Navigating the complex world of online gaming is no easy task for operators. Whether it’s account takeovers, affiliate fraud, money laundering, or promo abuse, the risks are high. What makes it trickier is the potential for operators to mistakenly label genuine players as fraudsters, causing damage to their brand reputation, increasing customer turnover, and raising acquisition costs. So, how can operators easily distinguish a real player from a bad actor?

To dive deeper into these fraud trends and how they’re impacting iGaming businesses, Sift recently hosted a roundtable discussion with a panel of industry experts. During the webinar, Brittany Allen, Trust and Safety Architect at Sift, was joined by Melanie Ellis, Partner at Northridge Law LLP; Ozric Vondervelden, Co-Founder at Greco; and Matthew Curtis, Head of Responsible Gaming at L&L Europe. They discussed how the best in the business keep the friendly players playing, and the fraudsters at bay.

Identifying factors for friend or foe

The discussion on early warning signs for identifying potential fraud stood out as a key highlight. Gaming operators face various types of fraud that can threaten the integrity of their platforms and compromise financial transactions. They must remain vigilant for red flags like unusual payment behaviors, KYC challenges, irregular gameplay patterns, and the use of automated bots.

“For account takeovers, we have a pretty strong emphasis on used devices, IPs, and behavioral data. Take for example someone’s average deposit sizes or methods. As well as the gameplay behavior or what they do, what they usually play, when, and how. We start looking for anomalies and we’ll find them pretty quickly,” said Matthew Curtis.   

The rise of AI-facilitated bots amplifies concerns, as fraudsters now wield tools once exclusive to operators, complicating detection with intricate schemes. As AI advances, fraudsters are getting better at using it for malicious purposes, heightening challenges in combating these illicit activities.

Vondervelden emphasized this democratization of technology, stating, “AI seems to be pretty democratized, and as it’s advancing, the fraudsters have the same tools as operators.”

These technological shifts impact businesses in real-life scenarios. Fraudsters will continue to automate and scale their attacks, but this doesn’t mean there aren’t preventative measures businesses can put in place to detect evolving fraud patterns. Sift’s strategy in tackling promo abuse, affiliate fraud, and money laundering involves understanding the unique traits of legitimate players.

“If you just latch on to one particular signal or indicator of fraud, and think that’s what fraud looks like on your platform, you will miss those changes or developments as fraud continues to have to work against the roadblocks we put in front of it,” said Allen. 

Identifying potential fraud entails recognizing indicators like card testing, copy-and-paste login attempts, identical card BINs, text reuse, chargebacks, and withdrawing 100% of an account’s balance. These signals play a pivotal role in differentiating between legitimate players and potential fraudsters in the iGaming industry.

iGaming fraud has expensive consequences 

In the fast-paced world of iGaming, the need for cybersecurity is urgent. Cyberattacks are escalating, with the 2023 World Economic Forum’s Global Risks Report listing cybersecurity among the top 10 global risks. iGaming fraud poses a significant threat, from revenue loss to compliance penalties, as the industry is an attractive target for fraudsters aiming at digital goods, including cashout fraud. The projected annual cost of cybercrime is set to reach $10.5 trillion by 2025, heightening the importance of robust defenses in the industry.

Not all fraud prevention methods are the same, and fraudsters know which ones are easier to exploit. With the iGaming industry growing quickly, there are new chances for fraudsters to work together, as Allen points out:

“We’ve even seen cooperation in some cases, like looking at the type of fraud that targets online banking and crypto. They’ve worked together to, let’s say, target a cryptocurrency account on an exchange, move those funds into a new bank account, and then a fraudster who is a specialist at withdrawing the funds from said bank account, maybe in person, or maybe online, they work together and split the profits at the end because they couldn’t have accomplished that without the cooperation.”

Within the iGaming industry, operators and analysts are equally focused on managing reputational risks, as being featured in fraud-related headlines is a genuine concern. Companies must establish robust standards on their platforms to ensure the safety of their business and customers. Curtis emphasizes the importance of having a solid support system:

“If you do have a good team around you, good systems surrounding that team, whether they be internal or external, you should be able to avoid the headlines for the most part. We might be a testament to that.”

To address these challenges, implementing robust measures for fraud prevention is crucial. This not only safeguards the industry but also shields companies and players from the substantial costs associated with fraudulent activities. The rapid expansion of the iGaming sector offers numerous opportunities to explore strategies and identify vulnerabilities.

End-to-end solutions

Addressing fraud in the digital landscape demands a flexible and adaptive strategy. No singular solution can comprehensively manage all types of fraud, highlighting the need for a combined approach throughout the customer journey. While companies can address and prevent numerous cases, fraudsters adapt, leading to a continual cycle of fraudulent activities. Finding a proactive solution that covers the diverse tactics of fraudsters poses a considerable challenge. 

Companies require a comprehensive solution for the entire customer journey, encompassing account creation, preventing promo abuse, mitigating account takeover (ATO) risks, and monitoring transactions. While current end-to-end solutions may work temporarily, the ever-changing tactics of fraudsters require ongoing adjustments to strategies.

Sift helps leaders in the iGaming industry secure payments during massive sporting events and help them expand into new markets. In fact, the top iGaming companies that account for 75% of the U.S. market rely on Sift to gain a competitive advantage. Globally, Sift secures more than $45 billion in iGaming and online gambling annually, representing 468 million transactions.

Learn more about how Sift can help your iGaming business secure transactions, improve the player experience, meet regulatory requirements, and help you expand securely into new markets.

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*** This is a Security Bloggers Network syndicated blog from Sift Blog authored by McKenzie Gladney. Read the original post at: https://blog.sift.com/key-takeaways-from-sifts-live-session-with-igaming-business/?utm_source=rss&utm_medium=rss&utm_campaign=key-takeaways-from-sifts-live-session-with-igaming-business