Over recent years, we saw the online gambling industry transform into a multi-billion dollar industry. The online gambling industry is spearheading the innovation in the online gaming space. This helped bring in more opportunities and chances. However, like all other successful businesses, it also opens a door to certain pitfalls and fraud risks when it starts to boom.
Identity theft, unfair gaming, payment fraud, etc are the various types of online gambling fraud currently infecting the online gaming space. This has led to the serious downfall of the trust and reputation of online gambling providers. Today we are focusing on how online casinos and other providers are relying on advanced technology to counter fraudsters and how they protect our identity and privacy.
What Is Online Gambling Fraud?
Online gambling fraud is the act of cyber criminals trying to defraud online gambling providers for identity theft, bonus abuse, payment scams, or money laundering. Over the years online gambling platforms have become more convenient and accessible to a wider range of players. This also exposes its weak points for fraudsters to penetrate the system and abuse it.
Various Types Of Online Gambling Fraud
- Identity Theft: Since all the details of an online gambler are stored in the online gambling provider’s server, fraudsters target the servers and steal the user’s login credentials to place bets illegitimately.
- Payment Fraud: Like the user’s login credentials and personal data, their payment details such as credit card and bank account details are also stored in the gambling provider’s server. Fraudsters use these details to place bets without the player knowing.
- Bonus Abuse: Welcome bonuses are the most lucrative bonus at an online casino. Fraduter uses multi-accounting to abuse the welcome bonuses by claiming them multiple times, driving the online casino to a loss.
- Cheating Software: Online casino games are automated using algorithms, making them vulnerable to hackers. Fraudsters use hacks and other tools to influence the algorithm and make the odds favor them.
- Money Laundering: Criminals deposit unaccounted money in gambling accounts and place bets with it. After fulfilling the wagering requirements, the money is withdrawn, making it accounted as ‘white money’.
How To Stop Online Gambling Fraud
- Identification Protocols
To stop online gambling fraud, only legitimate players with proper accounts should be allowed onto the online gambling platform. It is necessary to verify the identity of the player during registration and each time they log in. Here are a few ways by which the identity of a player is verified:
- Know Your Customer (KYC): By implementing strict KYC procedures, online gambling platforms can prevent any unwanted intrusions on their platform. The KYC procedure involves collecting the personal data of the player including the name, address, and date of birth, which is verified using government-issued identification documents. Additionally, biometric verification, fingerprint scans, and facial recognition also are used in KYC procedures to ensure genuineness.
- Multi-factor Authentication: A two-factor authentication or multi-factor authentication adds another layer of security if the login credentials of the player are compromised. It means the player has to enter another et of information other than the login credentials and it involves a code being sent to the player’s mobile, which the fraudsters cannot receive.
- Security Solutions
By using the latest technological advancements for security measures, online gambling providers detect and prevent online gambling fraud.
- Encryption: Advanced SSL (Secure Sockets Layer) and TLS (Transport Layer Security) are the industry-standard encryption protocols that ensure the safety of the data entered and generated from the online gambling platform.
- Blockchain: Modern online gambling platforms incorporate the latest blockchain technology, which ensures a decentralized fair gaming experience. Additionally, cryptocurrency transactions are highly secure and immutable.
- Regulatory Framework
Online gambling platforms are prompted to operate at high standards due to various licensing and regulatory authorities that oversee gambling services. This prevents any scams and fraudulent websites from operating in the online space.
- Licensing & Regulation: Online gambling license providers conduct stringent background checks, financial stability assessments, and audits of the random number generators (RNGs) of online casinos before providing them with gambling licenses.
- Anti-Money Laundering Regulation: The licensing agencies also check large financial deposits and withdrawals in online gambling platforms and check for their source to prevent any type of money laundering.
- Spreading Awareness
To prevent online gambling fraud, the players, stakeholders, and operators need to be made aware of the various security measures used to protect their data and transactions.
- Data Privacy: Players are made aware of how their data and financial details are handled in the platform’s servers. The strict rules prevent the providers from sharing your personal information with any third parties.
- Responsible Gambling: The latest technology like random number generators (RNGs), continuous shuffling machines (CSMs), and various other algorithms are used to ensure fairness so that the players can have an unbiased gaming experience. Similarly, players are also made aware of the ill effects of gambling and certain resources to combat it.
Conclusion
Online gambling platforms are sources of entertainment and thrill. However, like every other booming business, it has its pitfalls. If kept unregulated, online gambling fraud can deter the credibility and reputation of the gaming industry. By ensuring robust identification protocols and implementing advanced security measures, it can be prevented significantly.
Strict regulatory frameworks and spreading awareness can keep this plague that affects the online gaming space at bay. By stringent security measures and protocols mentioned above the online gambling industry can be made a safe and secure environment for players to play without any risks.
Read More: How Are Online Casinos Justified By The Industry?