Opinion: Combating the growth of casino bonus abuse
For many years now, online gaming companies have had an issue with bonus abuse. This issue rarely hits the headlines or even the senior executive radar but it should. It’s seen as a fraud and compliance issue in the same way that KYC and chargebacks are.
There will occasionally be a signi?¬?cant upsurge showing on the monthly net gaming revenue reports, but it’s explained away by a poorly thought out bonus by marketing, a poor source of tra?¬?c or a less than scrupulous a?¬?liate.
Bonus abuse comes from the fact that in a competitive environment, when in essence most operators have very similar o?¬?erings, something has to di?¬?erentiate one from the other. Sure, brand helps but there is a need for more and that’s when the casino, and later the sportsbook bonus, was invented.
Originally, it was a small one-o?¬? o?¬?er just to entice the player to come play with you rather than someone else, or a small o?¬?er once a month to play. But then, the bonus wars started and everyone tried to outdo each other to try and attract customers.
A growing concern
The tough thing for a bonus abuser is that to make money, they must have multiple accounts. They are using the probability against the operator but probability only works over time – if they could only open up one account, the numbers would not work and the abuser would lose money.
With the enhanced KYC and AV associated with UK and other regulated markets, and with systems like Jumio, Iovation, 3D Secure and others, surely abuse is now under control? I am afraid the answer is no.
It will be tougher for an amateur but for the professional abuser it’s just as easy and in some cases getting easier and these are the guys that really hurt an operator. They are often called rings or syndicates but in reality it’s one person controlling many legitimate accounts.
Recently, I was introduced to someone very few operators would ever get to meet. He is a newly retired professional bonus abuser – a good one at that – and he tells me he has made ?5m pro?¬?t in ?¬?ve years. I have no reason to disbelieve him.
What’s scary is that this pro?¬?t continued to rise despite emergence of KYC, AV, new bonus rules, wagering requirements, ID checks and new detection systems. What’s more, he was extremely careful never to veer into fraud or deception, so he kept on the right side of the law at all times and never sent fraudulent documents or stolen IDs.
The biggest shock to me was how much he knew about how the industry’s abuse procedures, bonus systems, fraud checks and each piece of software works. He knows where to play, with which bonus, on which game, for how much, what the maximum he can win before raising fraud suspicion is and which T&Cs are enforced and which are not.
We all imagine a bonus abuser being a student working from home but he had an o?¬?ce with a number of sta?¬? working full time and even had an R&D team to test sites out to see how far he could go before getting caught.
A numbers game
But let’s put some more numbers on this. He has over 3,000 genuine accounts (with ID), he made ?35k a month pro?¬?t on many of the largest sportsbooks – that’s per sportsbook and is a pure loss o?¬? the bottom line. Apart from his R&D work, he was never caught and even with the R&D they never caught him, just one sole abusing account.
He tells me that he knows of at least eight to 10 similar size abusers in the UK hitting companies every day and probably more that he does not know. That’s hundreds of thousands of pounds a month lost.
So is bonus abuse still a significant problem for our industry? Undoubtedly yes. What’s more, most operators are not seeing it given the mass of customers and bonuses, and it’s very hard for your fraud teams to detect, certainly via player validation.
But there are solutions, via subtle changes to T&Cs which will not impact the regular customer but will deter the abuser by understanding that every bonus tool is di?¬?erent. So copying your competitor’s bonuses, T&Cs and rules will not work.
It has to be bespoke. For example, look for speci?¬?c patterns in game play pertinent to your individual bonuses – keeping in mind that when one way is caught they will ?¬?nd another, and by realising that there are smart people out there who know how you work.
I have worked with this ex-abuser a few times to assist with companies who have identi?¬?ed an abuse issue and it’s made a signi?¬?cant di?¬?erence to the bottom line.