Almost three quarters (71%) of online gambling merchants have experienced an increase in promotion abuse in the last year, representing a significant dent in revenues, reveals fraud detection and payment acceptance specialist Ravelin.
Ravelin’s ‘Digital Goods Merchant Report 2022’, surveyed 1,700 international fraud and payment professionals at online merchants and found that fraud risks are growing quickly across the board, with 62% of all types of online merchants reporting an increase in fraud and new types of fraud attacks in the last 12 months.
Drilling down into promo abuse, many online gambling services use incentives such as discounts, loyalty rewards, sign-up bonuses or free money for bets as common marketing tactics to entice customers. Fraudsters exploit these promotions by setting up multiple accounts from different email addresses, devices or IP addresses, which means businesses are giving away a lot of free money.
Online payment fraud is another big risk to online gambling merchants, with 67% reporting an increase in fraudsters taking advantage of consumers needing to set up accounts to gamble, and then storing card details and making payments online.
Martin Sweeney, CEO at Ravelin, comments: “Gambling websites often have high transaction volume, with players making a lot of payments regularly which can make it difficult to detect fraudsters card testing or even catch individual fraudulent purchases. Bolstering your fraud detection with an external machine learning platform is crucial to meet the growing complexity and variety of tactics used by fraudsters.”
Fortunately, the Ravelin survey shows the industry is responding quickly, with a significant 90% of online gambling merchants predicting an increase in budget and 85% an increase in fraud team members to help combat the increasing threats.