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What is Online Gambling Fraud?

The world of online gambling is vast and rapidly growing, with millions of people participating in various forms of betting every day. There are many reasons for this growth, including cultural approval, legalization, easy access to online gambling, celebrity endorsements, and corporate sponsorships. But perhaps the biggest driver of the growth of online gambling is increased internet penetration and the rise in the use of mobile phones among users for playing online games.

With this growth comes an increased risk of fraudulent activity. Online gambling fraud can take many forms, including account takeover (ATO) fraud, bonus abuse fraud, credit card fraud, and betting bots.

Here, we will discuss what online gambling fraud is and explain how to prevent it through—among other things—identity verification, account monitoring, transaction analysis, and cooperation with law enforcement agencies.

What is Online Gambling Fraud?

Online gambling fraud refers to any illegal activity that is intended to defraud or cheat legitimate players or an online gambling platform. There are rules, of course, governing online gambling. But fraudsters can bend or break these rules to increase their winnings. They do this in different ways, including rigged games, fake websites, and account takeovers.

Online gambling fraud is not limited to a specific type of game or platform—it can occur in any form of online gambling, including casino games, sports betting, and lottery games. Players should be aware of the signs of online gambling fraud and take steps to protect themselves. And operators must fortify their own websites and apps to mitigate financial risks to themselves and their customers.

Online Gambling Fraud

Why Online Gambling Sites are Prone to Fraud

Online gambling sites are prone to fraud for a few reasons, but the biggest one is the amount of money to be made. The global online gambling market was valued at USD 63.53 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of almost 12% from 2023 to 2030.

Revenue in the online sports betting market alone is projected to reach USD 43.55 billion in 2023 and is expected to grow at a compound annual growth rate (2023-2027) of nearly 10%, resulting in a projected market volume of USD 63.62 billion by 2027. That kind of money attracts operators, bettors, and cybercriminals alike.

Online gambling sites are also prone to fraud due to the lack of face-to-face interaction and anonymity. Fraudsters have a higher chance of using stolen credit cards or perpetrating new account fraud, which causes financial losses to operators and to genuine customers. They may also collaborate with other players to fix the game's outcome, leverage software vulnerabilities to cheat the system, or perpetrate other online gambling scams.

Moreover, fraudsters may use sophisticated techniques like phishing emails and social engineering tactics to gain access to customer data. Therefore, it is important for online gambling sites to implement strong security measures that protect their customers' information and detect fraudulent activities quickly.

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2023 Cyberthreat Defense Report
2023 Cyberthreat Defense Report

Common Types of Online Gambling Fraud

Common types of fraud in the online gambling industry include account takeover fraud (which leads to identity theft) bonus abuse, credit card fraud, and bot fraud.

Account Takeover Fraud

One of the most common types of online gambling fraud is account takeover fraud (ATO). This occurs when an attacker gains access to a player's gambling account by way of stolen credentials, phishing scams, or social engineering, and uses it for their own benefit, resulting in the loss of funds and personal information.

To prevent account takeover fraud, players can take several steps, such as using strong passwords, enabling multi-factor authentication, and monitoring their account activity regularly.

Bonus Abuse Fraud

One common type of online gambling fraud is bonus abuse fraud—sometimes referred to as promo abuse fraud—which occurs when a player exploits the terms and conditions of a bonus offer to gain an unfair advantage. This can take many forms, such as opening multiple accounts to claim multiple signup bonuses or using fake information to register for an account. Another strategy some players employ is "bonus hunting," where they only play games with high bonus payouts and then immediately cash out.

To combat this type of fraud, online casinos may limit bonuses to one per household or IP address while closely monitoring player behavior for any signs of fraudulent activity.

Credit Card Fraud

Online gambling fraud can take many forms, and credit card fraud is one of the most common types. Criminals may steal credit card information to make unauthorized transactions on gambling websites, or they may use fake or stolen credit cards to make deposits and withdrawals. If you suspect any fraudulent activity on your credit card, it's important to contact your bank immediately to report the issue and get them to issue a new card with new numbers.

Bot Fraud

A betting bot is a code or script that can automatically assess the odds in a game and bet accordingly without human intervention. They are also known as value-betting software, gambling bots, or casino bots.

While their primary function is to expedite wagering on sporting events or other events (often via APIs), more advanced bots can infiltrate online poker tables and other multiplayer games. Someone can control a table and determine the result of a game by creating many phony identities. Betting bots often play many hands in the same game and employ sophisticated strategies to boost payouts and dominate a game. The majority of online casinos offer tools to identify account bots, but hackers have advanced techniques for getting around and avoiding detection algorithms.

Online Gambling Fraud

Preventing Online Gambling Fraud

There are several ways to minimize the risk of online gaming fraud. Strong authentication measures are needed to verify user identity, and bot management and fraud detection tools should also be used.

Identity Verification

The identity verification process ensures that players are who they claim to be before they can start playing. Identity verification methods may include checking IDs, verifying addresses, or even collecting biometric data like fingerprints or facial recognition.

To further secure player accounts, some online gambling sites also use two-factor authentication (2FA) or multi-factor authentication (MFA). It's important for players to be cautious of sites that do not require identity verification, as they may be more susceptible to fraud and scams.

Ultimately, both the gambling site and the player have a responsibility to take steps towards preventing fraud and protecting personal information. By implementing identity verification measures, online gambling sites can better ensure the safety and security of their players' sensitive information.

Account Monitoring

For consumers and operators alike, keeping a close eye on online gambling account activity can help detect any unusual or suspicious transactions. It's important to regularly check your account statements and report any unauthorized transactions immediately to the gambling site's customer support team.

In addition to monitoring your account, using strong passwords and enabling two-factor authentication can also help prevent unauthorized access to your account. Some gambling sites may offer additional security features, such as player protection tools and self-exclusion options, which can help reduce the risk of fraud.

Transaction Analysis

Transaction analysis involves monitoring and analyzing transaction data to identify any suspicious activity that may indicate fraud. Red flags for online gambling fraud include unusually large bets or frequent deposits from multiple accounts.

Cooperation with Law Enforcement

Cooperation with law enforcement agencies is critical to preventing and prosecuting online gambling fraud. This includes sharing information and working together to identify and prosecute individuals or organizations involved in fraudulent activities. Additionally, such cooperation helps to deter potential fraudsters from attempting to exploit online gambling systems in the first place.


Online gambling fraud is a serious issue that causes millions of dollars in financial losses, legal issues, and reputational damage for the gaming industry as a whole, and leads to a poor customer experience for legitimate players. With the expansion of online gambling, it's more important than ever to take preventative measures such as identity verification, account monitoring, transaction analysis, and cooperation with law enforcement agencies.

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Our AI-powered platform combines defense-in-depth detection with dynamic attack response to navigate unclear trust signals without disrupting the good user experience. Want to learn more? Book a demo today!