Fraud in the casino and sportsbook sector is reaching alarming levels, writes Lauren Harrison.
In 2024 alone, it rose by an alarming 64 percent, representing a significant drain on operator resources and revenue.
Globally, the financial toll runs into the billions each year. In the U.S., for example, losses are estimated to exceed US$2.8 billion (£2.08bn) annually – a figure that continues to grow and is also thought to be under-reported.
As technology evolves to combat the growing illicit industry, so do the tactics of fraudsters; making it a fast-moving and increasingly complex battle for operators to fight.
In this iGF exclusive, our Head of Content, Curtis Roach sits down with Volodymyr Todurov, CEO of AI-driven anti-fraud platform Frogo, to explore the state of iGaming fraud today and ask how technology is helping operators regain ground and stop fraud in its tracks.
Welcome Volodymyr!
Real-time has become an industry buzzword, but what does it mean in the context of risk management currently, and why should operators prioritise it?
“Real-time isn’t just a buzzword.
“Payment and game providers already process huge volumes of bets at very high speeds. Processing bets in a casino happens in real-time. It is all nothing new.
“What’s changing is that processes are accelerating and becoming automated, both for fraudsters and for operators.
“If you attempt to counter automated attacks in today’s market with manual processes, you will either miss 99 percent of all fraudulent cases and accounts, or be forced to maintain an unreasonably large team dedicated to manual checks.”
How does Frogo’s smart alert system and real-time automation help businesses identify fraud and act before damage occurs?
“The alerting system is an additional tool that we have because when your risk scoring is all automated–back-end to back-end–it’s great. But anomalies can still occur. And if they do, you need to act fast.
“Our alerting system notifies managers directly when the scoring engine detects anomalies; for example, an abnormal spike in transaction conversions on the website, which means they can take immediate action.”
Delayed fraud detection typically impacts revenue, player trust and compliance. How can operators close the critical response gap?
“When this happens, we recommend that operators use our real-time scoring to rebuild their operations. The scoring system works by helping differentiate between genuine clients and fraudulent accounts.
“For example, if there is a high-risk customer, their activity should be limited. But the problem is that patterns of activity and play for fraudsters and VIPs can often be similar.
“To help operators detect which is which, our scoring engine with a reputational model can detect the subtle differences, approving the real VIP customers and blocking fraudulent accounts.”
Real-time systems require fast data and smart decisions. How is Frogo using AI and dynamic scoring to ensure operators get accuracy and speed?
“AI is an excellent assistant when a fresh perspective and the search for insights are needed.
“We use AI models as an additional tool to enhance the effectiveness of scoring policies.
“With well-labelled data on fraud incidents from the operator, we can adjust rules more effectively, improving the accuracy of fraud detection.
“Dynamic triggers, in particular, perform exceptionally well in situations where it is necessary to track changes in traffic behaviour patterns.
“This is almost always tied either to early response, for instance: When the share of a specific internet service provider suddenly spikes relative to all traffic, or to reducing false positives, like avoiding repeated checks on the same group of legitimate multiple-accounters until a new participant appears within it.”
As risk becomes more complex across regions and verticals, what can operators do to remain flexible enough to adapt in real-time but without breaking their existing workflows?
“Flexibility was a key design principle behind Frogo.
“We don’t use hard-coded fields or fixed patterns. Instead, our logic can adapt based on the attributes and behaviours we receive.
“This means the same pattern can carry different weights in different regions or contexts.
“We can create complex layers of aggregation and tailor responses across thousands of scenarios.”
Editor’s Note:
Fraud in the iGaming industry is a major drain on resources.
“It is an organised, criminal and increasingly sophisticated sector that costs the industry billions every year. Beyond the balance sheet, missteps in tackling it can also erode trust with players and regulators, landing operators in strategic trouble.
But in today’s tech-driven industry, a smart, offensive rather than defensive approach is possible. Detection has moved beyond merely meeting compliance protocols to become a real-time core business area that operators cannot afford to ignore.
Volodymyr highlights how real-time monitoring, dynamic scoring and flexible infrastructure are now critical in staying ahead of fraudsters and ensuring seamless, uninterrupted experiences for real players.
And as risk becomes more complex, a dynamic, flexible solution based on real-time patterns that can detect subtle differences between accounts and behaviours–like the one Frogo supplies–is what’s required to clamp down on risks before damage occurs.
