraud. Monitor for suspicious chargeback activity, such as repeated payment disputes or making deposits and chargeback withdrawals in quick succession.  

Businesses can also implement chargeback prevention measures to help avoid the financial pitfalls of navigating chargebacks.

Preventing multi-accounting  

Similar to measures addressing gnoming or bonus abuse, preventing multi-accounting involves seeking out instances of repeated user data that may indicate someone is setting up more than one account. Accounts using the same IP address, devices, payment methods, or other data across accounts are all red flags.  

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