Online Gambling Survey Report
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Fraud impacting the business
Detecting more fraud at the first point of customer contact – registration – alleviates the burden
on fraud detection at later points in the journey.
But even with a best case of 90% of fraud being stopped, there is still 10% getting through the
system. According to our experts, the top three areas where fraud is impacting the business are
bonus abuse, account takeover and ID theft.
Bonus abuse
There is little data from trade bodies on the proliferation of bonus abuse within online gambling,
but operators across the industry continuously cite bonus abuse as a top business concern, as
highlighted in our own survey results.
The practice of multi-account betting, or “gnoming”, is prohibited by most operators and is
clearly outlined in the terms and conditions. To ensure customers enter their genuine details
and not that of an alias many have enacted the
“one account per household, IP address and
access device” requirement.
However, this policy does have its downside.If
you live in a flat-share or have a spouse with an
account on the same gambling site, for example,
it could lead to a potential ban or worse, a
loss of winnings or deposits. Additionally, this
prevention may cause a loss of revenue for
the owners of the site, causing a false positive
and preventing genuine customers from
taking part.
Many operators suffer as customers share
their personal documents used in the Know
Your Customer (KYC) onboarding process
with fraudsters in exchange for money. The
fraudster then uses the customer’s identity to
reap the benefits of bonuses that the customer
would otherwise receive. By doing this, bonus
abusers can use the identity of many customers
and collect the winnings generated without
having to invest their own funds.
Many of those committing bonus abuse will be
repeat offenders. They often work together to
commit their fraud, using various tactics and
methods to go undetected. Although they can
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Online Gambling Survey Report
target any operator, the biggest impact will always be felt by smaller operators as they often
have to provide the same generous bonuses to compete with larger rivals, but they don’t have
the capacity to absorb the lost funds or to prevent it in future. This vulnerability, of course,
attracts further abuse down the line.
Account takeover
In addition to bonus abuse, our ongoing conversations with operators and industry experts
have identified two distinct types of account takeovers as being of serious concern.
Many of our contacts mentioned VIP account takeovers, where a fraudster will gain access to the
account and withdraw all funds to their account or use it to funnel money from illicit sources.
The second type of account takeover is when a fraudster uses stolen credentials to create or
maintain a new account.
Regardless of the type of takeover, fraudsters have a large range of methods for acquiring these
details, either by purchasing credentials or hacking public Wi-Fi networks. This means operators
need a wide range of tools for spotting and acting on this type of fraud.
ID theft
Both account takeovers and bonus abuse can
occur when a fraudster uses stolen credentials
and sometimes this can include cases of ID theft.
In most cases of potential ID theft in the online
gambling customer journey, indicative high-risk
or fraudulent behaviour is either identified at
registration, if using Emailage, or is spotted at
the deposit/withdrawal stage. With the new UK
Gambling Commission requirements this must
happen almost instantly, because operators
are required to establish identity prior to any
gambling taking place.
Our experts said that ID theft is a large business
concern for several reasons, including the cost
of manually verifying identity and determining if
the customer is genuine or using fake details at
somewhere along the registration process.
Detecting ID theft is undoubtedly one of the
more costly parts of the online gambling
industry, but with the new regulation new
innovations and integrations are likely on
the horizon. This will make the process more
accurate and cost efficient.