Main risk of gambling: how to protect casino from scammers
Online casinos can suffer huge losses if they do not take measures to prevent various user manipulations. Some players, in pursuit of their own benefit, apply unbelievable tricks and invent dozens of ways of cheating. It becomes more and more difficult to fight in an online environment when you do not see the face of your player. However, the development of technologies and the active use of existing mechanisms in the industry can help to reduce such risks and maintain a safeness.
Let's take a look at what exactly threatens the security of a gaming project.
Data breach
A data breach is one of the most severe threats that comes with a violation of Confidentiality Terms. It can become a devastating blow to a project's reputation; understandably, rare player wants to sign up for an online casino where their personal and payment information could be compromised or even stolen. Security plays a critical role in gambling; therefore, players' personal data must be protected robustly. Additionally, operators must consider the requirements of the GDPR (General Data Protection Regulation) and process users' personal data according to its guidelines.
Third-party involvement
These schemes are often employed, particularly to circumvent age restrictions. Worldwide, only adults are permitted to play in online casinos.
There are two common ways of transferring an account to a third party:
- Transfer for a fee, for example, through a freelance platform. Many freelancers don’t refuse the offer to register on a website and get paid for it. However, in the case of illegal actions, the person who entered their data and registered the account is held responsible.
- Minors using personal data of their adult relatives to gain access to the gambling platform. To protect against such cases, the operator must implement a data transfer prohibition, as outlined in the website's terms of use. Some projects even use video calls and interviews as a verification method, blocking the user's account if the procedure fails.
Credit card and payment method fraud
Payment fraud in the gambling industry encompasses various tactics. A prevalent method involves linking an unauthorized card or account to a user's casino profile. Addressing this security challenge requires a multi-departmental effort. Overlooking such activities can result in severe repercussions. Verifying payment methods is critical in the fight against fraud on gaming platforms. It is essential for operators to ensure that the player owns the registered payment method. Implementing automated systems to review payment patterns and card details is also advantageous, aiding in the detection of potential fraud or past misuse of payment methods.
Forewarned is forearmed. The time you invest in monitoring customer transactions always pays off with secure workflow. Businesses should not attract dishonest users, and for this, they must be well-protected.
Bonus abuse
In online casinos, bonuses are considered a very attractive promotion, especially the coveted welcome bonuses, for which fraudsters create dozens of accounts daily. This activity, known as multi-accounting, is strictly prohibited on platforms. To prevent illegal withdrawal of funds from the casino in this manner, the Terms and Conditions of the gambling resource should be filled with corresponding items that will restrict such visitor behavior.
Illegal payment reversal or chargeback
A player contacts the bank after funding their account and demands to cancel the transaction, arguing it was a mistake or that the requested service was not received, when in fact it was. If bank recalls the payment, gambling portal suffers losses. Such schemes are common in many countries, particularly popular in India.
The only solid defense against this kind of abuse is operating with a local license and accepting payments with the corresponding MCC code using 3D Secure. In reality, many operators with a Curacao license face a flood of such cases and struggle to cope. Minimizing losses and protecting against fraudulent gamblers are the main reasons of getting the anti-fraud system and implementing transaction monitoring, as mentioned earlier. Moreover, the project’s team should be aware of how to handle problematic customer situations connected to financial disputes and resolve them without damaging the entire business.
Monoup specialists have significant experience in markets with increased fraud risks and can assist in setting up an effective risk management system. Chargeback prevention and processing is something we can help you to crack.
How to ensure the safety of your online casino players
Anti-Fraud
Fraud in simple words means deceptive actions of users on the website that compromise security and hinder the provision of fair services. In the context of the gambling industry, this term often implies fraudulent transactions. Therefore, in this case, fraud monitoring is a comprehensive check of all deposit and withdrawal operations. This activity is not just mandatory for any payment system operating in gambling — but also serves as a metrics of its viability in high-risk business. Fraud on gambling websites causes colossal damage to operators and requires immediate attention.
There are two common types of fraud on casino websites:
- External manipulations — attempts to interfere with the casino's software, for example, through hacking attacks;
- Dishonesty of players — illegal transactions, attempts to deceive the operator, registration on multiple accounts, transferring an account to a third party.
For a casino owner, fraud means potential large losses. This could be not only a decrease in profit but also substantial fines from licensing authorities. In the worst case — loss of reputation among players. That is why security is so important. To ensure it, each player undergoes a multi-level registration and personal data verification procedure — thus, the casino has verified information about everyone, which will not allow dishonest visitors to deceive the software, pay with other people's payment methods, and withdraw winnings to them. Protection against malefactors in gambling is about player safety as well as the project's survival since the casino's reputation can be seriously damaged. Consequently, loss of reputation means the inability to continue successful business.
Therefore, it’s always better to go live with a project only after all necessary anti-fraud settings have been implemented and tested. Moreover, standard anti-fraud parameters are not enough for gambling business because they miss a lot of factors. If we consider a standard situation such as using a VPN service, the default anti-fraud settings may actin a permanent user blocking. But we have to admit that online players widely use VPNs, so a gambling project and its payment system need a fraud-monitoring that can be manually configured and set to check algorithms adapted to this and other popular cases. This involves analyzing fraudulent schemes, identifying risky niches, and determining fraud risks. A correctly configured anti-fraud system should not interfere with the casino's operation and simultaneously protect players' data, ensure security, legality, and transparency of all payments.
To protect payment systems and the online casino itself from potentially dangerous traffic, some of these solutions are implemented:
- Additional levels of identification, the possibility of blocking players, account verification — to exclude dishonest actions by players;
- High-quality software with flexible individual settings parameters and regular stress tests — to protect against external intrusions. Since fraud methods are constantly changing and improving, anti-fraud technologies, payment system protection, and gaming websites must also keep up and be continuously updated.
Legal means secure: KYC and AML obligations
KYC and AML are two important parts of compliance management to fight money laundering.
KYC (Know Your Customer) is a procedure for collecting customer information for lawful identification, identity verification, clarification of game funding sources. It is designed to counteract financial crimes, such as money laundering. This is achieved through comprehensive user verification and all personal data provided by them.
AML (Anti-Money Laundering) is a mechanism for detecting, preventing, and investigating the legalization of criminally derived income. Its main goal is to prevent money laundering through services that handle financial transactions — this is highly relevant for online casinos.Gambling resources are often attractive to scammers due to the ease of entry and possibility to simulate a logical flow of funds.
Gambling projects are required to verify documents confirming the player's identity along with documentary confirmation of source of money spent to gamble. Such confirmation is most often required for large transactions, to ensure they are not gained from any illegal activity. At the same time, these procedures should not complicate the verification process for law-abiding players, ensuring their safety too. AML policy is mandatory, along with Privacy and Personal Data Protection policies, for the activity of any company related to financial operations. For online casinos, developing an AML policy is one of the conditions for obtaining a license as well. Every responsible player checks the AML policy of the company before entrusting money to it.
Investing in the development of this document and moreover, continuously keeping it up to date, is not a bureaucratic requirement, it’s vital part of project success. Fraudsters are not staying behind the technology and innovation and use those to invent new tricks for deception. By paying enough attention to making your website a safe place to play, you can be sure of the safety of your visitors' money — and thus, the stand of your good reputation.
