Increasing Gaming Scams: What Fraudulent Practices Are Gaining Popularity Among Gamers?
In the rapidly evolving world of online gaming, operators find themselves in a constant arms race against professional fraudsters. The iGaming industry, with its aim to provide fun, exciting, and innovative games while adhering to strict licensing rules and ensuring genuine customer satisfaction, is faced with a significant challenge: the growing issue of fraudulent activities.
One of the most prevalent forms of fraud is bonus abuse, responsible for almost 70% of losses suffered by operators globally as of early 2025. Fraudsters create multiple fake accounts using burner emails, fake names, and spoofed IP addresses to claim welcome bonuses repeatedly. They then place low-risk bets to guarantee returns and withdraw winnings before detection, draining marketing budgets and undermining fraud detection systems.
Besides bonus abuse, other emerging fraudulent schemes include synthetic identities—fake personas that combine real and fabricated personal data to bypass age checks and bans—and illegal gambling operations that expose users to risks of financial loss and identity theft due to lack of regulation.
The industry impact is profound. Fraudulent activities inflate operational costs due to higher marketing expenses, increased fraud detection and compliance efforts, and potential regulatory scrutiny. They erode player trust, distort legitimate user metrics, and may cause tighter restrictions or reduced bonuses, ultimately harming both operators and genuine players.
Moreover, connected issues such as "friendly fraud" where customers dispute legitimate gambling charges are also on the rise, complicating financial transaction security for banks and gambling operators.
The rise of AI in the iGaming industry has further complicated matters. AI allows users to create more enhanced bots, build synthetic identities for multi-accounting, and hit more of the operator's bonuses. Next-generation games like Plinko and Dice pose exploits in the iGaming industry.
Affiliate fraud, credit card and chargeback fraud, account take-overs, betting systems, collusion, and bonus abuse are common fraud schemes in iGaming. Financial scams and money laundering dangers are associated with the rise of player versus player (PvP) games in iGaming.
The iGaming industry is also experiencing an increase in self-exclusion fraud due to regulation. This occurs when individuals attempt to circumvent self-exclusion measures to continue gambling.
Online gaming fraud nearly doubled from 2023 to 2024, costing operators around $6.8B. The industry, therefore, must continue to adapt and evolve to combat these threats and maintain the trust and safety of its players.
- The iGaming industry, in its pursuit of entertainment and innovation, encounters a challenging issue: the escalating problem of cybersecurity threats, particularly financial fraud.
- In the realm of online gaming, synthetic identities have emerged as a formidable challenge, bypassing age checks, bans, and potentially causing financial loss and identity theft.
- The rapid advancement of technology, such as AI, has introduced new complications, enabling users to create sophisticated bots and synthetic identities, thus intensifying the problem of fraud in the iGaming sector.
- Amidst concerns about fraud, the iGaming industry faces another threat: self-exclusion fraud, as individuals try to evade self-imposed restrictions in order to continue indulging in casino-games and gambling.
- Beyond the issue of fraud, financial institutions also grapple with the increasing prevalence of friendly fraud in online gambling transactions, adding another layer of complexity to security and transactional matters within the iGaming industry and the broader finance sector.
