Online Gambling Fraud Prevention

Imagine this: Your online gambling platform is thriving, players are engaged, and everything seems perfect. 

Suddenly, you notice unusual activity - multiple new accounts from the same IP address, large amounts of money moving in and out rapidly, and unexpected spikes in winnings. These could be signs of online gambling fraud, a menace that threatens not only your platform but also the trust and loyalty of your users.

In 2023, the fraud rate for gambling and betting companies rose to 7.6%, up from 4.2% in the previous year, representing a massive 80% increase in fraud​. The online gambling market is booming, valued at $90 billion in 2022 and projected to reach $153.57 billion by 2030, driven by the increasing adoption of smartphones, with 80% of users accessing platforms via mobile devices.

But don't worry - with the right tools and strategies, you can protect your platform and ensure a safe, enjoyable experience for your users. We’ll explain how in this article.

So, what is gambling fraud?

Simply put, online gambling fraud is any deceitful activity designed to cheat an online gambling system. There are various types of gambling fraud, each posing unique challenges:

• Fake accounts: Fraudsters create multiple fake accounts to exploit bonuses, manipulate outcomes, or engage in money laundering. By setting up numerous accounts, they can exploit welcome bonuses and promotions repeatedly, draining resources meant for genuine users.
• Identity theft: Using stolen identities to access accounts and withdraw funds illegally. Fraudsters steal personal information to create or take over accounts, making unauthorized withdrawals, and causing financial losses and reputational damage.
• Collusion: Groups of players colluding to manipulate game outcomes and winnings. This involves players working together to influence the outcome of games, ensuring that winnings are distributed among the colluders at the expense of legitimate players.
• Chip dumping: Losing chips on purpose to another player in order to transfer funds illegally. This is a method often used in poker, where a player intentionally loses to a confederate to move money illicitly.

The impact of online gambling fraud

The impact of gambling fraud on online platforms can be devastating. Financial losses are the most obvious consequence, but the damage extends far beyond this. Trust is a crucial element in the online gambling industry. When fraudsters exploit your platform, it undermines the trust of your genuine users, leading to a loss of customer loyalty and a tarnished reputation. Additionally, it can be resource-intensive, requiring significant time and effort to identify, investigate, and mitigate fraudulent activities.

Notable examples of gambling fraud in the news

Gambling fraud continues to make headlines, highlighting the ongoing battle between platforms and fraudsters. Recently, in Ohio, a federal grand jury indicted several individuals for operating illegal gambling businesses and related offenses, demonstrating the need for vigilant monitoring and enforcement​. 

Another notable case involved a significant raid in Texas where authorities detained suspects involved in illegal gambling operations, seizing gambling equipment and funds​. 

How to watch out for gambling fraud on your platform

• Monitor unusual activity: Keep an eye on unusual patterns such as frequent deposits and withdrawals, multiple accounts from the same IP address, or sudden spikes in winnings.
• Implement strong identity verification: Ensure robust identity verification processes to prevent identity theft. Use advanced techniques like biometric verification and multi-factor authentication.
• Regular audits: Conduct regular audits of your platform’s transactions and user behaviors to detect anomalies and patterns indicative of fraud.
• User education: Educate your users about the common types of gambling fraud and encourage them to report any suspicious activities.

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Online gambling fraud prevention with AI

With the scale of online gambling fraud increasing dramatically, traditional methods of detection are resource heavy and no longer sufficient. To automatically detect and effectively mitigate such fraudulent activities requires advanced AI technology, such as Pasabi’s. Using our AI & behavioral analytics platform you can:

Detect fake accounts: Online gambling platforms often face the issue of fake accounts being created to exploit bonuses or manipulate game outcomes. Using advanced AI and behavioral analytics, we identify non-genuine behaviors and suspicious patterns of activity. This helps in detecting fake accounts early and preventing them from causing harm. Our algorithms analyze user behavior to distinguish between genuine and fraudulent activity, ensuring that only legitimate users are able to participate.

Understand the scale: Our insights into user behaviors help gambling platforms understand the scale of the challenge. We provide a clear picture of the extent of fraudulent activity on your platform. By analyzing large datasets, we can identify trends and anomalies that may indicate fraud, giving you a comprehensive and holistic overview of the risks you face.

Identify fraud rings: Fraud rings are a significant threat to online gambling platforms. With our cluster technology, we uncover patterns in the data, identifying connected accounts and fraud rings. This is crucial in stopping fraudulent activities and ensuring fair play. By mapping connections between users, we can reveal complex networks of fraudsters working together to exploit your platform.

Continually monitor your platform: The nature of online gambling requires continuous vigilance. Pasabi's system continually monitors your platform to spot emerging threats. This proactive approach ensures scam activities are detected before they can escalate. Continuous monitoring means that new fraud tactics can be identified and countered in real-time, keeping your defenses strong.

Enforce with confidence: With solid evidence provided by our detection technology, you can take effective action to keep your platform and users safe. We provide the data you need to make informed decisions, supporting your enforcement actions with clear and actionable intelligence.

If you’re an online gambling platform looking to enhance your fraud prevention measures, contact Pasabi today. Discover how our cutting-edge AI technology can fortify your platform against scammers and protect your users from online gambling scams.