Here’s How to Fight Bonus Abuse in Online Gambling

Bonus abuse is one of the major fraud attacks that target gambling platforms, especially in newly regulated markets. By partnering with CAF, gambling operators can easily bear the dual responsibility of fighting bonus abuse and ensuring player safety to comply with the regulatory requirements

Online gambling is a thriving industry with the market size reaching $263.2 billion in 2023. It is also a fiercely competitive market with platforms trying to acquire new customers and expand their market share by offering several incentives, including bonuses and promotional offers.

New player bonuses are a common marketing strategy gambling operators use to attract and retain customers. Operators may design these promotional offers and bonuses in various forms. These may include:

• Welcome Bonus: Offered to new customers on signing up or making their first deposit.
• No Deposit Bonus: A small amount of bonus funds awarded to players without requiring them to make a deposit.
• Free Spins: Common in online casinos, offering players a certain number of free spins on specific slot games.
• Reload Bonus: Similar to a welcome bonus but offered to existing customers when they make additional deposits into their accounts and incentivize them to continue playing on the platform.
• Cashback: Provides players with a percentage of their losses back as bonus funds or cash to help them mitigate losses and continue playing.
• VIP and Loyalty Programs: Rewards frequent players with points, exclusive bonuses, personalized customer support, invitations to events, or other rewards based on a player’s level of activity.
• Special Promotions: May be tied to specific events, holidays, or new game releases; and may include prize draws, leaderboard competitions, or limited-time bonuses with enhanced rewards.
• Free Bet: Also called Matchplay, offers players a specified amount of betting credit, usually equivalent to the amount of their initial wager, to use on eligible bets. If the bet wins, players receive only the winnings, while the stake amount is retained by the operator.
• Reduced Juice: The sportsbook reduces the standard vigorish (or "vig") charged on bets for better odds for bettors, resulting in attracting more customers and encouraging increased betting activity.
• Referral Bonuses: Incentivize existing players to refer friends or acquaintances to the platform, by offering rewards such as bonus funds, free bets, or other incentives to both the referrer and the new player, when the referred individual signs up and meets certain criteria. 

Bonus Abuse in Gambling

It is no secret that the magnitude of potential financial gain makes online gambling platforms lucrative for several types of fraud. 

In recent times, bonus abuse has become such a big headache that gambling platforms explicitly prohibit it in their terms and conditions with clear warnings of confiscating bonus funds, closing accounts, and banning from future promotions or services offered by the platform. Despite these warnings, bonus abuse continues to grow.

How Bonus Abuse Fraud Works

Bonus abuse fraud in gambling involves exploiting the terms and conditions of bonuses, promotions, or incentives offered by gambling platforms for illicit gains. Fraudsters create several accounts using different identities, email addresses, or IP addresses to bypass restrictions on bonus eligibility. They may also use software or proxies to hide their identity or location. In some cases, fraudsters may collude with others by sharing account information or coordinating their actions to maximize the benefits obtained from bonuses.

Fraudsters look out for opportunities where they can exploit differences in odds or bonus terms across different gambling platforms to place bets on all possible outcomes for guaranteed profits. They may exploit limited-time offers by quickly signing up, claiming the bonus, and withdrawing funds without engaging in legitimate gameplay.

Furthermore, fraudsters may submit falsified or forged documents during the account registration or verification process to bypass identity checks and claim bonuses they are not entitled to. They may also use stolen user credentials for account takeover activities to compromise legitimate user accounts and exploit bonuses. 

Common Methods of Bonus Abuse

There are several ways fraudsters engage in bonus abuse on gambling platforms. These include:

• Multiple Accounts: Claim bonuses multiple times by creating multiple accounts using different email addresses or personal information to bypass restrictions on bonus eligibility.
• Bonus Hunting: Strategically use bonuses and promotions to guarantee profits by exploiting favorable terms and conditions, such as low wagering requirements or high-value bonuses relative to the deposit.
• Arbitrage Betting: Place bets on all possible outcomes of an event across multiple betting platforms to secure a profit regardless of the outcome, solely with the purpose of exploiting bonuses.
• Bonus Bagging: Exploit temporary or limited-time offers by quickly signing up, claiming the bonus, and withdrawing funds without engaging in further play.
• Mismatched Betting: Manipulate bonus offers to create risk-free or low-risk bets for guaranteed profits.
• Low-risk Wagering: Place bets on low-risk outcomes or with low odds, only with the purpose of meeting the wagering requirements, while minimizing potential losses. 

How Online Gambling Platforms Can Fight Bonus Abuse

Bonus abuse not only causes financial losses for gambling platforms but also leads to operational disruptions, reputational damage, and legal consequences. It is therefore critical that gambling operators stop bonus abuse and protect the integrity of their bonus and promotion programs. Some measures they can consider are:

• Strict Terms and Conditions: Implement detailed terms and conditions for bonuses and promotions, outlining eligibility criteria, wagering requirements, game restrictions, and any other relevant rules.
• Account Verification: Verify player identities and require them to provide legitimate documentation during the account registration process to ensure each player has only one account.
• Bonus Restrictions and Limits: Specify limitations on the use of bonuses, such as restricting certain games or wager types, imposing maximum bet sizes, and setting time limits for bonus redemption.
• IP and Device Tracking: Monitor IP addresses and device information to detect and flag suspicious patterns of activity, such as multiple accounts being accessed from the same IP address or device.
• Anti-fraud Algorithms: Use advanced algorithms and machine learning techniques to analyze player behavior and detect patterns such as betting patterns, deposit and withdrawal activity, and account history.
• Identity Verification Solutions: Gambling operators must implement robust user verification solutions that can effectively detect and prevent fraudulent account registration attempts. Automated user verification solutions leverage the latest technologies such as artificial intelligence, machine learning, behavioral biometrics, and facial recognition to deliver faster, more accurate, and ongoing user authentication, enabling operators to ensure that the user trying to register is really who they claim to be. Furthermore, operators must choose solutions that can adapt to the evolving regulatory requirements and make it easier to comply with the changing regulations.
• Regular Audits and Compliance Checks: Perform regular audits of bonus-related activities to ensure compliance with regulations and internal policies.
• User Awareness: Provide comprehensive resources to educate users on bonus terms and conditions, as well as about the consequences of fraudulent behavior, thereby increasing awareness of the risks associated with bonus abuse fraud and encouraging players to avoid unethical practices.
• Collaboration: Gambling operators, regulatory authorities, and industry stakeholders should work collectively to combat bonus abuse fraud. When operators share information, best practices, and technological solutions, they can mitigate the economic gain that incentivizes fraudsters to engage in bonus abuse and create a more trustworthy gambling environment.

Fight Bonus Abuse With CAF

The twin burden of fighting innovative bonus abuse tactics while navigating the legal complexities can be a tough ask for gambling operators in Brazil. Therefore, online gambling platforms operating in Brazil need a partner that has demonstrated expertise and experience in the country’s gambling market.

This is where Brazil-born CAF enjoys a unique advantage; with a comprehensive suite of tailor-made solutions for the online gambling market in Brazil, CAF delivers robust customer verification, which is faster, more secure, and seamless.

CAF provides online gambling platforms with the flexibility to customize workflows, enabling them to onboard only genuine players, thereby preventing bonus abuse effectively. The ability to personalize user onboarding experiences in a customer-centric manner enables operators to improve conversion rates and maintain a trustworthy digital gambling environment. 

To see how CAF’s solutions thwart bonus abuse attempts, book a demo now.