How Can Digital Signals Enhance iGaming Fraud Prevention?

As the iGaming industry continues to expand globally, the threat of fraud within this sector grows in tandem, presenting significant challenges to operators. Effective fraud prevention is critical not just for protecting revenues but also for ensuring a secure gaming environment for legitimate users. By harnessing the power of digital signals—ranging from phone number intelligence to browser fingerprinting—operators can deploy sophisticated methods to detect and prevent fraud early in the user journey. This article explores the nuances of iGaming fraud and delves into how advanced digital signals can be pivotal in thwarting fraudulent activities before they inflict harm.

What is iGaming fraud and how does it work?

iGaming fraud encompasses a range of deceptive activities aimed at exploiting online gaming platforms. These fraudulent acts can vary widely, but some of the most prevalent include bonus abuse, promo abuse, and chip dumping. Bonus abuse involves players exploiting welcome offers and other promotions to gain undue advantage, often by creating multiple accounts or finding loopholes in the terms. Promo abuse follows a similar pattern but specifically targets promotional mechanics to unjustly enrich one's gaming wallet. Chip dumping is another sophisticated fraud tactic where players intentionally lose chips to another player as a method of money laundering within the platform.

Although we have detailed discussions on bonus and promo abuse in other content, it’s essential to recognize these activities as part of a broader spectrum of iGaming fraud. Understanding these fraud types helps in crafting more effective prevention strategies, which can be significantly bolstered by the use of digital signals. These insights not only aid in spotting potential fraud but also in understanding player behavior patterns that deviate from the norm.

What do the iGaming fraud statistics say?

While the online gambling market is expected to reach $125.6 billion at a CAGR (Compound Annual Growth Rate) of 9.1%, by the end of 2030 this amount is expected to grow to $583.69 billion (Source: Grand View Research).

On the other hand, according to the AGA (American Gaming Association), citizens in the United States wager an estimated $337.9 billion with illegal iGaming websites, with a loss of $3.9 billion in state tax revenue. In 2022, the illegal iGaming market in the U.S. generated $13.5 billion in estimated revenue, which marked a revenue nearly three times the size of the legal U.S. iGaming market (at the time estimated to be $5 bn).

iGaming industry isn’t the only modern-day industry that’s affected by fraud. Have a look at other fraud statistics in 2024.

Digital signals - the new frontier for fraud prevention

Digital signals are the cornerstone of modern fraud prevention strategies in the iGaming sector. These include:

• Phone number intelligence: this helps verify the authenticity of user registrations and track any suspicious activity linked to a phone number previously.
• Email address analytics: by analyzing email addresses, platforms can prevent multiple account creations from the same user and detect potential fraud networks.
• IP address data: IP analysis helps in identifying users connecting from high-risk locations or those using VPNs and proxies to mask their activities.
• Device detection: understanding the device used can alert to anomalies, like a new device suddenly linked to an old account.
• Browser fingerprinting: this technique identifies unique configurations of a player’s browser setup, helping to flag multiple accounts operated from the same machine.

These digital signals, when integrated, provide a robust framework for not only identifying but also preventing fraud in real-time. For instance, a combination of IP address data and device detection can help determine if a new account creation is genuinely new or simply a rehashed version of a previously banned user. Weaving these signals into the initial stages of user interaction—such as during account creation and first deposits—iGaming platforms can significantly reduce potential risks.

Account opening protection strategies

Early detection is crucial in mitigating iGaming fraud, and this begins with implementing effective digital onboarding processes. Silent pre-KYC checks are a foundational element in these strategies. These checks allow platforms to discreetly verify the authenticity of new users without impeding the user experience. By analyzing the digital signals collected during the account creation phase, such as inconsistencies in device or browser data compared to known patterns, operators can flag potential fraudsters before they become active within the system.

Furthermore, a well-structured digital onboarding strategy enhances the integrity of every account. It involves detailed scrutiny of the digital footprints left by users, which helps in identifying and rejecting synthetic identities—fabricated online personas used to commit fraud. Identity pre-screening, as part of the account opening protection, plays a vital role in this process. It ensures that only legitimate users can navigate through the onboarding process successfully, thereby securing the platform from potential threats right from the start.

Promo policy protection

Protecting the integrity of promotional policies is another critical area in iGaming fraud prevention. Operators must ensure that sign-ups and promotional engagements are genuine to prevent losses associated with bonus abuse and promo abuse. Techniques such as analyzing the frequency and pattern of promo code usage across different digital signals can help identify abnormal behaviors that suggest fraudulent activity.

To combat fake account sign-ups—often used to exploit promotional offers—iGaming platforms can employ strategies like linking each account to unique digital identifiers (e.g., device ID, email address, and phone number) and monitoring these elements for any signs of manipulation. Additionally, the detection of policy-abusive sign-ups can be enhanced by setting up alerts for unusual activities, such as multiple accounts from similar IP ranges or excessive promotional claims that do not align with typical user behavior patterns.

By establishing stringent controls and continuously monitoring digital footprints, iGaming operators can not only detect but also prevent the abuse of their promotional policies. This approach not only safeguards the platform's financial health but also maintains a fair and equitable gaming environment for all users. Next, we will explore how custom and pre-set risk scoring models can be integrated into these strategies to further enhance fraud prevention capabilities.

Creating risk scoring models in iGaming fraud protection

Risk and fraud scoring models are essential tools in the arsenal of iGaming fraud prevention. These models utilize a wide array of data points derived from the digital signals discussed earlier to assign a risk score to each user activity or transaction. Customizable scoring models allow platforms to tailor their fraud detection systems to the specific nuances of their operations, adapting to new threats as they emerge.

By integrating data such as IP address history, device fingerprinting, and email analytics, these models can accurately identify potential fraud scenarios before they manifest into actual losses. For example, a sudden change in a user’s device combined with a withdrawal request from a new IP address might raise the risk score, triggering further review before the transaction is approved. Similarly, repeated attempts to access an account from various global locations in a short timeframe could signal account takeover attempts, prompting immediate preventive actions.

Pre-set risk scoring models offer a baseline for fraud prevention by utilizing established patterns of fraudulent behavior. These models are continuously updated with insights from across the industry, ensuring they remain effective against evolving fraud tactics. The flexibility to customize these models allows iGaming operators to focus on specific areas of concern, such as bonus abuse or chip dumping, by setting higher sensitivity levels for related indicators.

By employing a combination of both custom and pre-set risk scoring models, iGaming platforms can create a dynamic and responsive fraud prevention system. This dual approach not only detects but also predicts potential fraud, allowing operators to act swiftly and decisively, thus maintaining the integrity of their operations and safeguarding their reputation among players.

Closing thoughts

The strategic application of digital signals for fraud prevention represents a significant advancement in securing iGaming platforms. By utilizing a combination of phone number intelligence, email address analytics, IP data, device detection, and browser fingerprinting, operators can effectively pinpoint and preempt fraudulent activities. These tools not only help in identifying and blocking fraud at its inception but also play a crucial role in maintaining a fair and transparent gaming environment.

Furthermore, the integration of sophisticated risk and fraud scoring models enhances the ability to detect nuanced patterns of fraudulent behavior.  
 
We’ve that the latest iGaming and online gambling statistics indicate a constant growth for the industry, but sadly the same goes for fraud within the same industry. Establishing a stable line of defense at the early stage of digital onboarding now emerges on the scene as the key differentiator that attracts and retains users, ensuring the long-term success and sustainability of iGaming platforms.

To unveil more fraud detection strategies and other digital onboarding solutions, reach out to our team of fraud experts.

Questions and Answers

How do digital signals specifically deter chip dumping in iGaming platforms?
Chip dumping, a form of money laundering within gaming platforms, can be curtailed using a blend of digital signals like IP address monitoring and behavior analytics. By analyzing betting patterns and comparing them with typical user behaviors, anomalies such as intentional losses that are characteristic of chip dumping can be detected. Additionally, tracking the transfer of funds and chips between accounts often reveals the networks involved in such fraudulent activities, allowing operators to intervene effectively.

What role does geo-location technology play in preventing iGaming fraud?
Geo-location technology is pivotal in ensuring compliance with regional gaming laws and detecting location-based fraud. By analyzing where users are accessing iGaming services from, operators can identify discrepancies such as the use of VPNs or proxies to bypass geographic restrictions. This technology helps prevent individuals from jurisdictions where iGaming is illegal from participating, thus reducing potential legal and operational risks.

Can digital signals help in the detection of multi-accounting and abuse of promotions?
Yes, digital signals such as device fingerprinting and email address analytics are crucial in identifying and preventing multi-accounting, a common method used to abuse promotional offers. Device fingerprinting allows platforms to recognize if multiple accounts are being operated from the same device, even if the user attempts to disguise this by changing other registration details. Email analytics further aid in detecting patterns or clusters of related emails used to create multiple fraudulent accounts, ensuring promotions reach genuine players only.