Cybercriminals look to abuse or defraud gambling operators in online gambling fraud. Multi-accounting, affiliate fraud, money laundering, and gray areas such as arbitrage fall under the category of an online casino scam.
When online casino scam analysts discuss gambling fraud, we refer to any illegal or harmful practice or scheme employed by professional or amateur fraudsters to extract funds, bonuses, or other benefits from the iGaming company – and/or facilitate additional fraud.
Due to its sheer accessibility and the offline industry’s traditional ties with money launderers, online gambling attracts a great deal of fraudulent activity. But, equally, it attracts the attention of regulators and legislators, regardless of whether we’re discussing a poker room, online casino, slots website, bingo room, or bookmaker.
The Most Frequent Online Gambling ScamS
While fraudsters are constantly devising novel methods to exploit the system, there are a number of common attacks to be aware of.
Multiple account fraud is the foundation upon which numerous gambling attacks are constructed. In order to tilt the scales in their favor online, fraudsters create dozens, if not hundreds, accounts with fake credentials. These are used to facilitate schemes, including those listed below.
- Abuse of bonuses: Numerous fictional accounts receive new sign-up bonuses, coupons, and other attractive offers. While these promotions attract new players, your platform will quickly incur a loss if you distribute too many of them.
- Gnoming: Gnoming, or multi-accounting, is the practice of using multiple accounts to help a single player win. Other accounts are used to lose in head-to-head games so that one account can collect all the wins and bonuses. This frequently occurs in poker, for instance.
- Chip dumping: Another fraudulent practice at the poker table is chip dumping. Similar to gnoming, the objective is to create multiple accounts at the same table in order to cheat the system and manipulate the results in favor of a specific player.
- Credit card theft: Fraudsters use stolen card information to add funds to their account, allowing them to pocket legitimate winnings.
- Chargebacks: Once a stolen credit card has been used on your platform, the legitimate cardholder will realize what has occurred and request a chargeback from their bank. Unfortunately, this means they will receive a refund at the gambling operator’s expense and incur some processing fees…
- Abuse of phone top-up: If your online casino offers phone top-up, con artists can trick you into funding their accounts. This utilizes standard social engineering and phishing techniques to solicit phone payments from unsuspecting users. The payment is deposited directly into the account of the fraudster.
As with brick-and-mortar casinos, online casino owners must also ensure that their establishments do not attract money launderers. Any location that processes large amounts of money can be used to legitimize illegally obtained funds, criminals favor gambling establishments.
How to Prevent Online Gambling Scams
Following proper KYC (Know Your Customer) procedures is one of the most important ways for online business to prevent fraud. This will require a number of steps, including the most fundamental information during user registration:
- ID verification (depending on local legislation)
- Age verification (an important legal requirement)
- PEP (Politically Exposed Persons) check – a term typically referring to individuals with a prominent public profile, such as heads of state, ambassadors, high-ranking military personnel, etc.
During registration, you can evaluate a user’s intent and fraud risk using the following techniques:
- Device fingerprinting identifies software and hardware on the player’s device.
- Digital footprint analysis – valid emails and phone numbers are frequently associated with at least a few social media accounts and other online platforms, which reveals a great deal about their owner.
- Similar to device fingerprinting, an IP address can reveal a great deal about an individual’s internet usage, location, and the likelihood of engaging in fraudulent activity.
- Behavior and velocity checks – modules that examine a user’s actions at various touchpoints and compare them across time, e.g., to determine if many users have logged on with the same IP address in a short time.
Most of these steps can also be implemented at deposit, withdrawal, and other touchpoints to verify that the correct user is accessing the valid account. For instance, device fingerprinting and IP analysis can assist in identifying account compromises (whether credentials have been stolen or acquired through phishing attacks).
It is crucial to monitor the card information during account top-ups to ensure it has not been stolen or poses a high-risk threat.
How Does Fraud Impact a Gambling Website
Fraud has a harmful impact on online gambling sites. The disadvantages are fairly obvious and shared by all types of online businesses.
Loss of revenue is the first negative impact. Whether spending money on chargebacks, forfeiting bonuses, or spending time chasing bad players, fraud is expensive for operators.
A bad reputation with payment processors is yet another problem a gambling platform can have. Payment processors already view online gambling sites as high-risk. Suppose you fail to control your chargeback rates. In that case, you risk being banned from using their network, which would effectively destroy your business because players wouldn’t be able to deposit using their preferred method.
Consider all the hours your team must spend pursuing fraudsters and enhancing processes to reduce risk, and you’ll quickly realize that fraud causes more than monetary losses.
Fraudsters wreak havoc on your business processes, which is frequently reflected in the volume of customer service complaints. Your support team is responsible for resolving these complaints and can quickly become overwhelmed with requests.
It’s no secret that regulators are cracking down on online gambling websites. If you fail to identify fraudulent or self-excluded players, you could face hefty fines and even legal trouble. In addition, if you fail to resolve fraud issues for legitimate players, they will view your company in a less favorable light, if not leave for a competitor.
In terms of multiplayer games, the final point is particularly important. If online gambling sites that offer games such as online poker fail to control a online casino scam at the tables, they will quickly see a decline in the number of real users.
Importance of Casino’s Terms and Conditions in Scam Prevention
The importance of reading the casino’s terms and conditions has already been emphasized, particularly in terms of learning how to claim the bonus offers that the casino has in store for players. However, the casino’s terms and conditions cover a great deal more than just bonus terms. There is an abundance of additional information regarding the casino’s business practices, such as how it handles and protects your personal information and how you can make deposits and withdrawals, etc.
The casino terms and conditions merit a separate section in this review of scams because some casinos are also notoriously shady in this regard. Casinos frequently modify their terms and conditions without informing the player, which is one of the most common cons in this regard.
Consequently, you may enter a casino expecting one thing, only to experience the exact opposite. Unhappily surprised as to why this has occurred, you decide to check the terms and conditions, where you discover that the iGaming operator has changed them without informing you.
Obviously, this is not always bad, as the casino’s terms and conditions may occasionally change for the player’s benefit. However, this is no reason not to inform the player that the casino’s terms and conditions have changed overnight.
And frequent changes to the casino’s terms and conditions, particularly when the casino operator fails to notify players of said changes, reek of deceit and shady behavior. This is yet another reason why you should avoid these casinos. You can protect yourself from this scam by regularly reviewing the casino’s terms and conditions.
However, you should not be required to review the terms and conditions every time you want to enjoy some online casino gambling. This is why it is essential to consult outside sources and reputable review sites to determine whether a casino’s terms and conditions are frequently updated.
How To Avoid Becoming A Victim Of Online Gambling Frauds
If you’re an online casino user, there are proven ways to reduce chances of getting scammed online, here they are.
Most of us wouldn’t purchase a product or visit a restaurant without first conducting research. Regarding online gambling, which can involve thousands of dollars, it is crucial to conduct as much online research as possible.
A simple Google search should be sufficient. If a website is fraudulent, you will likely find reviews from experts, other users, or a message board thread. In contrast, if the online casino has received positive feedback, this is unquestionably a good sign.
Upgrade Your Computer and Virus Protection Software
Do not provide hackers and con artists with a backdoor to your online gambling account. There are tens of thousands of online scammers who wish to install spyware and ransomware on your computer.
You may be even more vulnerable if they are aware of your online gambling account. Nevertheless, antivirus software continues to evolve and improve. Therefore, simply updating your computer and antivirus software should eliminate any issues.
Deposit Some Money And Conduct A Test
Consider this money to no longer exist. If you are defrauded, it is a small lesson to learn. Instead of losing an entire bankroll, a small loss will be less painful. Next time, you can try to make a larger deposit if you enjoy the online casino’s offerings and find it to be trustworthy.
Read the Agreement Terms
Some online casino operators may state in their terms and conditions that they are fraudulent. If there are absurd withdrawal or verification requirements, the online casino is likely laying the groundwork for a scam. If you make a deposit at a website, you agree to the terms and conditions, read them beforehand.
Determine if they are governed
The majority of online casinos are regulated and licensed to operate. If there is no evidence that they are regulated and have a gambling license, it is a giveaway that they are not legitimate. And among the most prestigious iGaming licensing authorities are:
- The Great Britain Gambling Commission
- Maltese Gambling Authority
- The Curacao Gaming Commission
If we were to list online gambling scams that you could fall victim to, it would require an entire book. The number of gambling frauds continues to rise, and the frauds themselves are becoming more subtle and difficult to detect.
What Is Online Casino Scam – Conclusion
Fortunately, there are numerous resources that will help you with how to protect yourself from an online casino scam. And when you think about it, common sense goes a long way toward preventing fraud. If the casino does not have a valid license or if there are frequent reports that you should avoid it. This will prevent you from falling victim to fraud and save your personal information and money. Be cautious out there.