October 5, 2022
Top 5 Types Of Fraud In Online Gambling

Top 5 Types Of Fraud In Online Gambling

5 Types of Fraud in Online Gambling You Need to Know

According to estimates, online gambling generated almost $30 billion in 2010, which was almost twice the figure estimated for the previous four years.  Today, the figure is estimated to be even higher. Obviously, any industry with such large amounts of money running through it is bound to become a major target for crooks and fraudsters eager to get a slice. While online gaming is not vulnerable to certain strategies that fraudsters use in land-based casinos, cybercriminals and fraudsters have many ways to play with the system.

The following are the major 5 types of online gambling frauds:


Bonus abuse

According to estimates, there are approximately 2,000 gambling sites, which, like other businesses, are all competing for clients.  Numerous online casinos will offer various kinds of bonuses to pull and maintain customers. These may include welcome bonuses, referral, as well as bonuses to regular players, or just to draw some players back to the website.

One of the ways gamblers normally use to commit bonus abuse it to register for many accounts, which allows them to get many bonuses.  However, on receiving the bonus, they will still need to bet the bonus sum specific times to withdraw it. They usually achieve this by colluding.



Collusion involves the collaboration of two players or more to influence a specific result.  Alternatively, one person uses many accounts to actually accomplish the same thing. The most preferred target of conspiracies is online poker although it may as well happen in other games such as blackjack.  Players can at times conspire to commit a bonus fraud. Two players may, for example, register and deposit $500 to a get sign up bonus of $50, and then just lose to each other till they fulfill the rollover conditions.  On meeting the requirement, they can cash out, with each pocketing $50. In some instances, they may decide to open a fresh account and repeat the same thing.


Chip Dumping

As another type of collusion, chip dumping is generally usually done to achieve a different objective.  Sometime some criminal elements s use online casinos to either launder money or pay for illegal services.  As gambling winnings are deemed as legal income, they can be actually banked and claimed on taxes. Crooks who receive huge amounts of money for illegitimate ventures know that it is difficult for them to simply walk into the bank, deposit their illicit income, and not raise any suspicion.  This is why they employ people to bet online and deliberately lose to a single person, who then cashes out. Such illegal money may then be shown to be legitimately earned.


Credit Card Fraud

High profile data violations are increasing, making it easy to obtain financial data as well as credit information.  However, monetizing those details is something else. Some cyber criminals can actually use such stolen information to buy gift cards or some other luxury things that they can in turn sell at a profit.  But in comparison, what online casinos may potential y offer is far more lucrative. This is why the majority of cryptocurrency exchanges forbid users to buy bitcoin using credit or debit cards – particularly due to chargeable abuse.  Still, a crook can use a stolen credit card to top up a casino account and then withdraw in the form of bitcoin.


Chargeback Abuse

Chargeback abuse is at times called “friendly fraud” and it usually happens when a legal account holder contacts his/her bank /card issuer and denies to have ever made a charge to a casino site.  As numerous online gambling businesses are situated overseas, or might not even be licensed, in most cases, the company will reverse the charges hence leave the casino to take the responsibility. While the gaming company may fight the charges, their relationship with the main card issuers can be badly damaged if they get multiple chargebacks.  In most instances, absorbing the loss is more affordable than fighting it because if they lose the ability to accept a major issuer’s credit payment, it can affect their business.


To learn more online casino articles, click links below:

  1. Chargeback Casinos: Everything You Need To Know About Online Casino Chargebacks
  2. How casinos try to prevent cheating


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