The post-COVID-19 period has tremendously surged in the e-sports and gaming industry. This booming industry has not only fascinated players but has caught the attention of scammers. Globally, gambling regulators had a dynamic year in 2022, issuing a fine of around $270,000,000 to various offline and online gambling operators. This is where Know Your Player (KYP) services come to the rescue.
A report demonstrated that the online gaming industry will capture 1% of GDP globally in 2023. Now gamers invest their time and money in online games as a profession. The endless effort of gamers and online gaming platforms has made it a standalone industry from other sports.
The security of online gamers’ data, gaming platforms, and speculators is achievable with the help of online gaming checks. Thus, it includes rules and regulations.
- Acknowledging wagers before holding a license to do so
- Breaking advertising rules
- Social accountability failings
- Acquiring and boosting services to self-excluding gamblers
- Marketing to youth
- Violating local gaming regulations by offering bonuses
- Failure to prevent overspending and placing limitations on accounts
- Failing to specify clients at risk of gambling-related hazard
- AML failings
- Tolerating prohibited wagers
- Inadequate anti-money laundering standards
Scammers are getting adept at getting past security measures and committing online gaming fraud due to technical improvement. Since the COVID-19 breakout, the gaming industry has emerged as the newest hotspot for criminals to carry out their unlawful purposes.
Here is how fraudsters commit online gaming fraud.
Scammers and organized gangs prey on gaming operators’ referral programs and sign-up bonuses. Online gaming companies may lose more than 15% of their total revenue due to bonus abuse.
Scammers employ strategies to take advantage of many accounts, including smurfing, matched betting, and affiliate fraud.
Using multi-accounting techniques, criminals alter PPL (Pay-Per-Lead) and CPA (Cost-Per-Action) models. As a result, your gaming website may receive incentives from inactive players or low-quality traffic from visitors who do not intend to make purchases there.
Scammers utilize lists of login information obtained from data breaches or phishing attempts to access user accounts without authorization and siphon off their money.
There are two basic causes behind this scam. First, to carry out fraudulent purchases, scammers use credit card information that has been obtained. Second, friendly fraud is when a player deliberately tampers with the chargeback procedure to have their unfavorable bets voided by requesting a chargeback.
The gaming industry experiences an increase in fraudulent operations with each passing year, which has a variety of negative effects, including:
Chargebacks have effects that go beyond just the bottom line. Analysis and contesting chargebacks need a significant amount of time and work. This could put an undue operational burden on the risk team and have a high request volume. Additionally, increased chargebacks might harm your company’s reputation with card issuers and your relationship with them. Additionally, the excessive chargebacks cost your business a lot of money.
The primary offenders here are bonus abuse and affiliate fraud, both of which have the potential to significantly lower your Return on Investment (ROI). When targeted traffic doesn’t result in the intended actions or worthwhile engagements, the tremendous time and effort invested in developing an enticing strategy for drawing new players become meaningless.
Although esports gaming is less closely regulated than traditional internet gambling, regulators are anticipated to tighten their control over the industry. To safeguard gamblers, several nations, including Sweden, have started enforcing stricter laws and levying significant fines.
Every business engaged in the gaming industry must first establish safety and trust. Account takeovers not only result in cash losses for the users but also expose a weakness in the firm’s security protocols. Players subsequently share their dissatisfaction on online forums, harming the reputation of your business.
By gathering precise personal data and verifying a player’s identification using official documents, identity verification for online games helps the gaming industry confirm that players are who they say they are. The use of gaming firms for illegal purposes or the creation of fictitious accounts are both prevented by this. Online gaming fraud detection shields the industry from costly non-compliance fines in addition to aiding in the prevention of scammers.
There is no excuse for not having online gaming safety. Every online gaming company should adopt know your player verification before onboarding any player on the website. This will boost the number of legitimate players in the industry, also gamers who are taking it as a profession will get another reason to secure confidential information. Thus, online gaming safety ensures security and comfort for players and host websites.