The gambling industry has enjoyed incredible growth in recent years. The most up to date figures suggest 2.2 billion gamers across the globe generated $108.9 billion in revenues in 2017 – an increase of $7.8 billion, or 7%, from 2016. This growth has led to increased competition among operators for consumer attention. More and more, they are opting to offer new sign-up bonuses, usually in the form of money gamers can spend playing on their sites. Sign-up offers are an excellent way of catching consumers’ eyes and drawing them in but they can lead to bonus abuse.

Sign-up bonuses have their downsides when it comes to fraud. The growing use of monetary bonuses has resulted in a sharp increase in the instances of bonus abuse, a tactic fraudsters use to take advantage of an operator’s sign-up bonus promotion by opening multiple accounts with different email addresses. In fact, a recent survey conducted by iGaming Business and Emailage found 62% of operators see bonus abuse as the form of fraud that negatively affects their business the most.

Tackling bonus abuse is crucial if operators want to continue to provide the kind of bonus promotions that really engage customers. But, how can they achieve this without impacting on their customer experience?

Understanding bonus abuse

One common way of carrying out bonus abuse is known as “gnoming.” Gnoming is the process of setting up multiple accounts with multiple aliases from the same physical address. This is prohibited by most operators to ensure genuine customer details and not that of an alias’.  Many operators have a one account per household, IP address, and access device” requirement, despite the risk of losing out on revenue from other individuals living at the same address.

In addition, it’s common for customers to share their personal documents with fraudsters in exchange for money. The fraudster then uses the customer’s identity to bypass KYC checks when setting up new accounts, allowing them to reap the benefits of bonuses that the customer would otherwise receive. By doing this, bonus abusers can use the identity of many customers and collect the winnings generated without having to invest their own funds.

Balancing fraud busting and customer experience

An effective solution to the issue of bonus abuse is to increase the number of customer authentication steps in the account set-up process. Traditional customer authentication methods can add friction to the customer sign-up process. Too much friction and customers could be put off and abandon the account creation process, causing operators to lose revenue and potential customers.

There are solutions available that are capable of striking the balance between bonus abuse protection and providing a frictionless customer experience. Solutions like the Emailage EmailRisk Score help online gambling experts to reduce bonus abuse, prevent account takeover, and fight other forms of fraud while delivering a seamless customer experience. The EmailRisk Score reduces the time needed for manual reviews by analyzing user data such as email address and device information while remaining compliant to online gambling regulations. This analysis, which takes less than a second, uses automated rules and custom fraud modeling, backed by a massive consortium of data to automatically approve more legitimate players while stopping fraudsters. Customers and online gambling operators alike benefit from a safer and faster authentication process.

Act now and save time later

Online gambling operators often find themselves balancing between optimizing the customer journey, maintaining regulatory compliance and ensuring maximum protection against bonus abuse and other fraud. However, with the right risk mitigation solutions in place, operators can have the confidence they need to successfully achieve all three goals. With their revenue and processes protected from fraud, gambling sites can have the stability they need to grow and thrive in this increasingly competitive market.

bonus abuse report