Bonus Abuse in Online Gambling – Not just Fun and Games

In the fast-paced world of online gambling, enticing bonuses have become a go-to strategy for iGaming operators to attract new players. These promotions offer players bonus funds, free spins, or other incentives to encourage them to join and play on their platforms. While these bonuses can be beneficial for both players and operators, they have also given rise to a nefarious practice known as “bonus abuse.”

Understanding Bonuses in Online Gambling

Bonuses offered by gambling operators come in various forms, such as sign-up bonuses, deposit match bonuses, no deposit bonuses, reload bonuses, cashback, free bets, reward programs, and refer-a-friend bonuses. They are designed to entice players to wager more, thereby benefiting both the player and the operator.

However, some players exploit these bonuses for malicious activities like money laundering, which poses significant challenges for the iGaming industry. Bonus abuse involves players signing up to a gambling platform to manipulate the promotion to their advantage, taking advantage of repeated bonuses by creating multiple accounts, and engaging in other fraudulent practices.

The Tactics of Bonus Abusers

Fraudsters resort to various tactics to abuse bonuses and exploit the system for their illicit interests. One common approach is exploiting loopholes in the terms and conditions of bonuses. For example, certain games with lower house edges, like blackjack and poker, are often excluded from bonuses to prevent matched bettors from exploiting the promotion. However, bonus abusers find ways to circumvent these restrictions and use the bonus funds to play these excluded games.

Another tactic employed by bonus abusers is the creation of multiple accounts. Most gambling platforms have strict policies against multiple accounts per user, but fraudsters bypass these rules by using VPNs, TOR browsers, or blacklisted residential-like proxies to create new accounts.

Furthermore, sophisticated criminals may engage in identity theft and manipulation. They acquire real ID documents from the dark web to defraud gambling platforms, bypassing weak KYC checks by using a combination of real-person and fake data to form a new identity.

The Impact of Bonus Abuse on the iGaming Industry

Bonus abuse has a significant impact on the iGaming industry, leading to financial losses for operators and posing regulatory challenges. To address this issue, iGaming operators can take several proactive measures to combat bonus abuse. Here are some strategies they can employ:

1. Implement Stricter Bonus Terms:
   • Set clear and detailed bonus terms and conditions that explicitly outline the rules and restrictions related to the use of bonuses.
   • Specify which games are eligible for bonus funds and which ones are excluded to prevent players from exploiting lower house edge games.
   • Impose wagering requirements that players must fulfill before they can withdraw bonus funds or winnings, making it harder for bonus abusers to cash out quickly.
2. Adopt Advanced KYC and AML Checks:
   • Strengthen the Know Your Customer (KYC) processes to verify the identity of players and detect any suspicious behavior or fraudulent activities.
   • Leverage Anti-Money Laundering (AML) checks to identify potential money laundering attempts and flag high-risk transactions.
3. Utilize Behavioral Analysis:
   • Use behavioral analysis tools to monitor player activities and detect patterns that may indicate bonus abuse.
   • Analyze registration times, betting behavior, withdrawal patterns, and preferred games to identify abnormal or suspicious activities.
4. Employ IP and Device Tracking:
   • Track IP addresses and devices used for account registration to identify multiple accounts created by the same user or device.
   • Detect the use of VPNs, TOR browsers, or blacklisted proxies to circumvent account creation restrictions.
5. Share Information with Industry Peers:
   • Collaborate with other iGaming operators to share information and best practices for preventing bonus abuse.
   • Establish industry-wide standards to create a united front against fraudulent activities.
6. Monitor Affiliate Programs:
   • Implement stringent measures to monitor and evaluate affiliate programs to ensure that affiliates are not promoting bonus abuse.
   • Regularly audit affiliate activities to identify any suspicious behavior.
7. Educate Players:
   • Educate players about the consequences of bonus abuse and the importance of adhering to the terms and conditions set by the operator.
   • Provide clear information on the rules governing bonus usage to prevent unintentional violations.
8. Evaluate Loyalty Programs:
   • Consider shifting the focus from sign-up bonuses to loyalty programs to encourage player retention.
   • Reward players based on their ongoing activity and loyalty rather than providing multiple sign-up bonuses.
9. Penalize Abusers:
   • Actively monitor for bonus abuse and take swift action against those who engage in fraudulent activities.
   • Confiscate bonus funds, winnings, and deposits from accounts involved in bonus abuse and impose penalties to deter future abuse.
10. Continuous Improvement:

• • Stay updated on the latest fraud trends and continuously improve fraud prevention measures.
  • Embrace innovative technologies and solutions to stay ahead of evolving bonus abuse tactics.

By implementing these strategies, iGaming operators can better protect their platforms against bonus abuse, safeguard their financial interests, and create a secure and enjoyable gaming experience for legitimate players.

Preventing Bonus Abuse – Striking the Right Balance

Operators have grappled with the dilemma of offering attractive bonuses to attract players while preventing bonus abuse. Some opt to remove deposit bonuses altogether, but this approach may deter potential customers who find bonuses appealing.

Others choose to offer loyalty bonuses instead of sign-up bonuses, encouraging players to remain loyal to the platform without exploiting the bonuses repeatedly. However, this strategy may not be as enticing to casual gamblers who are drawn to the allure of sign-up bonuses.

Finding the right balance between enticing players and preventing abuse is essential for iGaming operators. Stricter bonus terms, lower bonus payouts, and robust KYC processes can all contribute to reducing bonus abuse while maintaining an appealing player experience.

Conclusion

Bonus abuse has emerged as a dark side of the online gambling world, posing a significant threat to the iGaming industry. Fraudsters exploit bonuses through various tactics, including loophole exploitation, multiple account creation, and identity theft. The financial losses incurred by operators due to bonus abuse necessitate proactive measures to combat this menace.

By implementing stricter protocols, raising awareness, and leveraging advanced KYC and AML checks, iGaming operators can protect their platforms against bonus abuse and bonus hunting. Striking the right balance between offering attractive bonuses and preventing abuse is crucial for creating a safe and appealing environment for all players.

With constant vigilance and the use of innovative fraud prevention tools, the iGaming industry can stay ahead of cybercriminals and ensure a secure and enjoyable gambling experience for players around the world.

Read more about how to protect your casino from Bonus and promotional abuse in these articles:

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