Online gambling fraud prevention: Protect your Sports Betting and iGaming business’
The online gambling industry was a $93 billion market in 2024, one set to reach $172.8 billion by 2033, driven by factors like legalized betting in new markets around the world.[1] This is a powerful opportunity as a Sports Betting or iGaming company operator, but also a major source of risk: When financially motivated criminals see a growing digital industry, they begin planning new fraud and theft tactics.
As online gambling grows and expands to new markets, the industry faces a few important challenges. Protecting player accounts requires unfailingly reliable and resilient digital systems, and any failure to safeguard funds or personally identifiable information can bring both regulatory compliance issues and a devastating loss of trust from players.
What types of fraud affect the Sports Betting and iGaming industries?
Some risk to your business comes from the fact that there are many different potential ways to defraud or steal from an online gambling organization. You need to safeguard every piece of your infrastructure from fraud tactics and attack types including promo abuse, account take over (ATO’s), payment fraud and chargebacks:
New account fraud (account opening fraud): New account bonuses are one of the most common promotional tactics used by online gambling sites. This promotional tactic opens up an avenue for fraudsters to create fake accounts using stolen or synthetic identities and redeem multiple sets of rewards intended for legitimate new users.
Account takeover fraud: New account creation isn’t the only vulnerable part of account management. Fraudsters can take unfair advantage of users’ accumulated balances by stealing existing accounts through methods like credential stuffing.
Chargeback fraud and abuse: Abuse of the chargeback system can take a few forms. For example, a player experiencing buyer’s remorse may falsely claim that a transaction was fraudulent in order to receive an illegitimate refund, this is an example of a first-party abuse. Alternatively, professional fraudsters may use the same tactic on a large scale, with the intention of defrauding your business.
Simultaneous account takeovers with bots: Digitally sophisticated fraudsters can expand their account takeover operations by utilizing large-scale bot networks and controlling more accounts, making their operations more profitable and harder to stop.
Multiple account fraud with bots: Bots can do more than take over accounts — they can also create new ones using vast amounts of information obtained from identity theft or data breaches. They can also abuse gambling site’s rules by exploiting promotions intended for individual users.
Repeated use of stolen credit card information: Organized criminal groups may use stolen credit card information by using it with multiple online gaming providers, taking advantage of their thefts.
Cash withdrawals of fraudulent funds: It’s very difficult to catch criminals who have used illegitimately acquired loyalty points or funds to gamble and have withdrawn the money as cash. By using fake accounts and stolen credit cards, money laundering fraudsters leave minimal traces.
30 US states have legalized online sports betting. Seven permit it, with others moving toward legalization with a different group remaining staunchly opposed.[2] Balancing the need to stay compliant with patchwork regulations and the constant risk of fraud is a complex task, but an essential one.
What’s the impact of fraud?
Fraud affecting your Sports Betting or iGaming, or other online betting business can have long-tail effects that go beyond the monetary loss of the initial event. Those upfront costs are serious enough, as lost revenue mingles with the costs of restoring players’ account balances and rebuilding your defenses.
Player trust is crucial for gambling sites. If people don’t consider your gambling platform to be a secure place to deposit their money, they will naturally choose to play at a competitor’s site in the future. It can be difficult to overcome this psychological barrier: if a player loses money due to a hack or account theft on your gambling platform, they may never come back.
The concept of creating a positive, and straightforward player experience should also influence how you set up your fraud detection platform. If your site has too many complex, difficult-to-navigate anti-fraud features, frustrated players may take their business elsewhere.
The ideal fraud detection solution involves creating the perfect level of friction: detecting subtle signs of potential fraud activity and allowing legitimate transactions to proceed without interruption. Your fraud detection platform can play a part in setting up this type of system.
How can fraud be detected and prevented with modern technology?
Implementing advanced platforms by comprehensive account protection and fraud detection is the primary way to move as fast as contemporary fraudsters. It will defend your users against their attacks. To prevent all types of fraud in iGaming, these solutions must be all-encompassing extending from end-to-end and protecting every stage of the user journey.
Contemporary platforms use advanced technologies such as machine learning (ML) to detect signals that would be extremely difficult for human employees to identify manually. These solutions automatically distinguish between risky transactions and safe activity using signals such as:
- User location.
- Device type.
- Behavior patterns.
Flagging and preventing high-risk transactions while passing medium-risk transactions on for further inspection, allows you to permit all other interactions with minimal interruption providing a smooth and player-friendly user experience.
Refresh your approach to stopping Sports Betting and iGaming fraud
Any Sports Betting or iGaming business or other online gambling service should aim to have an up-to-date account management and fraud prevention system in place, at all times. If you haven’t reviewed your readiness lately, it’s a good idea to do so now — there could be room for improvement.
Staying active in the ever-growing Sports Betting and iGaming industry means remaining compliant with various regions’ laws and maintaining a strong reputation with players. Keeping your systems free of fraud can be a key part of your strategy. Accertify’s solutions, designed by experts and infused with the latest ML technology, are your ideal option.
Learn how Sportsbet handled the risk of online gambling fraud or request a consultation and get your Sports Betting and iGaming business’s fraud prevention efforts moving at the speed of right.