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A Guide to Preventing Online Gambling Fraud 

Everyone who gambles online is probably aware that there’s some risk involved. Not just in the games, but also in gambling fraud. Especially when it comes to moving your funds with a credit card. Of course, when playing jackpot games of chance, you inherently understand that there are odds involved. You also are probably going to lose as the odds are always going to be against you. But one of the reasons you continue to play is because you assume that the rules you’re playing by are going to be fair. After all, isn’t that why online casinos have gambling licences from reputable licensing authorities such as the UK Gambling Commission or the Malta Gaming Authority?

It’s an unfortunate fact of life that fraudsters are always going to be targeting online casinos. And also the players who enjoy playing there. Their only purpose is to steal, hack and cheat. In order to gain as much elicit cash as they can. After all, it’s probably the fastest way to build your bankroll and win the jackpot online without doing any gambling. As we’ll see later in this article, they have a huge negative impact on the world of online gambling. On a more positive note, we’ll take a look at what online gamblers and casinos like King Billy Casino can do in order to keep this problem under control.

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Credit Card Fraud Affects Everyone

Probably the biggest fraud that takes place, not just in online casinos, but also online in general, is that of credit card fraud. This is a huge problem for every merchant operating on the internet. It affects huge corporations like Amazon, right down to tiny ma and pop businesses. It’s been calculated that the total cost of cyber-crime in just the United States alone, amounts to several billion dollars every year. Unfortunately, a significant portion of the financial burden caused by fraud is carried on the shoulders of the merchants themselves. There are also other ways in which the cost of online fraud hurts online merchants.

The most obvious of these is going to be the amount of revenue that’s lost online to fraud. But probably as big a disaster is going to be the loss of reputation in the eyes of the customer. It goes without saying that many of those scammed must wonder whether the establishment they trusted with their credit card couldn’t have done more to protect their money. Another bad result from a fraudulent transaction that goes through their platform is that the merchants themselves have to pay higher processing rates, as well as other additional fees. And then they have those awful and ugly chargebacks to deal with.

How Does Fraud Affect Online Gambling?

gambling fraud

As we previously mentioned, the damage to an online casino’s reputation can be deadly to its profit line and therefore it’s business. It’s a frustrating fact that online fraud is going to skim off any gambling profits. In truth, if a credit card company detects a high percentage of fraud, then there’s a good chance the merchant will have their accounts terminated. One of the factors that attract criminals to the online gambling marketplace is that it’s one of the fastest-growing e-commerce platforms. In many countries, online gambling is an activity that walks in the shadow of respectability. Which makes it even more appealing to fraudsters

The most common type of online gambling fraud is the use of compromised credit cards. This will be a card that belongs to an innocent third party. They will have no idea that they’re a victim of fraud. As you’d expect, when they discover money missing from their account, they’re able to instigate a chargeback. And get a reversal on the unauthorised transaction. For the online casino in question, this means not just having to pay back the transaction amount. But also there will be a hefty chargeback fee which, in a sense, is a kind of penalty.

All credit card companies will closely monitor chargeback activity. As we previously mentioned, any online casino showing excessive fraud or chargebacks will need to take drastic action to bring those rates down. A failure to do so means the loss of the facility to process using credit cards altogether. As you can imagine, this would make doing business online incredibly difficult.

Online Casino High Risk Ratings

What’s interesting here is that all online casinos are already designated as high-risk payment processors by default. So a chargeback problem will escalate much faster with an online casino than it would with, for example, an online clothes shop. You’ll find that online casinos have to walk a much narrower path and are given much less leeway when it comes to fraud rates and chargebacks. For example, Visa would impose additional fines if the chargebacks reached beyond the level of “standard” and moved up into the “excessive” level. As a matter of fact, many online casinos don’t even get to stay at the standard level. When they open for business with Visa or MasterCard, they are immediately put at an excessive level. So this straight away results in much higher fees and a greater possibility of fines. 

What Are the Most Common Types of Online Gambling Fraud?


Multiple Account Gambling Fraud

With this, online fraudsters take advantage by controlling multiple user accounts. By using different devices, along with different IP addresses, they can avoid detection. Once they’ve set up these multiple accounts, then it’s possible they can use any of the following methods to skim from both players and online casinos themselves:


This refers to setting up multiple accounts with the same sports bookmaker. The idea here is to circumnavigate maximum betting limitations. On another level, having many multiple accounts can also directly influence the odds, and therefore the sporting outcomes.

Bonus Abuse

The idea here is to create many fake accounts. This is in order to take advantage of special offers which are normally a gift for new customers. As soon as the bonus conditions are met, then the player will quickly withdraw their funds and close their casino accounts. To be truthful, we don’t really see this as a huge problem. And it’s not technically gambling fraud. After all, it’s just taking advantage of what’s on offer. When it comes to seeing how to win the jackpot, this is nothing more than being sneaky.

Credit Card Gambling Fraud

Using credit cards at online gaming casinos is commonplace. Providing the card works, then it’s a great place to go in order to cash out. In fact, both online and land-based casinos are excellent places to launder large batches of cash. Go in, buy some chips, play a hand and then go and cash out those chips to cash at the cage. Easy!

Chargeback Fraud

This happens when a legitimate customer files a chargeback, but it’s under false pretences. Most commonly this can be seen when a gambler has lost significantly. He simply calls up his bank and claims that the card was in use fraudulently. The bank will then immediately reimburse his gambling losses. And the casino has to pay a fine. It’s certainly one of the most novel jackpot winning strategies

How Can Merchants Prevent Online Gambling Fraud?

online security

For online casinos like King Billy Casino, probably the best way to protect themselves against online gambling fraud is the stringent use of KYC or “know your customer” conditions. Having said that, scammers always appear to be one step ahead. They are always working hard to circumnavigate the casino’s defences. Today you’ll find that many of the top reputable online casinos will make use of all sorts of identity verification services. They will all run software that looks at your IP address to your location. They’ll also check your email address and even your device fingerprints. In fact, any identifying data. Along with a strong password and two-factor authentication requirements. By seeing who you really are, they hope to be able to dissuade fraudsters and scammers. If it only was so easy! 

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