A person holding their hand out in a “stop” motion with the words “Stop Gambling Fraud”

Running an online gambling operation – regardless of the type of operation (casino, sportsbook, bingo, etc.) – puts you at risk of gaming fraud. No online business – gambling-related or not – is safe from fraud. In fact, you should anticipate that at some point you will be targeted. This is why you not only need to have the necessary security protocols in place to prevent fraud, but you also need to educate yourself about the different types of fraud that target iGaming businesses, so you can anticipate risks and understand how to protect yourself. In this article we’ll explore, what gambling fraud is, what are the most common types of online gambling frauds, and how to prevent it.

What is Gaming Fraud?

Online gambling fraud occurs when an individual (cybercriminal) seeks to abuse, cheat, hack, and/or steal for the purpose of taking advantage of both the gambling operator and other players.

A person wearing a hood or mask (so they look like a thief) sitting in front of a computer and keyboards (essentially to represent a hacker).

Of course, online gambling risks exist for players just as much as they do for operators. There are crooked casinos/bookmakers and fake gambling sites that can scam players out of money, too. However, the dangers of online gambling fraud that we’re focusing on here are those gaming frauds that apply strictly to operators being targeted by cybercriminals. As such, this also excludes match-fixing.

Why? While match-fixing is illegal and is also a type of fraud related to gambling, it directly involves tinkering with a sports match or event and isn’t carried out to scam a specific business. An example of match-fixing is if a football team loses on purpose so that those who knew this was going to happen win money from betting on this outcome. Moreover, Most match-fixing is carried out by groups and not individuals. Gambling fraud, on the other hand, is an individual specifically exploiting one or more aspects of the operator’s business.

How common is it?

Unfortunately, online gambling fraud is common. Since the gambling industry rides legal and moral lines, it has always been appealing to fraudsters.

Also, the more lucrative an industry gets, the more cybercriminals it attracts. As such, the risk of fraud increases with each passing year as the world becomes more digital and more casino and betting sites pop up online and mobile. In fact, a Research and Markets report – “Online Gambling Market Report 2020-30: COVID-19 Growth and Change” – forecasts that the global online gambling market is expected to reach $92.9 billion in 2023 at CAGR of 11.64%.

As for actual fraud crimes, American consumer credit reporting agency, TransUnion, reported that since the COVID-19 pandemic began, online fraudsters have increased their rate of digital scams against businesses, including online gambling. Its Q1 analysis of global online fraud trends revealed that comparing the periods of March 11, 2019 – March 10, 2020 and March 11 2020 – March 10, 2021, online gambling saw an increase of 54.81%, with “Policy/License Agreement Violations” noted as the top type of fraud.

In regard to cybercrime activity as a whole, the total cost of all cybercrime in just the United States is several billions of dollars a year. An even scarier thought is that according to a report by Cybersecurity Ventures (a world leading researcher and publisher for the global cyber economy) it is estimated that cybercrime will cost the world $10.5 trillion each year by 2025.

How Does Fraud Impact Gaming?

A person dressed as a thief/burglar sneaking off with a sack of money

Online gambling fraud can have disastrous consequences on a business. Primarily, it reduces gambling profits and damages the reputation of operators in a high-risk industry where credibility and trust are often under scrutiny. High incidences of fraud can also lead to merchants having their account terminated. In short, being a victim of gambling fraud can not only cost your business lots of money, it can shut it down.

Fraud drives up Costs

Online gaming credit card frauds are among the most common in the industry. In many cases, it involves the use of a compromised credit card. When the innocent cardholder discovers that their credit card has been stolen and they are a victim of fraud, they can demand a chargeback to have the unauthorized gambling transactions reversed. For the operator, this results in both the loss of the transaction amount as well as the levying of the chargeback fee.

Since credit card networks monitor chargeback activity of merchant accounts, they may require those with notably high fraud and chargeback rates to take steps to lower these numbers. Merchants who cannot do so, run the risk of having their payment accounts terminated. If this happens, they will be forced to turn to “high risk” payment processors, which cost more, can put them at a greater risk of fines, and can quickly limit an operator’s options to affordably and reliably accept credit cards for online gambling transactions.

Fraud damages reputations

In addition to driving up costs due to chargebacks, payment processor fees, and potential fines, fraud also impacts an iGaming business’ reputation with their customers and their partners.

Customers who are victims of fraud question the reliability, safety, and fairness of the establishment. They will not only typically close their account, but will often complain about their experience and leave a bad review, which can negatively impact a gambling brand’s status in an industry that is already saturated with competition.

Beyond payment partners, other business partners such as software companies, game providers, affiliates, etc., may also choose to charge higher fees or cut ties. It’s not uncommon for other organizations to want to distance themselves from what they might perceive to be a high-risk situation if they continue working with a business excessively victimized by fraudsters.

Most Common types of Online Gambling Fraud

A suspicious looking person using a credit card

Every online business can be at risk of just about any type of fraud. However, certain industries are at a higher risk of certain forms of fraud than others. In the case of online gambling, the most common types of fraud are multi-account fraud, credit card fraud, chargeback fraud, and affiliate fraud.

Here is a closer look at all four types.

Multi-account fraud

A common way that fraudsters attempt to get an edge over a gambling operator is by setting up and controlling multiple user accounts by using different IP addresses and devices to avoid detection. Multiple account fraudsters typically create and control several accounts to cheat the system by engaging in one of these schemes:

  • Bonus Abuse – One of the most common casino frauds, the cybercriminal uses their fake accounts for the purpose of taking advantage of new customer offers (e.g. sign up bonus, free spins, etc.). Once they’ve fulfilled any necessary wagering requirements linked to the promotion (with the lowest amount wagered possible) they withdraw their funds and usually abandon the accounts before they can be caught in breach of the casino’s terms, policies, and agreements.
  • Gnoming – This is a common form of multiple account fraud used on bookmakers. The fraudster may engage in gnoming to evade maximum bet limitations. More commonly however, the multiple accounts are used to directly influence outcomes so that while the other fake accounts are used to deliberately lose, one can pocket all the wins and bonuses.
  • Chip dumping – A common form of fraud used in online poker, chip dumping occurs when a fraudster is in control of several players at a poker table and uses these multiple accounts to manipulate the game in favour of one of them so that this one account can win chips from the other players at the table.

An operator that is a frequent victim of multiple account fraud can quickly find themselves running at a loss.

Credit card fraud

As previously mentioned, credit card gambling fraud is common at gambling sites. Fraudsters use stolen credit cards to top up their account and play real money games so they can use illegitimate money to claim real wins and quickly cash out. The goal of these fraudsters is to launder cash from large batches of stolen payment credentials that they can find on the dark web.

This becomes a financial problem for the unsuspecting casino when the true credit card owner discovers their credit card was stolen and proceeds to initiate chargeback gambling transactions.

Chargeback fraud

Sometimes called “friendly fraud”, chargeback fraud occurs when a legitimate customer attempts to get money back from an online casino or bookmaker under false pretenses. It most commonly happens when a player is losing online gambling money and feels getting a credit card chargeback will reimburse their gambling losses. The player calls up their bank and claims that their card was used without their permission.

Unless the operator has proper security protocols and KYC (Know Your Customer) checks in place, they won’t have much luck winning this dispute as the bank will often side with the customer. It’s one of the top schemes among desperate players who want to know how to get their money back from gambling sites.

Affiliate Fraud

Due to the unique business models of online casinos and sportsbook, they are not allowed to advertise on standard ad networks. This puts these gambling operators at a greater risk of marketing fraud tactics, particularly those related to affiliate marketing.

Affiliate fraud is a type of marketing fraud where fraudsters typically take advantage of affiliate programs by spamming referral links, maliciously diverting traffic from other sites, and/or utilizing software to generate fake clicks and transactions. More advanced techniques could also include the fraudster using malicious browser extensions that swap legitimate affiliate URLs for their own, including injecting ads with referral links into ad-free pages. In short, operators pay the fraudster for a job they’re not doing.

Affiliate fraud can be an issue for some iGaming operators, as many rely on affiliate programs as part of their acquisition marketing strategy to drive authentic and valuable traffic to their site.

How to Prevent Gaming Fraud

A computer and mobile phone that is wrapped in chains and secured with a padlock

Gambling fraud prevention is key to reducing gambling scams, credit card gambling fraud, and chargebacks. The best way to safeguard your business is to known exactly who your customers are and the accounts they are accessing. Naturally, this isn’t always as easy as it sounds, as fraudsters are expecting to meet resistance and are primed to test your defenses. This is where anti-fraud software, such as the solutions provided by the platform providers TCS reviews, can help.

The right software can stop online gambling fraud-related threats such as:

  • Synthetic identity
  • Identity theft
  • Money laundering
  • Account takeover
  • Account farming
  • Disputed payments
  • Reversed payments
  • Bot attacks
  • Phishing attacks
  • Regulatory fines

One of the most important processes in helping to prevent iGaming fraud is to follow a good KYC practice. This involves a number of steps to verify a user’s identity and is a process that the player must complete directly after registration, before depositing. Depending on the local legislation, KYC may include:

  • ID verification (Proof of identity)
  • Proof of address
  • Age verification (a legal requirement in most jurisdictions)
  • PEP (Politically Exposed Person) check

You can also monitor the data of customers during the signup process by using these verification methods:

  • Device fingerprinting –This allows you to discover information about the device the customer is using as some devices will immediately raise red flags indicating suspicious use, such as if credentials have been stolen or acquired through phishing attacks.
  • IP analysis – This can reveal plenty about an individual’s internet usage, location, and even their potential for engaging in fraudulent activity.
  • Email analysis – Many emails are linked to social media accounts, making it easy for operators to track fake accounts.

It’s also important to verify payment methods and during account top-ups, monitor credit card information to make sure it does not post a high-risk threat or that it hasn’t been stolen.


A computer screen with numeric data and a locked padlock in the center, to represent digital security

Safeguarding your business from gaming fraud is one of the most important steps you can take toward securing long-term financial success. Our software platform reviews can help you find the best casino and betting software solution for the job. Many of these reputable providers can assist you in protecting your iGaming business with the best security encryption protocols, tools, technologies, firewalls, and anti-fraud systems.

Not sure where to get started? Reach out to the TCS team and we’ll be happy to connect you with the most ideal security partner.