Gambling has long been an enjoyable pastime for many and as long as gamblers are playing safely and with control, it remains a popular form of entertainment.
While casinos are popular in person, they’ve found an additional home online. Like much of the internet, technology has provided accessibility for those who don’t necessarily have a local casino or gambling venue on their doorstep.
However, some online casinos have had to put processes in place to prevent fraudsters and gamblers from taking advantage of online-only perks like promotional offers. These are typically for any new user coming to the site for the first time and its purpose is to incentivize them to spend money.
How are online casinos remaining profitable by countering activities like bonus abuse? What preventions are put in place to ensure this problem is dealt with? This guide will help you understand what bonus abuse is, how it’s used, and what ways online casinos are tackling it to avoid major losses in profit.
Table of contents
- What is bonus abuse?
- How does bonus abuse work?
- 5 ways online casinos counter bonus abuse
- 1. Monitor user behavior
- 2. Take advantage of digital footprinting
- 3. Implement strict identity verification software
- 4. Make use of device intelligence
- 5. Use data analytics and machine learning
What is bonus abuse?
Bonus abuse is the practice where individuals actively exploit promotional offers that are intended for new users to give them unfair advantages or profits.
It’s a form of fraud that leverages the vulnerabilities of operators or companies of online casinos who have provided such promotions with the intention of encouraging new customers to gamble. It’s a gesture of goodwill that has been twisted and taken advantage of.
In a study by GBG Trust, tests were carried out on 100,000 customer identity records from one iGaming business and found that 88% of low-scoring identities were committing bonus abuse or other fraud.
Typical promotional incentives that are being abused include bonus offers, sign-ups, free spins, and no-deposit bonuses. Bonus abusers will manipulate the various promotions on offer through strategies like setting up multiple accounts, employing betting patterns, or working with others in order to cheat the system.
Bonus abuse violates the terms and conditions laid out by these companies and therefore account suspension and even legal action can be taken. For any company that operates an online casino, it’s important to take this threat seriously, especially as it’s so rife across the industry right now.
It’s not only creating an uneven playing field between online casinos and players but also causing damage to the businesses financially and through reputational damage too.
How does bonus abuse work?
There are a number of ways in which bonus abuse works, as mentioned briefly above. Let’s take a closer look at how these methods play out when a user decides to use these promotional offers in a fraudulent manner.
Multi-accounting
One way in which bonuses are exploited is through the use of account creation. Anyone signing up for a casino website online should really use the one account. If they’re setting up multiple accounts, it’s an indication to the online casinos that this person might be looking to abuse the bonuses available.
By setting up multiple accounts, it can take advantage of the promotional offers again and again, in the hopes that they get lucky and have a significant win.
Collaboration with other users
Another method that bonus abusers use is through collaboration. By collaborating with other users, by working together, bonuses can be exploited.
Chip dumping is a term often used amongst players who intentionally lose to each other so that they can then transfer the winnings to one another. Most of the time, it’s used during poker games and is a method of money laundering to fulfill the wagering requirements.
Betting patterns
With betting patterns, players are able to minimize risks while maximizing their benefits. This strategy usually involves placing bets on all possible outcomes on various better operators. As a result, it provides a win regardless of the outcome.
This type of betting takes the fairness out of the activity while harming casino profits. Not only that but it’s no fun for those partaking in it.
5 ways online casinos counter bonus abuse
Bonus abuse has a real impact on those operators within the iGaming industry. In fact, it’s been reported that bonus abuse is costing businesses around 15% of their annual gross revenue.
In order to combat this successfully, operators should implement the right verification processes that vet the users playing, monitor player behaviors, and invest in anti-fraud technologies to detect the first signs of bonus abuse before they eat into the profits.
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Monitor user behavior for gambling fraud
User behavior is useful when it comes to suspicious activity like bonus fraud. From spotting what users make multiple accounts to unusual deposits and withdrawal activities. All of the above are indications of potential fraudulent activity and gambling fraud being committed.
Analyzing these patterns is extremely helpful and will allow your business to sift through the bad eggs. It helps to identify those who are deviating from being legitimate players and capture those committing bonus abuse before they’re able to cash out large sums of money.
While not all user behavior will result in fraudulent behavior, it’s good to be mindful of what is deemed as usual with online gamblers and what might not look right at first glance. Being attentive to the unusual will help you spot problem users before they become more than just a nuisance.
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Take advantage of digital footprinting
Analyzing users’ digital footprints is a good way of helping to detect the shift in patterns that are consistent with bonus abuse. This could be Tor networks or VPNs that indicate an evasion attempt by the user or users in question.
Having an awareness of your users’ digital footprints is always good practice to monitor what users are up to when they’re navigating your site, beyond simply playing the games and gambling their money.
This awareness will help you make quicker decisions when necessary so that you eject the bad apples off your site before they cause any financial stress on the business.
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Implement strict identity verification software
The ability to verify your users and to confirm that they are who they say they are is highly important. This is done with robust identity verification processes in place. This could be specific documents such as passports or driving licenses, biometrics, etc.
Having such strict identity verification software helps to deter fraudsters from even bothering to sign up their details on your website. You’ll find that there are fewer frequencies in regard to creating multiple accounts by having such processes in place. Each user will need to be unique and legitimate before they’re able to sign up or cash out any of their winnings.
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Make use of device intelligence
Multiple accounts are the tell-tale sign that a user might be planning to take advantage of the free offers and promotions. A good way of ensuring this doesn’t happen is by applying device intelligence to your platform.
Having such software in place can be helpful in identifying and blocking users from creating multiple accounts from the same devices.
Device intelligence uses a variety of techniques and technologies whether that’s artificial intelligence, device fingerprinting, or machine learning algorithms.
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Use data analytics and machine learning
Data analytics and machine learning have become popular technologies within the world of business in general. Utilizing data analytics in regard to countering bonus abuse is useful for identifying the patterns associated with bonus abuse and thus helps to improve detection over time.
With machine learning technology, the technology learns from new data which ultimately improves the frequency and speed in which bonus abusers are caught online through the site.
Other threats to iGaming businesses to be aware of
There are a few other threats that iGaming businesses face and should be aware of in order to mitigate the risks they pose.
Cyber attacks
One of the biggest threats to businesses in general is a cyber attack. It’s important to be aware of what cyber attack methods are being used. Within the industry of iGaming, you should be cautious of email phishing being used to trick users into giving over their confidential information.
Malware is often used to try and gain access to users’ devices, so education is worth providing to your customers where possible to highlight the dangers out there.
Ignoring data regulations
The way we use data for business purposes has changed and as such, there are a lot more regulations and policies in place to protect users and their data. If you’re ignoring data regulations purposefully or simply because you don’t have the resources available, then this could get you into some hot water fairly quickly.
Counter bonus abuse and keep your online casino profitable in 2025
With more availability of online casinos within the iGaming industry, it’s important you’re protecting the company and your profits. Bonus abuse contributes to a loss in profit and revenue, so use the tips above to help counter abuse and ensure your online casino thrives in 2025.
Author Bio: Natalie Griffiths (LinkedIn)
Natalie is a freelance writer with five years of experience in copywriting for businesses, spanning many industries.
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