Guide to Bonus Abuse in iGaming: How to Detect & Prevent

The iGaming industry is booming, with billions participating in online betting and projections estimating its value will soar to $370 billion by 2032. While this growth presents incredible opportunities, it also brings significant challenges, particularly the rise of bonus abuse.

What Is Bonus Abuse?

Bonus abuse, often referred to in the context of online gaming or gambling, is the practice in which individuals exploit promotional offers intended for new users and provided by platforms to gain unfair advantages or profits. It is a sophisticated form of fraud that leverages vulnerabilities in operators’ processes that enable the exploitation of promotional incentives designed for new players. This unethical behavior, also referred to promo abuse, multi-accounting or bonus hunting, targets various bonus offers, extra funds, sign-ups, free spins, no-deposit bonuses and other incentives designed to attract new users or reward loyal customers.

Bonus abusers manipulate these promotions through strategies like creating multiple accounts, collaborating with others or employing betting patterns that minimize risk while maximizing the benefit from these bonuses. Such activities violate the terms and conditions of the platforms and can lead to account suspension, forfeiture of winnings, and, in some cases, legal action. In essence, bonus abuse undermines the intended spirit of promotional offers, creating an uneven playing field and potentially causing financial and reputational damage to the service providers.

How Bonus Abuse Fraud Works in iGaming

Fraudsters often create multiple fake identities to repeatedly claim bonuses intended for first-time users or engage in practices such as multi-accounting and using advanced technologies like VPNs or Tor browsers to conceal their activities, making it challenging for operators to track and stop them.

While the methods of bonus abuse vary, including strategies like arbitrage betting, cross betting, bonus hunting and chip dumping, all of them threaten the financial stability of gaming platforms and the fairness of the industry. Central to the issue lies inadequate online identity verification processes that fail to detect signs of fraudulent activities, allowing abusers to exploit these systems repeatedly. 

Operators are countering this threat with stringent terms and conditions, keen surveillance of player activities and adherence to strict regulatory standards, as well as implementing complex bonus terms, conducting rigorous monitoring for unusual sign-up and cash-out patterns and performing thorough Know Your Customer (KYC) checks to prevent bonus abuse better but also to maintain the industry’s integrity and trust of genuine players.

Seven Types of Popular Bonus Offers

Bonus offerings are a standard strategy operators use to attract and retain players. Here are the top seven types of bonus offerings that are often targeted:

• Sign-Up Bonuses
• No-Deposit Bonuses
• Deposit Match Bonuses 
• Free Spin Bonuses
• Refer-a-Friend Bonuses
• Loyalty Bonuses
• High-Roller Bonuses

Strategies for Bonus Abuse Prevention and Detection

Operators must adopt cutting-edge strategies to counteract bonus abuse fraud, ensuring a secure and fair environment for players. Utilizing advanced analytics and machine learning, operators can detect and preempt fraudulent activities by identifying patterns indicative of abuse.

Industry collaboration can further enhance these efforts, creating a robust defense against fraud by sharing insights and best practices. Equally vital is educating players about the risks and signs of bonus abuse, turning them into informed participants who can aid in detecting suspicious activities. Operators can promote a healthy gaming ecosystem by integrating technological solutions, fostering industry cooperation and enhancing player awareness.