How to Combat Bonus Abuse Fraud in iGaming

iGaming is a rapidly growing industry providing players with numerous online entertainment options, from online casinos, poker rooms, sportsbooks, and other betting websites. 

However, as the industry grows, so does the number of fraudsters trying to exploit the system for their benefit. Bonus or promo abuse fraud is one of the most significant challenges facing the iGaming industry, reportedly costing the online gaming sector around 15% of its annual gross revenue. This article discusses how to combat bonus or promo abuse fraud in iGaming.

What is Promo Abuse Fraud?

Promo or bonus abuse fraud occurs when online scammers create multiple accounts to take advantage of promotions offered by iGaming or online gambling operators. Many iGaming operators use special promotions or bonuses to attract new customers, but these promotions can be vulnerable to abuse and fraud due to their high potential for monetization.

Bonus abuse fraud primarily impacts poker, casino, and sports betting websites, but any business that relies on signup bonuses as a marketing strategy could be at risk. Fraudsters use stolen or synthetic identities to open up multiple accounts to claim new account promotions and bonuses. Techniques that they use include utilizing prepaid credit cards and cell phones to simulate unique individuals.

How Promo Abuse Fraud Works in iGaming

Bonus or promo abuse fraud takes advantage of systems that struggle to detect when a single user has multiple accounts. This blind spot allows promo abusers to register multiple identities to earn a signup bonus for each new identity. As long as the fraudster remains undetected, they can continue to earn signup bonuses and repeat the process. This widespread practice is highly lucrative for fraudsters, leading many bad actors to invest significant financial resources into expanding their bonus abuse operations.

Unfortunately, iGaming companies depend heavily on bonus offers for new customer acquisition and customer retention. iGaming marketing offers such as signup, welcome, reload, and no deposit bonuses are often the most reliable means of attracting and retaining a loyal player base.

Tips for Combatting Bonus Abuse

To prevent bonus abuse, it is paramount to identify when a stolen or synthetic identity is being used. There are attributes to a transaction that will indicate a synthetic identity, some attributes to detect are:

1. Traffic generated by the same individual: Bonus abuse is often perpetrated by one bad actor attempting to open multiple accounts. In addition to other attributes below, one way to identify this sort of individual is by performing facial biometrics remotely. While a single fraudster can use multiple names and identities to open accounts, a biometric capture can identify an individual even when they use different names.
2. Suspicious IP addresses: Tools to identify suspicious IP Addresses may include real-time analysis of incoming traffic, IP reputation databases, and geolocation data to discern patterns indicative of malicious behavior or IP spoofing. Additionally, implementing rate limiting and captcha challenges can help thwart automated bots or excessive requests from a single IP address. 
3. Traffic from the same devices: Identifying traffic originating from the same device is important to reducing synthetic identity and, therefore, bonus abuse. Employing techniques and tools, such as examining device fingerprinting data, browser version, operating system, screen resolution, and other unique device characteristics, can detect traffic coming from a single device. Additionally, cookies or local storage can help persistently recognize returning devices and their associated user behavior.
4. Suspicious Speed: Fraudsters who have signed up before may be able to do it much faster the next time around. Keep an eye out for visitors that are able to complete the account origination process faster than expected, as this may be a sign of fraudulent activity.
5. Suspicious Exits: Fraudsters often attempt to quickly cash out winnings or dump chips in fake accounts. Look out for visitors withdrawing winnings or making deposits at unusually fast rates, as they may be an indication of bonus abuse.

How Trust Stamp Prevents Promo Abuse Fraud in iGaming

Trust Stamp’s Watchlist service detects duplicate identities by looking for duplicate faces and determining whether an individual has opened an account in a prior transaction. The key differentiator is that Watchlist preserves individual privacy because it works without storing photos or facial measurements.

How does it work?

Watchlist works by converting a photo of an individual into a Trust Stamp generated Irreversibly Transformed Identity Token (“IT2”). The person’s photo and biometric templates can be deleted, but facial matching can still be performed using IT2. While a single fraudster can use multiple names and identities to open accounts, the IT2 for that fraudster can identify an individual even when they use different names.

By using Trust Stamp's advanced identity verification solutions, you can promote responsible gaming practices and build trust with your players, all while maintaining a secure gaming environment. 

Contact Trust Stamp today to learn more about how our safer gambling solutions can benefit your platform.