Dmytro Ternovyi
Online marketing enthusiast and technology writer
Business

Spotting and Stopping Online Gambling Fraud

There’s no denying it: Online gambling is big business.

In fact, it’s projected to be worth over 66bn USD by the year 2020. And with such a hefty valuation attached, it’s little wonder it has become something of a beacon for fraudsters.

Gamblers can now access games 24/7, 365 days a year, and this leaves them – and online gambling sites – open to losing more than just bets. Huge sums of money are at stake should these sites, and their patrons, let down their guard.

In this article, we’ll discuss some of the most prevalent online gambling fraud techniques, and the ways in which they can be prevented.

The Cost of Online Gambling Fraud

Last year, in the UK alone, almost 11bn GBP (13.5bn USD) was lost to fraud and cybercrime.

For online casinos, the ramifications of not proactively identifying fraudulent activity on their platform can be quite devastating.

Clearly revenues will be harmed, and money will need to be spent to patch their defensive frailties when the fraud is uncovered.

But there’s also the short and long-term impact on the brand to be taken into consideration; many simply will not recover if they lose the trust of their customers. Memberships will be cancelled, advertising opportunities will dwindle, and attracting new customers will become harder than ever before.

Any online gambling company – or any online company, period – that suffers from fraudulent activity on its platform must act fast to remedy the situations. And as with almost anything, prevention is often better than a cure.

Online gaming merchants have to invest large sums into fraud detection to avoid the detrimental impact cybercrime brings.

Types of Fraud

In real-world casinos, they can often see the fraudsters coming.

From the morally questionable card counters, to the downright dirty cheats, pit bosses are trained to spot the bad eggs and have them quickly removed from the premises.

But online it’s a different story.

Cybercriminals can be active 24/7, from thousands of miles away. They’ll use different tricks and techniques to bypass passwords and gain access to customer accounts, draining funds and leaving a wake of digital destruction in their paths.

This undesired behavior comes in many forms. From brass-necked opportunists and those with gambling problems trying to take advantage of the free bonuses being offered as an incentive to open an account, to career criminals looking to sign up with stolen identities, online casino security has never been more important.

In fact, the latter issue of stolen IDs puts online gaming companies under a great deal of pressure. When a large network is breached and records are leaked, the dark web sweeps up these credentials with a view to either selling them, or using them to commit fraud.

Online gaming platforms are therefore used as means of testing the validity of these records via automated bots and scripts, which results in traffic spikes that can overwhelm servers and knock sites offline.

It’s therefore crucial that detecting and separating the good users from the bad is a major part of the strategy for protecting an online casino and its legitimate customers. Which leads us nicely on to…

Preventing Fraudulent Behavior

With so many varied techniques being employed to defraud online casinos, it’s fundamentally important that gaming companies are giving themselves the best shot at preventing cybercrime.

For starters, merchants must make sure that their registration process is rock solid. This acts as a gateway into the platform, screening, authenticating, and verifying users.

Relevant information must be gathered at this point, allowing the merchant to properly identify users. In other words, are they who they say they are?

This typically requires ascertaining age and address, and even credit scores from third party services.

Another option open to online casinos is to utilize the very device many of their users will gamble on: The smartphone. Using phone verification, gamers and merchants can make sure transactions and changes to account information are validated.

Moving away from automated checks, online casinos can also employ manual checks. Agents are tasked with investigating suspicious activity based on unusual gambling patterns, customer tips, and in-platform alerts.

The alerts are usually pre-determined rules, based on past experience of fraud, helping the agents pinpoint particularly nefarious activity and quickly moving to put a stop to it.

And of course, there’s always the option of limiting the number of credit cards that can be associated with a single account.

Advanced Fraud Detection

The previously mentioned fraud prevention techniques should, by and large, be implemented by all online gambling companies.

But for those with the resources at their disposal, there are a number of more advanced options available.

For instance, device fingerprinting can be used to look into the historical activity of a particular mobile, tablet, or desktop device, and determine whether or not it’s part of a larger network with criminal intent.

Risk scoring can also be used to try and profile and categorize behavior in an attempt to determine if it is fraudulent, while AI (artificial intelligence) is being utilized to develop a means of predicting and preventing illegal trends.

In short, these various prevention measures must complement one another as part of a wider, end-to-end system so as to effectively identify and stop cybercriminals from engaging in widespread fraudulent activity.

How Can BetOnVR Help?

The online gambling industry is booming, and it doesn’t look like it’s going to slow down anytime soon.

That’s why it will continue to attract fraudsters like a moth to a flame.

Add to that the fact that Virtual Reality is growing alongside online gambling, with the two industries on a collision course that will result in a massive increase in user numbers and revenues, and you’ll soon see why online casinos are so keen to stay on top of their security.

If you have designs on joining these existing gambling platforms, or if you’re looking to augment your platform with its own VR features, it’s important that you implement the correct fraud prevention measures.

Our team of experienced custom app developers will help you do just that, making sure you launch a safe and secure VR gambling product that works from the word go.

Now is the time to bet big on Virtual Reality – contact us today to get started.