Online gambling has been rising in popularity thanks to its convenience but fraudsters and scammers are also finding their way into the business. From money laundering to payment system fraud all the way to bonus abuse, or manipulating promotion incentives, criminals are finding novel ways to exploit iGaming platforms – which at the same time are facing regulatory pressures to verify their players.

One of the emerging trends in defrauding online gambling platforms is colluding between players to launder money, especially those in organized crime, says Eleni Panagiotopoulou, head of anti-money laundering (AML) at gambling software company Softswiss. Player-versus-player (PvP) games such as poker, blackjack, or even Tic-tac-toe often involve direct transactions between players that can be hard to track.

“These players are playing with very, very low amounts, but in a very rapid succession of transactions,” she says. “It’s very hard to monitor, identify and detect that this is going on.”

Panagiotopoulou spoke at iGaming Fraud & Compliance Day 2024. The online conference was organized by Sumsub, a biometric identity verification platform that offers know-your-customer (KYC), know-your-business (KYB) and AML products. Aside from emerging fraud schemes, the panels discussed responsible gaming rules, the use of artificial intelligence and balancing strong safety measures and user-friendly platforms.

Fraudsters are quick to adapt: They move from poker to casino games which are less monitored or they play with cryptocurrencies, which shield them with anonymity and make it difficult to track funds.

To tackle the fraud issue, iGaming companies have been utilizing AI, applying technologies such as biometric verification with selfies and complicated models for pattern detection. But AI is also helping companies stay compliant.

“It is extremely difficult to be able to comply with complex regulations that there are today both in terms of AML but also in terms of responsible gaming without the assistance of AI and other tools that are available today,” says Joseph Borg, advocate and partner at WH Partners law practice.

Regulators are realizing that online gaming needs to be monitored by regulatory authorities who are also tech-savvy. But some jurisdictions are tougher than others. There is a risk that over-regulation could lead to players going to the black market, Borg adds.

“Let’s make the regulated product sellable. Let’s make it attractive enough to bring along the players but at the same time, we try to do our best to protect those that are most vulnerable,” he says.

The most important way to make regulatory requirements such as identity verification palatable to players is transparency, according to Van Hambardzumyan, risk management expert at SoftConstruct. Transparency can be achieved in many ways but the most essential one is raising awareness among users of the importance of ID verification.

“I don’t know even a single person who loves taking the KYC because taking video selfies or providing documents is not something that is satisfying,” says Hambardzumyan. “However, once the user is informed enough, they understand that is essential in order to maintain equality, equity and fair play”

Article Topics

biometrics  |  digital identity  |  fraud prevention  |  gambling  |  identity verification  |  KYC  |  selfie biometrics  |  Sumsub