Rewards for registration, free spins, and welcome bonuses — all this can be used to increase traffic and brand awareness and develop a loyal customer base. However, it also attracts fraudsters, which is why operators may lose their revenues.
Experts of the CASEXE studio will tell you about bonus abuse in the casino industry and the sports betting sector. We can also provide information on methods of dealing with delinquents and the role of gambling regulators in this matter.
It means a fraudulent activity that is aimed at making a profit from promotions, free spins, and bids, as well as other types of rewards.
Those who have been found to have committed violations are called bonus hunters. They can be not only registered clients of an online casino or bookmaker’s office but also bots or criminals. They create multiple accounts, use proxy servers, and change IP addresses to hide their actions from operators.
Amy Watkins, business development manager in the GBG consulting company, stated:
Bonus scam flourishes and costs the iGaming sector approximately 15% of annual gross income.
Let us consider the most common schemes:
The online sector is more exposed to risks related to bonus abuse than the land-based niche. It can be explained by the active digitalisation of the industry and the transition of a huge number of gamblers to the Internet.
Moreover, new fraudulent tools are appearing (masking software, bots-aggregators, and TOR browsers), which are becoming more and more difficult to detect.
According to Statista, online sportsbook and casino niches will grow by 11.3%. Customer acquisition and retention costs will also increase, given the fact that the market is highly competitive.
Analysts claim that:
Unreasonable losses in this budget line (due to an ineffective reward system and bonus abuse) will not lead to an increase in profits and will become a serious test for the enterprises.
However, businessmen cannot completely stop giving rewards. A sharp reduction in loyalty programs will lead to a decrease in Internet traffic and casino conversion. iGaming platforms risk losing regular customers and worsening their position in the highly competitive market.
In addition to bonus abuse, operators suffer from cybercriminals and fraudulent payment schemes.
Statista experts claim that in the first half of 2023, the largest number of cyber attacks on the iGaming sector in the entire history took place:
60% of all cyber attacks were performed in the US, India, China, the UK, and Vietnam. These countries have different approaches to the legalisation of gambling and well-developed IT structures. To destabilise casinos, fraudsters used powerful hardware and software.
Let us consider the most popular techniques used by the owners of online casinos and betting shops:
Factors that indicate potential fraudsters:
A thorough analysis of new profiles allows entrepreneurs to quickly identify intruders and protect their iGaming platforms against hackers and bonus hunters.
Operators are offered the following options:
Amy Watkins noted:
MI helps entrepreneurs identify fraud in real-time via a secure smartphone.
The technology is based on the use of information provided by a reliable mobile operator and API-based data.
Key features of Mobile Intelligence:
Owners of iGaming sites offer too flexible conditions for the withdrawal of bonuses. Sometimes, a casino may not have a wager at all, which is why delinquents can easily steal money from operators.
The higher the requirements, the lower the likelihood of becoming a victim of scammers. Ideally, there should be no offers without wagers at all.
The following strictest terms are set by top bookmakers:
The number of spins can reach x5 or x6, which encourages gamblers to place more bids.
Entrepreneurs can reduce the risks of bonus abuse by introducing a reward system for each type of content:
Innovations in the regulatory framework of the world’s leading gambling jurisdictions play into the hands of iGaming business owners.
The authorities establish:
The tools help reduce ludomania and minimise cases of fraud. The restrictions also cover many different risks associated with bonus abuse.
Operators no longer need to increase special offers. They optimise marketing costs and prevent manipulations with payments.
Some of the most stringent requirements are provided by the UK Gambling Commission (UKGC). It obliged casino owners to check the solvency of their customers and banned advertising of such establishments, as well as the acceptance of bets on credit funds.
In 2023, the government presented a new bill called White Paper. The authorities plan to limit the size and number of rewards and free spins that will be offered to gamblers.
The UKGC’s tough approach to the regulation and monitoring of bonuses is bringing results.
In 2021, John Howard, a fraudster from Essex, was sentenced to 5 years in prison. This is the first severe punishment for this crime that has been adopted in the UK.
Howard played a leading role in the syndicate that created more than 1,000 fake accounts on the Bet365 website. The scheme involved the theft of welcome bonuses and bypassing deposit limits. Due to the actions of the delinquent, the bookmaker lost about £236,000.
The Spelinspektionen regulator limits the amount of incentives to €10 per gamer. The maximum weekly deposit and the amount of loss are set at €471.
In 2019, the Commission fined two local operators (Genesis Global and AG Communications) for offering recurring bonuses to Swedish players.
The online casino and betting market appeared quite recently — in 2018 — but bookmakers are already noticing its oversaturation with bonus offers.
Entain’s CEO, Jett Nygaard-Andersen, announced the reduction of marketing activities in 2024. Major changes will affect New Jersey.
The fact is that the legislation of this state prohibits the inclusion of the amount of bonuses in the structure of the company's operating costs.
Let us consider what top vendors offer:
The brand’s team works in several areas:
The company takes a holistic approach to the prevention of this fraud type. It is based on investigating the value of an individual user or group of clients, the analysis of their preferences, and the use of combined techniques to control the costs of acquisition and audience retention.
The brand’s proprietary platform contains:
The Maltese developer offers a premium BonusEngine solution with the following useful features:
The phenomenon is a common problem in the casino and sportsbook industry.
From us, it is also possible to order the following useful services:
For all questions, please contact our managers.
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