How to Stop Online Gambling Fraud in Its Tracks

Fraudsters are increasingly targeting gambling websites. Here's what to look out for and how to stop fraud without hurting conversions by increasing friction.
By 

Daniël de Jager

 on October 2, 2022. 
Reviewed by 

Joshua Genuth

The online gaming world is growing by the day and so is the fraud targeting it. According to Grand View Research, the global online gambling market was valued at $57.54 billion in 2021, certainly a ripe target for those with nefarious motives. Gambling platforms have an increased risk of fraud for the same reason digital goods fraud is so rampant: little to no intelligent protection, short time to ROI, and low risk of getting caught.

How to Prevent Online Gambling Fraud

Fraud managers must work constantly to prevent such fraud without repelling legitimate customers. Staying well within the chargeback "safe zone" to avoid being backlisted by payment processors is an ongoing challenge for any manager, especially when the goal is to make it as easy as possible to start playing.

Many websites opt to add more friction: long-winded KYC vetting, geo-locking, deposit/withdrawal wait times, transaction limits, and so forth. These tactics make it harder for customers to interact with the website and often mistakenly flag transactions as fraud, which hurts conversions.

Machine learning represents a real solution to this thorny issue, rooting out fraud attempts instantly at scale while allowing for smooth, uninterrupted gaming by honest players. By building on their experience handling millions of transactions and constant accumulation of behavioral data, AI-based platforms like nSure.ai can streamline this process. Deploying top-tier technology to handle transactional fraud analysis is a game-changer for online gaming—eliminating guesswork, false flags, and endless hours of manual review.

Common Types of Online Gambling Fraud

While fraud comes in many shapes and sizes, most online gambling fraud involves exploiting the gambling website's systems. Some common types of online gambling fraud include:

  • Multiple account fraud or collusion
  • Card-testing fraud
  • Chip dumping
  • Stolen funds (credit cards and PayPal)
  • Promotion/bonus abuse
  • False chargebacks