Online Gaming Fraud and Other Threats to a Growing Industry
Posted December 27, 2017
Online gaming fraud could put a damper on a rapidly growing industry. But, advanced authentication technologies could be the ace in the hole that these businesses need.
The global online gambling market is expected to reach $1 trillion by 2021. Aside from the adrenaline rush many players feel while gambling and the lure of potentially large jackpots, much of this growth can be attributed to the continued adoption of mobile gaming.
Of all the gaming and gambling transactions analyzed by ThreatMetrix, 49 percent came from a mobile device. Clearly, digital transformation has taken hold in this industry, with live in-play betting and access to thousands of virtual casinos increasing its popularity and extending its reach to a global audience.
In fact, the global mobile gambling market is forecast grow at a compound annual growth rate (CAGR) of 18.84 percent from 2017-2021.
Of course, as with so many other industries, growth comes with a price – increased cybercrime.
This industry faces everything from small-time scammers looking to take advantage of new player bonuses to large criminal syndicates moving and hiding the proceeds of crime. Yet, identity spoofing still remains the biggest threat to this industry as fraudsters look to take advantage of the abundance of identity data available after corporate breaches.
For example, a man in England lost nearly 12,000 pounds when fraudsters using stolen identity credentials made 110 fraudulent transactions at an online gambling website.
In fact, according to the ThreatMetrix Gaming and Gambling Cybercrime Report, one in every 20 new account creations is fraudulent. And, automated bot attacks can account for around half of daily gaming and gambling traffic during periods of peak attacks.
As this industry has gone digital and grown in popularity, it has become a prime target for fraudsters seeking to monetize stolen credentials by signing up for fraudulent new accounts, or taking over existing ones to steal account credit or make fraudulent bets.
But, the threats don’t stop there.
Gamblers use IP spoofing, VPNs and other techniques to mask their location, especially if they are in a region where online gambling is illegal. And, they have developed new ways to hide their winnings from the eyes of the law. Recently, a Reuters investigation uncovered a network of dummy online stores that were being used as a front for internet gambling payments.
Despite efforts to educate players and weed out unsavory characters, the industry is also plagued by fraudulent gaming and gambling sites that draw unsuspecting gamers who believe they are placing a legitimate bet, only to see their winning ticket go unpaid.
And, then there’s the challenge of identifying and stopping problem gamblers. Regional legislation requires operators to focus on responsible play and try to ensure gambling does not have a negative effect on the wider community. This includes finding effective ways to identify and block self-excluders or problem gamblers.
Dealing with problem gamblers is a global issue, and doesn’t seem to be going away anytime soon.
Efforts to curb this problem are underway, including one plan that saw more than 10,000 customers across four UK-facing gambling operators give permission for their data to be used in an attempt to help researchers identify “markers” that could indicate a potential problem gambler.
A Better Bet
Yes, data is the key. Data gathered and analyzed in real time from each transaction can be used to determine a user’s digital identity – his or her online footprint that is unique to each user and virtually impossible to spoof, steal or fake.
By being able to accurately identify who is actually creating an account, or placing a bet, operators can provide a better online service to its large base of trusted, returning customers and maintain a fair-play environment for all gamblers. And they’ll be able to identify and block fraudulent and problem gamblers in real time while they’re at it.
That sure looks like a winning hand to me.
To learn more about navigating the evolving threat landscape for operators worldwide, download the 2017 Gaming and Gambling Cybercrime Report.