Learn about affiliate fraud in online gambling and how to successfully fight it.
The online gaming market is vast and continuously expanding. According to Statista, iGaming market revenue is projected to reach 87.91 billion USD in 2023, with an annual growth rate of 9.02%, leading to a forecasted market volume of 124.20 billion USD by 2027. According to data presented by CasinosEnLigne.com, “the online gambling industry has more than doubled in the past four years, reaching 176 million users and over $95bn in revenue in 2023”.
As money continues to circulate within the industry drawing in more players, fraudsters are also enticed by the earning opportunities presented in iGaming.
The decentralized structure of iGaming introduces distinctive fraud vectors absent in traditional casinos, one of which is affiliate fraud. However, these new challenges also pave the way for innovative solutions.
Let’s dive into what iGaming affiliate fraud is, why it’s extremely harmful for the whole industry, and how to fight it.
In iGaming, affiliate marketing is when third parties promote online games, like casinos, sportsbooks, poker rooms to earn a commission for each referred player. However, these affiliate marketing programs can often be misused, leading to affiliate fraud.
Affiliate fraud can be harmful to iGaming operators, resulting in increased operational costs, financial losses, damage to reputation, legal claims, and fines imposed by regulators or other government bodies. In severe cases, it may lead to a license suspension.
iGaming operators conduct strict due diligence on affiliates, implement stringent monitoring systems, conduct regular audits, and establish clear terms and conditions for their affiliate programs. Additionally, they may use fraud detection tools and collaborate with reputable affiliate networks to ensure the integrity of their marketing channels.
iGaming affiliate fraud can take on various forms, including:
Suggested read: Promo Abuse Fraud—How to Avoid It
Affiliate fraud poses risks to both operators and the integrity of the affiliate marketing ecosystem. Some of the key risks include:
To establish a more secure and trustworthy marketing environment, iGaming operators should:
The best solution for iGaming operators to mitigate gaming fraud risks, maintain profitability, ensure a flawless reputation, and stay AML compliant would be to use Sumsub’s iGaming full-cycle verification and fraud prevention solution.
Sumsub deters all gaming-specific fraud in real-time, including:
Sumsub’s full-cycle verification and fraud prevention solution also allows you to:
Fraud in iGaming refers to deceptive activities, such as identity theft, payment fraud, affiliate fraud, or manipulation of gaming outcomes, aimed at exploiting or compromising online gambling platforms for financial gain.
An example of affiliate fraud in iGaming is the creation of fake player accounts by affiliates to falsely inflate referral numbers and earn illegitimate commissions.
Sumsub’s full-cycle verification and fraud prevention solution can easily spot iGaming affiliate fraud. This involves monitoring for irregularities such as unusually high conversion rates, suspicious click patterns, or fraudulent player accounts.