Online gambling is becoming more popular day by day, attracting players. But along with that, frauds are also on the rise.
Cybercriminals tend to exploit the platform’s shortcomings and trick the players and the service providers. Without effective fraud prevention measures, businesses will suffer enormous financial and reputational threats.
They use various types of online gambling frauds on platforms like money laundering, phishing attacks, data breaks, and several other forms of payment fraud to exploit the weaknesses of iGaming platforms.
It not only influences earnings or player keeping, but it also makes the platform appear less trustworthy to players because they are unable to build a secure gaming environment.
In this blog, we’ll have a look at the various types of online gambling frauds, how they affect players and platform providers, and the various security measures that one can incorporate to prevent these attacks.
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Online Gambling Fraud Types
Below are common online gambling fraud types which platforms need to keep an eye on in order to save themselves from cyberattacks:
1) Account takeovers
Fraudsters get unauthorized access to player accounts by stealing credentials, which are frequently obtained through data breaches or phishing scams. Once inside, they can withdraw funds, make unlawful wagers, or even sell the account to other fraudulent individuals, causing financial and data damage for players.
To prevent this, online casinos use multi-factor authentication (MFA), AI-powered activity tracking, and advanced encryption mechanisms. Regular security audits and informing gamers about phishing risks improve account security and reduce the possibility of takeovers.
2) Money Laundering
Cybercriminals tend to use illegally earned money on online casino platforms to place bets, and they withdraw the money won in these bets and state that as legally earned money. By this, they are able to hide the process of how they actually earned the money through illegal means. Thus, it can damage the platform’s reputation if they fail to detect that.
Casinos use anti-money laundering (AML) protocols, transaction monitoring systems, and KYC (Know Your Customer) rules to detect questionable activity. Automated risk evaluations and real-time warnings enable to identify unusual betting trends, ensuring compliance with global financial regulations.
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3) Phishing Attacks
The most common fraud that occurs throughout the internet is phishing scams. Cybercriminals make use of a fake email that contains a link for the players to open. As soon as the link is opened hacker has the access to all your data.
example, a businessman in Maharashtra lost around $7,000,000 after being tricked into gambling. The hacker just used a WhatsApp link to create a gambling account, and the businessman got trapped, which made him lose a huge amount.
4) Game Hacking
Hackers tend to manipulate with the games algorithm, which showcases a major vulnerability in the software of the game. They modify the outcome according to their preferences and advantage. This compromises the platform’s integrity, resulting in unfair games, financial losses, and a drop in player trust.
To prevent such threats, casinos use advanced security patches and blockchain-based gaming technology. Regular software updates and penetration testing help safeguard game algorithms from external tampering.
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5) Identity theft
Hackers steal information from an existing account to create fake accounts or to access existing ones. This can lead to serious issues such as fraud transactions, illegal withdrawals and increases the possibility of illegal activities taking place.
Biometric authentication, encrypted databases, and AI-driven identity verification can help online casinos improve account security. Account activity is monitored on a regular basis, and IP addresses are tracked to detect and prevent fraudulent access.
6) Data Breaches
Data breach occurs when hackers try to steal information of an iGaming platform in an illegal manner. This means the player’s financial and personal information is exposed which could result in financial loss and loss of resources for the player.
example of a data breach can be given to MGM Resorts International. The cyber attack took place in 2023, and it led to operational interruptions.
The hackers disclosed personal information of consumers who used the casino’s services before March 2019, including contact and identification information. The hack was made possible through flaws in the casino’s systems.
They instantly responded to the situation, shutting down all systems and they further ensured the customers about no leakage of personal and financial information.
7) Payment frauds
The main aim behind card management systems is to minimize the chances of payment frauds due to information theft of credit card details and fake payment methods. This causes financial losses for gambling companies and creates concerns about payment security, forcing more difficult verification procedures.
Online casinos tackle this by utilizing powerful fraud detection algorithms, tokenization, and real-time transaction analysis. Secure payment gateways, together with multi-layered verification systems, lower the likelihood of fraudulent payments while ensuring smooth transactions for authorized players.
How do frauds affect the gambling website?
Cyber threats are a danger not only to the players but also to the service providers in many ways. It becomes difficult for them to maintain a safe and secure gaming environment amidst financial losses and reputational challenges. Some of the major challenges faced by gambling websites are:
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- 1) Financial Losses: False activities such as chargeback schemes and money laundering cause direct financial damage to platforms, resulting in significant revenue loss.
- 2) Reputational Damage: It raises concerns over the platform›s security measures to keep the platform safe from fraud, which also has an impact on their reputation.
- 3) Legal Consequences: When websites do not succeed in preventing themselves from fraud, it can lead to penalties for them, even in some cases their licenses getting canceled.
- 4) Operational Disruptions: Frauds can cause a significant downshift in the operational efficiency of the platform, which turns out to be a major setback for the gaming platform.
Using card management for fraud prevention
Card management services can turn out to be a game-changer and can significantly help in the reduction of payment-related frauds on online gambling sites. Here›s how it can prove to be efficient:
- 1) Fraud detection and prevention: It involves the usage of modern technology like AI and machine learning to detect doubtful behavior and transactions, which prevent illegal payments.
- 2) Secure payment systems: Data encryption provides that card details are properly protected on gambling platforms, which reduces the risk of stolen card details and fake transactions.
- 3) Multi-Layer Authentication: Two-factor authentication and biometric identification increase security, making it more difficult for scammers to exploit payment information.
- 4) Real-time monitoring: Real-time monitoring ensures continuous tracking of behavior, which will help resolve issues in real-time, reduces cyberattacks and promotes a safe and secure gaming environment.
Preventive measures to avoid fraud
Let’s examine some of the security methods that online gaming platforms use to protect player information.
1) Advanced Encryption Tools
Nowadays online gambling platforms use advanced networking technologies like Secure socket layer and Transport Layer security to ensure secure data transmission. This ensures that hackers cannot intercept messages and the communication remains protected.
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2) Two-Factor Authentication
This adds an extra layer of security by verifying the particular account holder by means of sending an email or a one-time password for verifying the person’s identity. This makes it hard for the hackers to gain access to their accounts.
3) KYC and AML Policies
There are two different kinds of policies, namely, Know Your Customer and anti-money laundering. These policies require players to verify their identities in order to avoid fraud, stealing identities, and other illegal activities from taking place.
4) Secure payment gateways
Payment gateways use encryption systems and advanced mechanisms for fraud detection in order to achieve safe and secure withdrawals and deposits. This protects players from financial frauds and unauthorized transactions, keeping their money and resources safe. Additionally, they provide multiple payment options to players which makes it more convenient for users.
5) AI-Based fraud detection
AI-based detection systems are of a major advantage to both the service providers and the players. The main aim behind AI-based fraud detection is to examine behaviour patterns in real-time and to detect suspicious behavior, if any.
Some examples of suspicious behavior can be seen in the form of unauthorized logins (without consent of the person in charge of the account), suspicious payments and withdrawals, or even unusual betting patterns. By detecting these problems before hand, they can take actions promptly to avoid danger.
Wrapping up
Fraud in iGaming is a major stress for online gaming companies, resulting in cash losses, reputational damage, and legal problems. Implementing a good card management system is crucial for finding fake transactions, increasing security, and protecting both players and platforms. Encryption, multi-level authentication, and actual time monitoring are features that gambling websites can use to reduce fraud risks and offer a more trustworthy gaming experience.
We at iGaming SolTech aim to minimize fraud and provide payment solutions that are made according to your needs to ensure security and maintain a safe gaming environment. Our card management services offer safe and secure transactions, which helps operators attract more players towards the platform.
FAQs
1) How do I know if someone else has used my card for gambling?
Players should always keep an eye on their bank accounts and bank statements to ensure there is no illegal transactions. Individually, they should also enable two-factor authentication on their devices to ensure maximum security.
2) How can players ensure their security while gambling online?
When betting online, players should always choose well-known platforms, follow industry standards, use strong and unique passwords, and avoid sharing personal details with unknown users.
3) How can I protect my payment details from being misused on gambling sites?
Players should always prefer secure payment systems and choose only reputed platforms. They should also avoid sharing card details on websites and regularly update passwords.
Jaskaran Singh
Jaskaran Singh works as a Content Writer at iFour Technolab Pvt. Ltd., where he enjoys writing blogs and articles about the fast-changing world of technology. He focuses on research and analysis to make his content informative and engaging. Outside of work, he loves reading, keeping up with social media trends, and creating content that connects with tech-savvy readers.
