Navigating the Complexities of Fraud Prevention in Online Casinos

Oznik Vondervelden, co-founder of Greco, an expert in risk identification for online casinos, sheds light on the challenges faced by operators in safeguarding against the abuse of bonuses. Speaking exclusively to Igamingbusiness, Vondervelden shares insights on how operators can avoid substantial financial losses to fraudulent activities.

Despite the common belief among online casino operators that a range of software and technological tools provides effective protection against bonus program abuse, Vondervelden's expertise suggests otherwise. The gambling industry, notorious for its high stakes and abundant wealth, struggles to combat fraudsters who have mastered the art of abusing bonus systems, resulting in significant financial implications for operators.

The gambling industry's reputation often becomes a fertile ground for opportunists seeking to justify ethical violations. Vondervelden narrates stories of scammers' ingenuity, akin to the tales of Robin Hood, highlighting the allure of taking money from the perceived villain. Hollywood's blockbusters like Ocean's Eleven and real-life figures such as MIT card players romanticize these stories, portraying them as intellectual duels against brutal capitalism.

Examining the case of Jonathan Howard, a husband and father convicted in the UK, Vondervelden explores the moral ambiguity surrounding actions driven by enormous potential gains. Despite the legal repercussions, individuals like Howard are motivated by the allure of exploiting vulnerabilities in technical systems and processes. Vondervelden draws a parallel, likening the act of abusing bonuses to acquiring a printing press endlessly producing real money.

While there are numerous tools available to combat fraud and false verification, Vondervelden exposes the thriving counter-industry specializing in bonus abuse, worth billions. The well-known secret within bonus abuse communities, yet less acknowledged within the industry, lies in the relative ease with which scammers bypass security systems.

In navigating this intricate landscape, online casino operators must remain vigilant, acknowledging the limitations of existing tools and adopting comprehensive strategies to mitigate the risks associated with bonus abuse.

 Vulnerabilities in Security Measures

Examining the shortcomings of the security apparatus reveals significant gaps that can be exploited by fraudsters in the online casino landscape. For instance, while fingerprinting devices are a prevalent security method, they come with inherent drawbacks. Research conducted in New Jersey indicated that a single individual leveraging each bonus offer could amass profits of up to $18,000, with even higher figures observed in various jurisdictions.

Fraudsters adeptly scale their operations across multiple identities by employing unique devices and IP addresses for each persona. The additional cost incurred for the necessary equipment has a minimal impact on their overall income. However, simpler methods, such as dynamic IP addresses, clearing cookies, and using regular browsers and devices, often fall into the ambiguous realm of false positives.

Efforts towards thorough client verification frequently clash with the usability of programs/applications and cost considerations. While background verification offers minimal security, it remains highly susceptible to counterfeiting and the use of stolen data.

In the UK, the data required for thousands of verified casino accounts is publicly accessible on the Companies House registry. Despite the belief in the heightened security of using Social Security numbers, persistent data breaches have exposed the inefficacy of this process.

Another prevalent tactic in the verification process involves "uploading documents when withdrawing funds," a strategy employed by scammers in collusion. By consolidating winnings from multiple accounts and utilizing sophisticated forgeries, scammers need only one set of convincing fake documents to launch an attack, compromising an operator with thousands of personal details.

Advancements in artificial intelligence present an additional layer of complexity in detecting such counterfeits. A recent viral demo on LinkedIn showcased how AI can animate still images to circumvent expensive liveness checks, traditionally deemed one of the most reliable security measures.

This escalating "AI vs. AI" scenario has resulted in an arms race, with security measures becoming increasingly exaggerated and challenging to navigate.

Navigating Challenges in Online Gambling Security

Addressing challenges in the realm of online gambling security has become an intricate task, particularly with the evolution of digital wallets and virtual cards. These advancements have significantly altered the risk management landscape, posing hurdles that were once considered almost insurmountable.

Previously, the necessity for a distinct payment card acted as a robust deterrent against multi-accounting. However, the rise of digital wallets like PayPal, Apple Pay, Neteller, and Skrill has streamlined the process of creating multiple accounts linked to a single wallet.

The introduction of virtual cards has further complicated matters. Users can now generate numerous unique card details for a single wallet, reaching potentially hundreds or thousands. Attempting to block virtual cards presents a dilemma due to the overlapping identification codes (BIN) with those of physical cards.

Blocking cards from providers such as Monzo and Revolut risks alienating a significant customer base and contradicts the ongoing trends in banking innovation and consumer demands for confidentiality. Potential solutions may lie in blockchain-based digital identities, linking players to a digital trust rating verified through an encrypted retinal scan.

However, even with these advancements, challenges persist, particularly concerning criminal syndicates. The modus operandi involves a syndicate leader recruiting individuals to exploit bonuses, offering guidance on maximizing each offer and sharing in the resulting profits. Each player operates independently, utilizing their unique device, IP, cookies, browser, geography, payment method, and KYC documents, leaving virtually no trace.

This challenge is exemplified by Finnish attackers who have proven elusive due to their adaptive methods in response to open banking, causing financial setbacks for numerous operators. A parallel scenario unfolds in the US, grappling with difficulties posed by geolocation tracking. The search for comprehensive solutions to these multifaceted issues remains an ongoing pursuit.

Enhancing Security Measures: Gameplay Analysis as a Crucial Element in Curbing Bonus Abuse

Let's be clear – embracing risks is an essential aspect of the gaming industry. However, relying solely on existing solutions doesn't provide a foolproof answer to the problem. In high-bonus markets, achieving comprehensive security necessitates a combination of device fingerprinting, verification, payment analysis, and, significantly, gameplay analysis.

The challenge lies in the fact that most risk mitigation products employed in the industry tend to overlook what makes this sector distinct – the gameplay itself. Gameplay serves as an authentic, unfalsifiable process, acting as a fail-safe mechanism. The intrinsic value of a player, or the presence of cheating, is unequivocal – it's either black or white.

The dilemma arises as operators struggle to distinguish between players, lacking the ability to make these critical differentiations. Top-tier operators might run an account for an extended period, investing substantial amounts, only to discover the true nature of the player too late – after the money is lost. Bridging the gap between risk management and Customer Relationship Management (CRM) teams and improving the analysis of gameplay risks is imperative.

It's essential to recognize that VIPs and bonus abusers exist on opposite ends of the same value scale. To address this, a concerted effort is needed to refine gameplay risk analysis, ensuring a proactive approach that aligns risk management with customer relationship strategies.

Ozrik Vondervelden, a prominent expert in combating bonus abuse and risk management in the gambling industry, brings over 40 operators under his advisory umbrella. As the co-founder of Greco, the industry's pioneering company dedicated to gaming risk, Vondervelden and his team specialize in identifying gaming risks and accurately assessing the value of each player. Their collaborative efforts aim to empower operators and fortify the industry against potential threats, ultimately fostering a more secure and sustainable gaming environment.