LOGAN PORTER Director of Solution Engineering, SEON
One effective approach is leveraging digital footprint analysis to spot fraud patterns often linked with bonus abuse, such as the use of VPNs, proxies or Tor networks, which may indicate attempts to evade detection. By analysing sign-up patterns, deposits and withdrawals, operators can detect deviations from normal player activity that may signal potential abuse.
Bonus Abuse Evolving Tactics
Fraud in iGaming takes various forms, but bonus abuse is arguably the most detrimental
accounting for an average 15 per cent loss of providers' annual gross revenues. Logan Porter, Director of Solution Engineering at SEON, explores how companies in the sector can start taking action to combat this growing problem.
What is bonus abuse and how is this particular type of fraud affecting the iGaming industry?
Bonus abuse is a big issue in the iGaming sector, and it seems to get worse yearly. Te term refers to a practice where individuals exploit promotional offers intended for new users to gain unfair advantages or profits. It is a sophisticated form of fraud that leverages vulnerabilities in operators’ processes to exploit promotional incentives designed for new players.
Bonus abusers manipulate promotions by creating multiple accounts, collaborating with others or employing betting patterns that minimise risk while maximising the benefits. Such activities violate the terms and conditions of the platforms and can lead to account suspension, forfeiture of winnings and in some cases, legal action. Moreover, they pose a sizeable financial cost to operators.
In the highly competitive industry, bonuses are a crucial marketing tool that helps providers differentiate themselves. Our research from last year revealed that fraudulent players misuse bonuses 2.7 times more frequently than legitimate users. Tis type of abuse is especially prevalent in regions like Latin America, where higher approval rates have made bonus exploitation more common.
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What are some typical methods of bonus abuse?
Tere’s more than one way for a fraudster to abuse bonus systems. As previously mentioned, creating multiple accounts to claim the same bonus repeatedly is a popular tactic. Additionally, fraudsters will often use fake or stolen identities to bypass security checks and engage in strategies like arbitrage betting or collusion to manipulate outcomes and guarantee winnings with little risk. Tese tactics often differ by region. Company research from 2023 found that fraudsters in Europe prefer using sophisticated tools like virtual machines to bypass robust risk management systems. Meanwhile, fraudsters in Asia derive most of their fraud value through basic click-farm-type bonus abuse setups. While there is a huge difference in the methods and techniques deployed by fraudsters, it’s a problem affecting nearly all operators today.
How can iGaming operators prevent bonus abuse?
Regardless of the tactic they use, fraudsters who abuse bonuses threaten gaming platforms' financial stability and the industry's fairness. Central to the issue is inadequate online identity verification processes that fail to detect signs of fraudulent activities. As such, operators must implement stringent verification processes, monitor player behaviour, and adopt advanced anti-fraud technologies to detect and prevent abuse.
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