This article is the first part of SEON’s exploration into bonus abuse.
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Operators that run promotional campaigns increase the risk of encountering fraudsters that manipulate new customer offers for their own benefit; bonus abuse now costs the online gaming industry around 15 per cent of its total gross revenue.
In fact, a major gambling operator recently worked with our team on a bonus abuse issue they are facing. After a few days the ruleset we created for them stopped more than 30,000 bonus abusers from registering.
With predictions of gross gaming revenue globally as high as $127.3 billion by 2027, bonus abuse needs to be tackled head on to ensure such growth; so what can be done?
Understanding bonus abuse
The most common form of bonus abuse comes in the form of multi-accounting, where a fraudster would find new user bonuses and then sign up for them several times.
Criminals use synthetic identities, stolen IDs from the dark web and prepaid card details to bypass the KYC checks and enter the operator’s platform.
The criminals will abuse bonuses to ultimately resell accounts, cash out at scale or begin advantage gambling to maximise their earnings all at a loss for the operator.
Since bonuses are often exclusive to one individual, multi-accounting is often coupled with a form of IP address manipulation because previously this was the easiest way to spot a bad actor.
True bonus abusers will constantly look to innovate and automate their processes to maximize their gains however with the right tools they can be quickly spotted.
The underappreciated value of digital footprints
At SEON, we strive to ensure that operators are able to classify good and bad users in real time with next to no impact on your customers’ journey.
According to our own data the biggest challenge for fraud teams in igaming is with performing efficient manual reviews, which often increases during a bonus marketing campaign.
In total, we found 8-12 per cent of all gambling transactions require manual review but only 1-4 per cent end up in decline.
To accelerate these checks, we work with our partners to create flexible rules and triggers based on the user's digital footprint, for example is the email address linked with other social networks.
This "light" KYC check can immediately flag whether the new customer is honest or fraudulent because criminals will create an email address fast without linking to other social media accounts.
Given the interconnected nature of the world, a genuine customer is likely to have used their email address to sign up to at least one other platform than just email; this logic also applied to phone numbers.
Like most things in life, the landscape is forever changing so most importantly operators must use the solutions at their disposal and remain flexible enough to adapt to new fraud tactics.
Digital footprint analysis being implemented at the acquisition stage gives the opportunity to obtain a full picture of your customers in real-time and ultimately help curb multi-accounting.