Australia’s Early Warning Signs to Global Online Gambling
Posted December 28, 2017
If you’re looking for a microcosm of the rapidly evolving threats facing online gambling captured in a new cybercrime report from ThreatMetrix, look no further than my native Australia.
With apologies to Vegas, what happens Down Under doesn’t usually stay there. And that doesn’t bode well for a $550 billion global industry that’s been called “the next big thing in cybercrime.”
Win, Lose or Draw?
Worldwide, the digital revolution is reshaping an industry known for “punters” (gamblers) and “bowlers” (identity-shielding proxies) shouting into telephones to time and place their bets.
In its place: A global phenomenon driven by transactions conducted at the blink of an eye — anywhere, anytime — using whatever device is at hand.
According to our 2017 Gaming and Gambling Cybercrime Report, 50 percent of all transactions in the industry now come through mobile — an increase of 20 percent year-on-year. And live, in-play betting and virtual casinos optimized for the mobile channel are rapidly extending gaming’s reach and popularity around the globe.
For its part, Australia is all in. Last year, Aussies spent more than $24 billion on gambling. That’s $1,300 per capita — or nearly double the average for other Western countries. While digital makes up just 11 percent of that total, it’s also the industry’s fastest-growing segment both here and abroad.
Indeed, despite being illegal in many countries, including most of the U.S., Juniper Research projects online gambling revenue could top $1 trillion worldwide by 2021.
In other words, business is booming — heightening three key challenges for operators.
- Full House: New Rivals Change the Odds
Everybody loves a winner. Which means operators are under more pressure to deliver ever-increasing levels of speed, ease and convenience — or risk losing market share to competitors. To that end, many now enable customers to store payment and identity information to their digital accounts. Unfortunately, that also creates an irresistible target for fraudsters.
2. Dirty Money: Fraudsters Threaten Net Winnings
Using bots, cyberthieves and organized crime rings hijack existing accounts, or create fraudulent new ones, by accessing more than 9 billion personal identity credentials stolen through data breaches and available on the dark web. In 2017, bot attacks made up 50 percent of all gambling site traffic during peak attack periods.
According to ThreatMetrix data, 5.6 percent of the industry’s new account creations are now fraudulent. So are 4.3 percent of all payment transactions — a higher percentage than any other industry.
And it’s no wonder. A successful attack enables cyberthieves to misuse or sell new player bonuses, resulting in as much as $82.5 billion in losses for operators each year. They can also launder money, monetize stolen credit card numbers or access card-on-file payment information, so they can place fraudulent bets or make illegal purchases elsewhere.
3. Wild Cards: Cross-Border Bandits and New House Rules
Nearly half of all transactions in this industry are cross-border, compared to an average of 29 percent across industries. As a result, operators face two-times the fraud rate on an increasing portion of their transaction volume, making fraud prevention a top priority.
Operators must also navigate an uneven regulatory environment in which a growing number of countries are putting the onus on them to ensure responsible gaming, identify problem gamers and prevent self-excluders from returning to bad habits using stolen or borrowed credentials.
As it happens, famously gambling-friendly Australia may soon join their ranks, thanks to pervasive gambling options that many say pack the addictive “force of cocaine.” Gambling addiction is so prevalent here that the BBC reports one working class Sydney suburb gambled away more than $6 billion (U.S.) — just under $30,000 per resident — in just 12 months.
Fraud Prevention: Extending the Streak
In the face of these and other complex challenges, a growing number of operators are turning to advanced, digital identity-based smart authentication to thwart fraudsters while meeting asymmetrical regulatory requirements.
Instead of relying on static identity credentials that can be stolen or faked, these solutions instantly recognize legitimate users and block out threats using shared global intelligence that connects the dots on the continuously changing associations between people, their devices, locations, credentials and online behaviors in real time.
Operators that have deployed such solutions report they’re able to instantly detect and neutralize players registering for multiple accounts, using stolen credit cards, or taking part in collusive play or bonus abuse — saving hundreds of thousands of dollars.
What’s more, thanks to behavioral analytics and advanced machine learning, they can sideline problem gamblers and self-excluders, while providing conclusive evidence of compliance in up to 100 percent of regulatory disputes.
Still, with Juniper projecting online gambling revenue will soon exceed the total amount consumers spend on all digital goods and services combined, some operators will be content just playing the odds in Australia and around the world.
Others, of course, will prefer to run the table instead.
To learn more about navigating the evolving threat landscape for operators worldwide, download the 2017 Gaming and Gambling Cybercrime Report.
Originally published at www.threatmetrix.com on December 28, 2017.