Did you know? Fraud in the iGaming industry has increased by 64% from 2022 to 2024, with iGaming frauds costing around $1.2 billion worldwide. Bonus abuse fraud is a notable contributor to these losses.
While bonuses are the best way to attract and retain players, they could create an opportunity for frauds too. Therefore, it is important for gaming operators to know how bonus abuse works and what are the iGaming fraud prevention methods. This helps them to keep a fair and profitable gaming environment.
What is Bonus Abuse Fraud?
Bonus abuse fraud occurs when players violate operator’s rules to take advantage of promotional deals. The goal of this fraudulent action is to withdraw bonus funds without meeting necessary requirements, such as wagering a certain amount or playing the required number of games.
Players may do this by creating multiple accounts to get more bonuses or by placing bets which are against the intent of promotion. Such actions can make the promotions unfair, causing the financial loss of the gaming companies.
Types of Bonus Abuse in Online Gaming
Operators must be aware of the below common abusive behaviours to manage bonus abuse effectively:
- Account Churning: In this technique, a player creates multiple accounts by different fake names, addresses, and payment methods to claim sign-up bonuses.
- Manipulated or Fake Deposits: In this technique, players make false deposits or use deceptive methods to appear as if they have added money to their accounts. This allows them to claim bonuses or withdraw money without actually contributing.
- Low-Risk Betting (Risk-Free Betting): It happens when a player meets bonus requirements by engaging in low-risk betting having little to no chance of losing. This might happen when a player places a bet on both outcomes of an event or on almost guaranteed results. This ensures they can withdraw bonus funds without exposing themselves to actual risk.
- Exploiting Loopholes in Bonus terms: Fraudsters look for ambiguities in the terms and conditions of bonuses. They make use of these loopholes to gain more benefits than intended by the operators.
Impact of Bonus Abuse Fraud on iGaming Operators
Operators can face severe problems with bonus abuse fraud, such as:
- Financial Losses: When players withdraw money without following the rules, the gaming companies suffer immediate money loss.
- Reputation Damage: A gaming platform may lose the trust of its users if it can’t control or reduce bonus abuse. This lack of belief can result in negative publicity, making it harder to keep current players or attract new ones.
- Legal and Regulatory Risks: In certain areas, failing to manage bonus abuse can lead to fines, penalties, or some legal issues. Regulatory bodies may keep an eye on such operators that do not have adequate protection, leading to more serious problems.
How to Prevent Bonus Abuse Fraud?
For iGaming fraud prevention, operators need strong strategies, solid systems, and clear rules. Here are some of the effective ways to do it:
- Implementing Strong KYC Procedures: Before giving out bonuses, companies should check the player’s identity. This means asking for government IDs and checking payment details to make sure they are real. By matching payment methods with the player’s identity and looking out for multiple accounts, operators can stop abuse effectively.
- Predictive Fraud Detection: Use smart systems to watch how players act and spot potential fraud based on current patterns. These systems automatically flag accounts that show suspicious activity, like unusually high bonus claims or too many bonus withdrawals.
- Device and Browser Fingerprinting: Beside monitoring IP addresses, use technology to identify players who use multiple devices or browsers. This way operators can track players using different IP addresses or VPN services. That said, fingerprints include unique identifiers from device software, hardware, and browser configurations.
To solve this problem, fraud detection software for casinos like Affnook helps in preventing bonus abuse fraud by filtering out traffic from unknown OS and devices. This way you can put your money on real players and tweak your campaign accordingly.
4. Cross-Platform Tracking: Install systems to monitor a player’s activities across platforms such as desktop, mobile, and apps. This prevents players from taking advantage of loopholes between different devices.
5. Bonus Capping Based on Account History: The operator can limit bonuses to newer or unverified accounts with stricter requirements, while giving bigger rewards to loyal customers. This way companies can stop suspicious activities and reward genuine players.
6. Geo-Restriction on Bonus Access: If an area is known for a lot of affiliate fraud in iGaming, you can limit bonus availability in those areas by blocking those regions. This targeted approach ensures that high-risk geographical areas do not abuse the system.
Conclusion
Bonus abuse fraud is one the biggest problems for online gaming operators. But with the right strategies, its impact can be reduced. Before onboarding any player, companies should run identity checks to ensure they are real before giving bonuses.
Companies can also use smart tools such as Affnook to spot and flag any suspicious activities quickly. Moreover, by setting clear and straightforward rules for bonuses help players understand what they need to do to earn.
By using these strategies, gaming companies can lower the risk of bonus-related frauds, protect their money, and still offer great bonuses to those who deserve.