An alarming growth in fraud is experienced with 68.6% in iGaming and 29.4% in gambling within the years 2019 - 2021 across the world.
The advancement in technology has led to the growth of the iGaming industry but along with it fraudulent attempts by fraudsters have also evolved and increased by a staggering 400% a year wherein the ratio of growth is merely 10%. Fraudsters are marching faster to match the speed of developing technology.
There are online gaming companies that have suffered tussles with hackers and fraudsters. The DraftKings conceded nearly $300K and walloped around 48K client accounts exposing them to credential thefts. Unwavering rise has been experienced in harmful bot traffic leading to 32% in 2023 from 23.6% in 2013. Strikingly, the gaming industry suffers the most harmful bot attacks reported at 52.7%.
iGaming Fraud: Brief Overview
Any attack against the iGaming operations, and other online games like betting and casinos, where fraudsters use specific methods to attempt to abuse, corrupt, or exploit the gaming platform by finding loopholes, is known as iGaming Fraud.
Frauds put the industry’s reputation at stake. They leave a severe impact on players' gaming experience and devastatingly compromise the security and player's trust. The need for constant technology upgrades always stands considering the dynamic nature of iGaming frauds. Consistency in sustaining highly protected fraud prevention measures allows for securing the interests of genuine players and operators.
Massive business growth is derived from the digitization of gaming and gambling, transforming the iGaming industry into a huge, expanding, $92 billion market comprising tremendous opportunities for businesses and fraudsters alike.
Types of Frauds in iGaming
Multi- accounting fraud: Multiple accounts are created by players in the name of their friends and family but the sole person using the account is them. These are referred to as ‘ghost profiles’, deployed to manipulate data or place bets within games, exploit sign-in bonuses and offers, share points and stolen credentials containing payment details, or pursue the winning position in the game by breaching the game regulations
Bonus abuse: Every new account, whether fake or not, is liable for offers like registration bonuses, coupons, and more. These promotional offers entice plenty of players to the platform. However, these offers can become extremely stressful financially if not limited to a certain level. Bonuses credited into an account can only be used once for which fraudsters create multiple accounts to enjoy the fun of repeated bonuses.
Account takeovers: Account takeovers by fraudsters are to acquire access to legitimate player accounts and make unwavering transactions. These affect the platform security leading to embezzling funds and ruining players' credibility in the business. Moreover, the latest study for Sift discovered that 78% of consumers would relinquish a brand because of an account takeover.
IP spoofing: Worldwide gaming tournaments are held online in various countries or region-specific and to participate in these tournaments various fraudulent players use spoofers to mask IP location giving them access to be a participant. These interruptions impact the credibility and growth scale of the same in the market.
Botting: Fraudsters find loopholes in the game or use bots to boost their performance in the game and ruin the experience of other gamers who give their 100%. Bots are easily able to gather resources to boost the game's play unfairly as it is considered illegal.
How Sign3 Combats Online Gambling and iGaming Fraud?
AI and ML technology should be an integral part of the strategies. Mitigate the risk that merges the AI-driven analytics and ML system rendering hefty and vast data enabling spot multi-accounting behaviour and other fraudulent attempts. Following are the additional techniques SIgn3 would implement to combat fraud:
Use of AI and Machine Learning: AI and ML algorithms can analyze vast datasets and identify patterns of abuse. These technologies can adapt and evolve rapidly, detecting new tactics fraudsters employ to ensure that prevention and detection strategies remain effective.
Device Intelligence: A cutting-edge anti-fraud approach, device intelligence analyzes thousands of real-time data points to detect and prevent fraud, including scrutinizing hardware and software configurations across desktop and mobile devices and user behaviors to uncover patterns indicative of fraudulent activities. Device intelligence also enables the continuous monitoring and dynamic analysis of data points to safeguard online transactions and interactions.
Digital Footprinting: involves collecting and analyzing information generated by an individual’s online presence and activities, utilizing real-time data and a broad spectrum of social and digital signals. This layer of fraud prevention puts together a social profile by using data already collected during onboarding processes, like a phone number and email address. It can enhance the validation of customer details, allowing for more effective and efficient differentiation between legitimate and fraudulent transactions.
By implementing a multi-faceted approach, operators can detect and address multi-accounting efficiently, protecting their platforms from abuse while maintaining a smooth and secure user experience.
Real Time Data Analysis: Gathering comprehensive user information during account registration and analyzing this data can reveal connections between accounts, helping to detect and prevent gnoming practices.
Custom Risk Rules: Develop specific risk rules to detect patterns and behaviors typical of gnoming, such as shared device or browser data, similar betting patterns, similar password hashes, or irregular account activity. These rules can help identify potential gnoming activities early in the user journey.
IP Tracker: Detect the IP address of the player to track their geolocation and ensure no discrepancies are found in the mentioned location and the actual IP address identified. Fraudsters try to access players' accounts from various locations to participate in tournaments and avail bonus offers illegally.
Regular Security Audits: Regular audits to ensure the game is functioning according to the compliance and code of conduct. Regular Upgrading of security measures to identify any security drawbacks or loopholes enabling the fraudster access to user accounts.
Prevent Fraud with Solutions curated by Sign3 iGaming Industry Experts
Sign3 embarks on a journey of delivering robust class security for the platforms to enhance their user experience by excelling in fraud prevention and risk operations through insights driven by AI and real-time analysis of the account from machine learning-based systems to facilitate the detection of potential frauds without harming the player's experience.
About The Author
Arvinder Singla is the Co-founder & CEO of Sign3. With extensive experience in the gaming and fintech industries, he has been at the forefront of innovating fraud prevention solutions. His expertise drives Sign3's mission to deliver cutting-edge technology that safeguards businesses from evolving fraud threats.