Bonus Abuse In iGaming

How to stop multi-accounting and keep your bottom line intact
June 16, 2020 | Expertise

Bonus abuse is a prevalent problem within the iGaming industry – a term used to describe operators of online casinos, sports betting, lottery providers, bingo sites and more. It is not as clear cut as payment fraud or chargebacks, making it harder for fraud analysts to detect. It is essentially people taking advantage of marketing offers for new users by signing up for them multiple times. Often referred to as multi-accounting or gnoming it encourages fraudsters to create as many new accounts as possible, in extreme cases relying on stolen IDs, synthetic identity, and prepaid credit cards in order to bypass the know your customer (KYC) checks. The iovation’s 2020 iGaming Report revealed that, for the third year in a row, bonus abuse was the number one reported fraud by its iGaming customers, rising 72% from 2018 to 2019.

Why is bonus abuse an issue?

Many see it as a harmless crime, that they are just taking advantage of a system, and their behavior is not fraudulent or criminal. This isn’t true, it causes a great deal of harm to the operator's profit margin and creates a wave of repercussions. In the extremely competitive market, iGaming companies rely on bonuses to entice and lock-in new players. When people begin to take advantage of these offers, operators and players get stuck at an impasse. Operators no longer want to offer bonuses as it is not financially viable and players lose interest and move on to another site.

Abusers are more likely to get away with it, as it is a bit of a grey area and proof of abuse is not easy. Pursuing legal action is expensive and complicated – especially if you operate on a global scale. Some sites rely on fraud technology to identify bonus abuse, using algorithms to spot unusual behavior. However, there is an undeniable risk of false positives or false declines, meaning genuine players are flagged as abusers. When this happens, and players who are not manipulating the system are reprimanded – by having their transactions rejected or declined – it can have a negative impact on an operator's reputation. Reputation is incredibly important in iGaming which is another reason why it is so difficult to measure the true cost of bonus abuse. 

Online gambling sites often find themselves juggling between optimizing the customer journey, maintaining regulatory compliance and ensuring maximum protection against bonus abuse and other fraud. If one ball is dropped then the bottom line takes a hit.

How can payment providers help combat bonus abuse?

One solution is to increase the number of customer authentication steps (KYC) during onboarding. However, too much friction and customers can be put off and cancel the onboarding process altogether, meaning operators lose out on potential revenue. 

Bonus abuse requires scale to be profitable and in order to achieve that scale, fraudsters use payment methods that are easier to manipulate, such as prepaid cards.  Interestingly Germany and the UK have banned the use of credit cards for online gambling. In using a payment management platform, operators are able to switch to payment methods that are more suitable for their needs and can connect to new ones quickly and efficiently, without costly and time consuming integrations. Open banking is a good example of a payment method, which, due to its symbiotic nature, makes it difficult for potential abusers to use in a fraudulent way. 

A payment platform with a risk management engine can also help detect potential fraud at an early stage. Being able to run risk checks on a variety of things such as: how many accounts are having activity from the same device, device fingerprinting, how many accounts are registered with the same IBAN, how many accounts are using the same IP address...there are multiple combinations that users can put in place in order to flag up suspicious transaction for manual checks. This can greatly increase an operator's chance of detecting and stopping fraud at an early stage. 

Of course, it is not a sure-fire way to stop all bonus fraud but it can certainly help reduce it, and with revenue and processes protected from fraud, iGaming sites can have the stability they need to grow and thrive in this increasingly competitive market. For more information on how a payment orchestration platform could help you reduce fraud get in touch with our sales team who would be happy to answer any of your questions.


IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a highly scalable and PCI-DSS certified “fintech enabler”, IXOPAY fulfills the needs of large merchants as well as those of “white label” clients: payment service providers (PSPs), acquirers and independent sales organizations (ISOs). The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, payment service providers and alternative payment methods (APMs).

IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The owner-led and -financed company has grown from 2 to more than 65 employees and is focused on building innovative solutions for eCommerce.

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