In the world of gambling, the challenge of beating the house has captivated people for centuries. However, the gambling industry continues to battle with fraudsters who exploit bonus programs, causing significant financial losses. This issue is particularly prominent in the tech-innovation sector.
The reputation of the gambling industry as a whole often encourages opportunists to engage in unethical behavior. Stories of fraudsters outsmarting the industry, similar to what is seen in movies like Ocean’s Eleven, are admired for their cleverness and defiance against the system. These actions are sometimes even viewed as an intellectual battle against capitalism.
One recent case in the UK involved Jonathan Howard, a husband and parent who was jailed for his fraudulent activities. Interestingly, Howard might not perceive his actions as inherently wrong. This moral ambiguity, combined with the potential for significant financial gains, motivates individuals to push the boundaries and exploit vulnerabilities in the system.
Despite the availability of fraud detection and verification tools, the countermeasures against bonus abuse in the industry continue to struggle. One secret of fraudsters is that they have found ways to bypass the security solutions deployed by operators. For instance, common security defenses like device fingerprinting have limitations that allow fraudsters to scale their activities using multiple identities and devices.
Verification processes, while vital for protecting against fraud, also pose challenges for user experience and cost-efficiency. Background verification methods are susceptible to scraped and stolen data, while the use of Social Security numbers has proven ineffective due to data leaks. Fraudsters can exploit the practice of document upload upon withdrawal by colluding and using sophisticated forgeries, bypassing verification measures.
Advancements in artificial intelligence (AI) have made it increasingly difficult to detect such forgeries. AI-driven technology can animate still images to fool even the most secure liveness checks. This constant battle between fraudsters and security systems has created a technological arms race.
The introduction of digital wallets and virtual cards has significantly changed payment-based risk management in the gambling industry. Previously, requiring unique payment cards presented a formidable barrier against multi-accounting. However, virtual cards and digital wallets have made it easier for fraudsters to create multiple accounts linked to a single wallet.
Addressing the issue becomes complex as blocking virtual cards risks alienating genuine customers and goes against the trend of banking innovation and consumer privacy demands. While potential solutions like blockchain-based digital identities exist, they still do not fully eliminate the challenge posed by fraud syndicates.
Fraud syndicates often recruit individuals to exploit bonuses, providing them with guides on how to take advantage of offers and taking a cut from the winnings. This setup makes it difficult to trace correlations between individual players due to the use of different devices, IPs, cookies, browsers, and payment methods.
Existing risk mitigation products used in the industry generally neglect gameplay analysis, which is unique to the gambling sector. Analyzing gameplay is crucial for identifying bonus abuse and cheating. Operators need to enhance their capabilities in analyzing gameplay risks and break down the silos between risk teams and customer relationship management (CRM) teams.
In conclusion, while risk solutions are necessary for dealing with fraud in the gambling industry, none of them currently offer a complete solution. A comprehensive approach requires device fingerprinting, verification, payment analysis, and gameplay analysis. Operators must prioritize gameplay risk analysis and improve collaboration between risk and CRM teams to effectively detect and prevent bonus abuse.
