Understanding bonus abuse in online gambling allows operators to take the necessary precautions to offer promotions that gamblers cannot misuse in unfair gaming practices that can ruin a platform’s reputation. In this article, we’ll cover how players have typically abused bonus schemes and highlight the most effective bonus abuse prevention strategies that operators can use to protect their sites and players’ security.
What is Bonus Abuse on Online Gambling Sites?
Bonus abuse occurs when players unfairly exploit the bonus promotions which are offered on online gambling platforms to attract and retain customers. From bonus hunting to chip dumping, bonus abuse can take different forms and can negatively impact gambling operators’ reputations and compromise players’ security.
Quick Facts About Bonus Abuse
Bonus abuse fraud involves using various tactics to manipulate welcome bonuses, free spins, free bet promotions, and other offers to the player’s advantage.
- The most common bonus abuse practices include multi-accounting, chip dumping, collusive betting, identity fraud, and arbitrage betting.
- There are different ways to prevent potential promo abuse, including monitoring user behaviours, implementing know-your-customer (KYC) procedures, following anti-money laundering (AML) guidelines, and using surveillance tools.
What Are Bonuses & What Types Can Players Claim?
Bonuses refer to incentives offered by online casino sites or sportsbook sites to welcome new players and retain existing customers. The most common casino bonuses offer players free bonus money after meeting wagering requirements and free spins, depending on the offer, which extends playing sessions. Dishonest players who engage in bonus hunting and other unwanted practices usually look to exploit the types of promos below.
- Welcome Bonuses: Also known as sign-up bonuses or first deposit offers, welcome bonuses refer to promotions offered by online casinos or sports betting sites to welcome new players.
- Free Spins: Free spins come with tens or hundreds of bonus spins that allow players to spin the reels of their favourite slot games several times without depositing real money.
- Deposit Bonus Offers: Some bonuses require casino players to make deposits to claim these extras, which are generally tiered by deposit.
- No-Deposit Bonuses: Some operators offer no-deposit free spins or site credit before requiring a deposit, allowing you to play games without spending your own money.
- Free Bet Promotions: Free bets are sportsbook bonuses that allow bets on sports matches without the wager being deducted from bettors’ accounts.
- No-Wagering Bonuses: Wager-free or no-wagering casino bonuses do not have wagering requirements to meet before rewards can be claimed.
- Reload Bonuses: These are additional deposit bonuses given to existing players who have already used their sign-up bonuses.
The Promotional History of Bonuses at Casinos
Before online casino sites existed, land-based casinos used to attract and retain players by offering complimentary drinks, discounts on food items, and loyalty rewards among other special offers. After the 1990s, new bonuses introduced as “welcome offers” began to appear, aiming to attract new players in the increasingly competitive online casino industry. This sector has grown tremendously since then as the internet has evolved, leading to more bonus benefits for players who sign up and deposit money at online casinos; this, unfortunately, has also led to increased instances of online bonus abuse and fraud.
Common Bonus Abuse Practices on Gambling Sites
For online gambling platform operators to thwart potential bonus abuse fraud, it is crucial to know some of the various techniques that players often use to benefit from these promotions unfairly.
Identity Fraud
Identity theft and fraud are common promo abuse practices that entail stealing and misusing another person’s details such as stolen credit card information or social security number for illegal purposes. Some players use other people’s details to exploit sign-up bonuses on various casino or sportsbook sites, bypassing restrictions on creating multiple accounts. They can even use stolen ID documents from family members, friends, or coworkers to claim welcome bonus offers outside the rules.
Arbitrage Betting
Arbitrage betting is another fraudulent activity that online gambling operators need to be aware of to stop bonus abusers from succeeding. It involves placing several bets on all possible outcomes of a sporting event to guarantee profits irrespective of which team wins the game. Fraudsters who use this method capitalise on the different odds offered by various bookmakers.
Affiliate Advertising Invalid Traffic
Affiliate programmes make it easy for operators to attract new players, but they create loopholes for some people to engage in bonus abuse fraud. This involves affiliates who aim to exploit their commissions by generating fake traffic through multiple referral links and email addresses, without returning many real customers to the online casino site. Fraudsters can also earn bonuses by colluding with affiliate marketers to generate referrals.
Collusive Betting
Collusive betting in online gambling occurs when two or more players collaborate to place bets across one or several accounts, which is considered cheating according to most terms and conditions for bonus offers. Multiple players coordinate their actions, placing bets strategically to ensure that at least one of them wins. Collusion can help bettors exploit the bonus system and undermine fairness in online gambling.
Gnoming or Multi-Accounting
Also known as multi-accounting, gnoming is a common promotion abuse method in which fraudsters create multiple accounts using stolen information or fake accounts. Those who engage in this practice can misuse free cash, free bets, and repeated bonuses. For example, they can take advantage of claiming multiple welcome bonuses meant for a new individual player.
Chip Dumping
Chip dumping is a collusive betting practice that entails several players working together to cheat other participants in a game. This form of bonus abuse in iGaming is prevalent in online poker games. The fraudsters deliberately lose chips to other players, intending to transfer bonus-abused chips or credits to other gamblers.
The Impact of Bonus Abuse on the iGaming Industry
According to Statista’s estimates between January 2022 and February 2023, fraud through mobile apps cost the online gambling industry approximately USD 1.2 billion. Failure to prevent or stop bonus abuse can have the following negative impacts.
- Operators might lower bonus payouts by offering less generous bonuses to players.
- Casinos and sportsbooks can lose money due to money laundering.
- Operational costs increase in the attempts to mitigate bonus promo abuse.
- Casinos experience a decline in reputation as players lose trust in the fairness of their games.
How Bots Derail Targeted Marketing Campaigns
Did you know that bots can derail targeted marketing campaigns? AI bots can exploit site traffic or betting features drain valuable operators’ project resources. They do so by reducing the number of PPC conversions, which are monitor the actions users take after clicking a link to land on an operator’s site. This further distorts marketing statistics and corrupts data tracking analytics for operators.
How Can Online Gambling Operators Safeguard Against Fraud?
Safeguarding against bonus abuse among players and other types of fraud is a crucial step all gambling operators must take in a highly competitive industry; and in addition to bonus abuse, players as well as operators should be aware of how to identify several types of online casino scams. Casinos and sports betting sites can use the bonus abuse prevention methods recommended below to protect their platforms for genuine players who want to have fun and play with bonuses without using unfair methods.
- Monitor and Analyse User Behavior: Use real-time monitoring systems to track suspicious patterns, multiple accounts linked to the same device or IP address, location data, registration and deactivation speeds, and questionable early cashouts.
- Comply with AML and KYC Guidelines: Follow strict account creation measures, implement anti-money laundering (AML) policies and features, and use identity verification processes like KYC to ensure each player can only create and use one gambling account.
- Build Safe and Robust Platforms: Gaming operators should focus on developing secure and scalable online gambling platforms that can be adjusted to comply with the latest security regulations and meet the changing needs of the dynamic industry.
- Collaborate with Reputable Software Providers: Working with top-tier game developers allows casino operators to offer high-quality games tested by the leading testing agencies to ensure fairness.
- Use Technology to Identify Fraudulent Activities: Gambling platform operators can implement AI and machine learning tools to prevent bonus abuse by effortlessly identifying suspicious transactions and activities on their platforms.
How Do KYC and AML Compliance Deter Bonus Abuse Online?
Effective know-your-customer procedures can help online platforms prevent bonus abuse fraud by stopping multiple account creations. These processes involve identity verification through personal documents such as passports and driving licences, making it difficult for fraudsters to create fake accounts. On the other hand, AML compliance prevents fraudulent activities by detecting and preventing illegal gambling transactions on gambling sites and apps.
Understanding Bonus Terms & Conditions for Players
Almost every online gambling platform allows players to claim bonuses, and all promotions have terms and conditions (T&Cs) that gamblers must read, understand, and comply with to withdraw their bonus winnings. These terms include the minimum deposit, casino bonus wagering requirements, validity period, maximum cashout, maximum bet, wagering contributions, and eligible games. Gaming operators can reduce bonus abuse by offering promotions with complex bonus terms and conditions with no potential loopholes to exploit.
Conclusion
Promotion abuse is a significant concern for industry professionals and iGaming operators who seek to entice players with lucrative bonuses. The recommended gambling fraud prevention strategies can help casinos and sportsbooks combat bonus abuse and attract more players to their platforms.
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