Article

Transaction Monitoring in iGaming: How It’s Used to Fight Fraud

The iGaming industry, with its vast financial transactions, is highly susceptible to fraud. With billions at stake, the sector attracts fraudsters using sophisticated techniques. A recent forecast indicates that the global online gambling market is expected to exceed $154 billion by 2030. With 5% of global digital transactions suspected to be fraudulent and a 14% annual increase in risky transactions, these trends threaten the profitability, integrity, and reputation of iGaming platforms.

In this context, transaction monitoring is a critical defense. It helps operators detect and prevent fraud in real time by monitoring activities, events, and financial transactions. This includes non-monetary actions like logins and account changes, financial exchanges such as payments and transfers, and additionally, AML monitoring focused on detecting money laundering.

By implementing comprehensive transaction monitoring, iGaming operators can ensure AML compliance, promote responsible gaming, and protect their bottom lines.

Why Is Transaction Monitoring Important in iGaming?

Transaction monitoring helps uphold the integrity of their platforms, serving not only as a compliance mechanism but also as a strategic asset for managing the complex risks associated with digital gaming environments:

Preventing Money Laundering: Transaction monitoring helps detect suspicious patterns, such as unusual deposit and withdrawal behaviors, that may indicate money laundering attempts. This is essential for complying with AML regulations.
Regulatory Compliance: iGaming companies are legally required to implement transaction monitoring as part of their AML and Know-Your-Customer (KYC) obligations. Failure to do so can result in severe penalties and loss of operating licenses.
Fraud Detection: By analyzing transactional and behavioral patterns, operators can identify potential fraudulent activities like bonus abuse, multi-accounting or collusion between players.
Responsible Gambling: Transaction monitoring can help detect problem gambling by identifying unusual betting patterns or excessive spending, allowing operators to intervene and promote responsible gaming practices.
Sanctions Compliance: Transaction monitoring ensures that funds are not transferred to or from sanctioned entities or regions, helping iGaming companies comply with various sanction regimes.
Cybersecurity: Monitoring transactions can help detect cyber threats and protect against unauthorized access to player accounts.
Building Customer Trust: Robust transaction monitoring demonstrates to customers that the platform is secure and committed to preventing financial crimes, which can build trust and platform reputation.
Operational Efficiency: Automated transaction monitoring solutions can improve operational efficiency by quickly flagging suspicious activities for review, saving time and resources.
Risk Management: By continuously monitoring transactions, iGaming companies can better assess and manage their overall risk exposure.
Identifying Linked Accounts: Transaction monitoring can help uncover hidden connections between accounts, potentially exposing fraud rings or collusive players.

Eliminate iGaming Threats

Keep bad players out of your ecosystem by preventing fraud and stopping bonus abuse.

See Solution

Looking Closer at Transaction Monitoring in iGaming

Modern iGaming requires transaction monitoring across various platforms, including mobile apps, desktop applications, and web interfaces. Operators need customizable and adaptive anti-fraud solutions to keep up with this dynamic environment. By deploying AI-driven algorithms, operators can enhance security by analyzing transaction patterns and player behaviors in real-time. Transactions that exceed preset limits or deviate from usual behavior are automatically flagged for immediate action, with tailored algorithms applying customized rules to identify activities needing further investigation.

Understanding player behavior is crucial for an effective fraud detection system. Transaction monitoring systems use behavioral analytics to detect unusual patterns that may indicate fraud or problem gambling. This includes analyzing betting patterns, deposit frequencies, and withdrawal behaviors. For example, sudden increases in bet sizes or frequent withdrawals can trigger alerts for closer scrutiny.

An effective transaction monitoring system in iGaming is not standalone but integrated with compliance and security tools, including linking transaction monitoring with AML screening, know-your-customer (KYC) protocols and responsible gambling databases. Such interconnected systems ensure a holistic approach to security and compliance, making it easier for operators to maintain secure and compliant platforms.

As technology evolves, operators must adapt monitoring settings and rules to stay ahead of fraudsters. This flexibility ensures gaming platforms remain secure and trustworthy despite changing fraud strategies.

Balancing Customer Experience and Transaction Monitoring in iGaming

Online casinos and gaming platforms prioritize seamless customer experiences but must also maintain strict AML compliance. This includes verifying new customers’ identity, legal age, and sanction status, as well as monitoring ongoing transactions and behaviors.

While maintaining AML compliance is a legal necessity, transaction monitoring is broadly a prudent measure for any online business. Proactive transaction monitoring software is vital to mitigate common types of fraud, like account takeovers and bonus abuse. However, this monitoring can sometimes disrupt the customer journey with excessive friction, which all operators strive to minimize.

By leveraging pre-KYC checks, device fingerprinting and other methods for frictionless authentication, good customers can experience relatively seamless journeys while having their behavior monitored for money laundering to an extent that satisfies legal requirements and provides safety.

Depending on the risk appetite, customers flagged for high risk can be paused for manual review or blocked. Automation minimizes customer friction during identity verification and deposits, balancing a high-quality experience with AML compliance.

As threats grow more complex, leveraging advanced technologies like device intelligence and digital footprint analysis is crucial. Integrating these with monitoring systems helps protect platforms and players, ensuring sustainable and profitable operations. This proactive approach deters fraudsters and reinforces trust and safety, which are essential for online enterprise success.

Need Help Managing Fraud?

Connect with sector-driven anti-fraud expertise.

Ask an Expert

How SEON Helps iGaming Operators with Transaction Monitoring

SEON performs transaction monitoring for iGaming through a sophisticated approach that integrates advanced technology with customizable rules and real-time analytics. The platform leverages machine learning to enhance fraud detection capabilities, recommending and refining risk rules based on data patterns and improving the identification of anomalies in real time.

Overall, SEON’s transaction monitoring enhances fraud detection, ensures regulatory compliance for AML and improves operational efficiency while prioritizing a high-quality user experience for iGaming operators.