Methods of Combating Fraud and Money Laundering in Web Casinos

The gambling sphere attracts scammers, including hackers and unscrupulous players trying to profit by breaking the rules.

Rosloto’s consultants have prepared a detailed explanation of fraud in the iGaming vertical. We assist in safeguarding web casinos from intruders by installing AML and similar security modules.

Types of Gambling Scams

To support and develop businesses, operators must introduce special systems for checking and protecting against illegal activities. Usually, cases of dishonest schemes are one-off, but sometimes, criminal groups attack RMG platforms. They can cause significant harm to a project and even lead to bankruptcy.

All scams in the iGaming industry are divided into the following categories:

Players’ Fraud

This section comprises the following cases:

• unscrupulous people try to gain access to a wagering website — these are minors or visitors from regions where online gambling is prohibited;
• bonus hunters register several accounts, hoping to cash out various gifts and monetary incentives.

Organised Scams

In this case, users do not simply try to deceive the business, but commit actions such as:

• theft of personal details, which allows access to bank cards or gamers’ private pages on the platform;
• funds laundering through RMG platforms (“dirty” earnings flow into the casino, and then are withdrawn as prizes).

Both categories of fraudsters may lead to significant revenue and reputational damage, which can negatively affect the brand’s authority.

Fake Accounts

When registering on a gambling website, people must provide personal data. To avoid scams, the gaming portal administration uses KYC (Know Your Customer) checks. These measures allow entrepreneurs to verify the identity of visitors and ensure that they are real punters and not fraudsters using fake information to get additional bonuses.

KYC instruments have proven effectiveness and help protect the website from dishonest individuals.

Protocols and automated tools check the data provided by a potential player:

• the full name;
• ID (passport, driver’s licence);
• place of registration or residence;
• bank details, etc.

For instance, sometimes the system requires users to submit copies of utility bill receipts for the past few months. The documents must show the addresses of apartments or houses. Platforms may also need other documents, such as Social Security cards or individual tax numbers.

The protocols check the information against player databases. This way, it is possible to understand whether a person really provides truthful details for a fair game or whether it is a fraudster who is creating additional accounts to receive bonuses.

Verification Features in Some Countries

Working in regulated markets requires the mandatory use of KYC tools. The specifics are prescribed in the rules of jurisdictions that issue gambling licences. Control commissions monitor whether digital casinos adhere to user verification standards. This approach minimises the risks of money-laundering operations and unfair play.

Here are some examples:

• Hungary. Potential gamers provide many different details about themselves when registering. All information must match current databases. If the system detects discrepancies, the procedure will be interrupted.
• The USA. In many states, legislation requires that users specify a Social Security card number, which is a unique code. If the figures entered do not match the database, access to the website will be blocked.

Legalisation of Proceeds from Criminal Activities

Laundering “dirty” earnings involves moving funds from unlawful sources through various organisations to imitate that they were obtained honestly.

In the iGaming industry, the process occurs as follows:

• the criminal creates an account;
• deposits a large sum;
• makes several small bets;
• withdraws the remainder to a legal account as prizes.

It is pretty challenging to uncover such fraudsters. They register on different platforms and divide the funds into moderate amounts. To notice money-laundering attempts, qualified personnel and appropriate software are needed.

An all-around approach allows for the timely identification of illegal activities and the detection of users who make small deposits on dozens of or even more platforms and withdraw them after 2–3 bets.

Regulators of the vast majority of jurisdictions issuing licences for gaming activities require compliance with AML laws.

Common methods used by RMG entrepreneurs:

1. Staff training. Regular sessions for employees are recommended. They should clearly understand the money-laundering process and what signs indicate illegal user activity.
2. Modern software. Reliable systems and additional tools warn of possible fraudulent schemes being applied.
3. Transaction verification. If suspicions arise, it is necessary to explore the accounts and recent operations related to them. If the same people often make large deposits and withdraw funds almost immediately, it is money laundering.
4. Audit. A checkup can be performed independently or by 3rd parties. Casino managers need to monitor employees regularly to determine whether any are engaged in illegal schemes.
5. Compliance ensuring. Ideally, the company should have a separate specialist responsible for adherence to regulatory standards.
6. Detailed user verification. Effective tools help obtain important information about visitors. Collection methods should not repel potential clients with excessive requirements for providin personal details.
7. Data transfer. Reporting systems are recommended. Some jurisdictions require gaming platform owners to promptly send records about any suspicious situations to compile an up-to-date register of fraudsters.
8. Financial accounting. Different regions have unique requirements for currency operations. For instance, all transfers that exceed $10,000 must be reported.

Payment services have adopted specific AML standards to ensure protection from potential losses.

The Main Things About Combating Scams in Web Casinos

To build a successful and profitable gambling business, entrepreneurs need reliable security systems. They will help avoid hacker schemes, unfair play, and legalisation of “dirty” earnings.

Among the primary methods:

• Detailed verification of users. This category includes not only passport data but also confirmation of physical address and Social Security number.
• Use of modern programs. Such instruments track financial transfers and detect unusual or suspicious actions.

The Rosloto studio offers high-quality gambling software that will protect your project from fraud. Feel free to contact us for assistance with its integration.