What is Promo Abuse Fraud?
Promo abuse fraud, also called bonus abuse fraud, happens when online scammers create multiple accounts to claim promotions run by online gambling or iGaming operators. Many iGaming operators rely on special promotions or bonuses to entice new customers; however, these same promotions are prime targets for abuse and fraud due to the high monetization potential.
It mostly affects poker, casino, and sports betting websites, but any business that leverages signup bonuses as a marketing strategy may be at risk.
Fraudsters try to open as many new accounts as they can using stolen and fake identities, to claim promotions or collect bonuses. This leads to synthetic identity fraud and the use of prepaid credit card information to circumvent Know Your Customer (KYC) checks.
The Economics of Account Takeover Attacks
How Promo Abuse Fraud Works
Most systems struggle to recognize when a single user has many accounts, which means promo abusers can register using several identities in order to earn a signup bonus with each. As long as they are undetected, they will keep cashing out and carrying on. The practice is widespread and extremely profitable, leading many fraudsters to commit considerable financial resources to expanding their bonus abuse operations.
In fact, an iGaming operator’s promotions and bonuses are essential to its sustainability. These promotional incentives, whether signup, welcome, reload, or no-deposit bonuses, are frequently the most dependable strategy to expand a loyal user base.
Promotions and Bonuses in iGaming
The most popular bonuses are typically the same across the gambling industry, and they are every bit as attractive to fraudsters as they are to actual customers. These bonuses include:
Welcome (Sign Up) Bonus
This is the most typical bonus, awarded upon a player's initial deposit or full onboarding. It is calculated as a percentage of the deposit, and there often is a maximum bonus amount and a rollover requirement in the rules. Occasionally, operators give a "no deposit required" welcome bonus, so players may begin betting immediately after joining. Criminals love these opportunities.
Reload bonuses frequently have conditions like those for sign-up bonuses, but they are activated only when users return to the website, typically after a predetermined amount of time.
Free Bet (Matchplay)
Online gambling operators frequently provide free bet bonuses to players who sign up for lower-stakes games. Additionally, rollover specifications and location-specific limitations appl
These are frequently low-commission bets meant to entice repeat users or drive them to certain events.
Percentage of Losses Recovered
This is an effective strategy to retain users who are on a losing streak. At the end of a certain time period, operators may offer a part of their net losses back.
Reward programs are used to encourage loyalty and repeat business. Players can earn casino bonuses, such as free spins, free bets, and other deposits or rewards based on the amount they spend on the site.
Referral and affiliate marketing are increasingly popular, and as the online gambling industry becomes more competitive, word-of-mouth and monetary incentives are some of the most reliable methods of getting noticed.
2022 Fraud and Abuse Playbook
Beating Bonus Cheats in iGaming
When user bonus programs fall prey to identity fraud, it costs online gambling operators dearly. The first step in beating bonus abuse is spotting the scammers before they can take action. Look for signs in these areas:
- IP address: online scammers tend to use a VPN, TOR browser, or blacklisted residential proxies.
- Device: Are repeat visitors using the same combination of software and hardware?
- Speed: Super-speedy signups can be a sign of repeat fraud.
- Exits: Quick cash outs are always a red flag.
- Pattern of play: Online games with low odds tend to attract the most scammers.
Undermine the Economic Drivers Behind Promo Abuse Fraud
Arkose Labs protects global gambling and iGaming operators from evolving attacks and blocks all automated activity aimed at monetizing stolen data.
The Arkose Labs Platform analyzes data from user sessions to determine the context, behavior, and past reputation of every request. Traffic is classified and triaged based on its risk profile. Suspicious traffic is presented with enforcement challenges that differentiate between true users and fraudsters with certainty. A continuous feedback loop slashes false positives and minimizes the impact on good users.
The growing popularity of online gambling puts the industry directly in the fraudsters’ line of fire. iGaming platforms will thrive only if they can stop the fraudsters at the front door before they can infiltrate the system, while also providing a frictionless user experience. The ones that do this most effectively will be the winners that emerge as clear market leaders.