Online Gambling Fraud

Fraudsters target the most critical points and weaknesses that are known to online gambling platforms. For example, some gaming sites have less stringent ID verification requirements. The anonymity allows fraudsters to use stolen personal details or stolen credit cards to vomit new account fraud and other scams once they’re onboarded, which results in financial losses for the gambling establishment. 

Some common fraud types in the gambling industry include:

• Chip dumping (multiple accounts join the same table, manipulating the game’s outcome to benefit or disadvantage a specific player). 
• Software manipulation (using or developing tools to alter game outcomes and exploit vulnerabilities).
• Identity theft (stealing personal data to create fake accounts or take over accounts to withdraw funds).
• Game rigging (bribing platform employees or referees in games to secure a win). 
• Gnoming (multiple accounts are used to help one player win and collect all winnings).
• Stolen credit cards (funding player accounts with stolen cards and other fraudulent payment methods for gambling).

Platforms don’t allow users to have more than one account for security reasons. This also includes gambling and gaming sites, which block players who breach this policy. Multiple account fraud leads to stolen identities, account takeovers, stolen or spoofed credentials and other attempts to harm the gambling establishment’s reputation and bypass security checks that are invented to prevent schemes, such as bonus abuse or placing additional bets under different identities. 

Arbing, or arbitrage betting, is a betting strategy where bettors place simultaneous bets on all possible outcomes of a sporting event to secure a guaranteed profit, regardless of the result. This approach exploits differences in odds offered across various platforms for the same event.

Players use arbitrage betting to secure profits by placing multiple wagers on all outcomes of an event. However, many arbers use bots to automate small bets across various platforms, capitalizing on odds variations while staying undetected by bookmakers.

Using bots, or bot fraud, is an illicit practice in online gambling and is often used in arbing to automate betting decisions by analyzing odds and placing bets without human input. Gambling bots can quickly wager on sports events or infiltrate multiplayer games like online poker using multiple fake accounts. While many iGaming platforms have bot detection tools, bad actors find new ways to bypass these security measures. 

Constant scams and fraudulent practices on any gambling site can result in a bad reputation with payment processors, loss of customers, wasted time and effort on catching fraudsters, financial damages, overwhelmed support teams that are bombarded with player complaints, and even non-compliance fines, which, in severe cases, can lead to the loss of license. For this reason, online gambling companies need to verify their users and keep up with proper fraud prevention and AML strategies.