INSIGHT
OPERATORS VS FRAUDSTERS :
WHOSE SIDE ARE E-WALLETS
AND AFFILIATES ON ?
While undoubtedly beneficial to igaming operators , at times wallet providers and affiliates are facilitating dubious behaviour , says Jens Bader
E-WALLETS SERVE AN INVALUABLE PURPOSE in igaming , acting as a conduit for operators to receive funds and for players to withdraw their winnings . However , in recent years they have also become a principle enabler of fraud and a key weapon in the arsenal of every fraudster .
While no one disputes their continued importance , operators are starting to question whether wallets have swung too far in favour of users and whether wallet providers and affiliates are doing enough to prevent activity such as bonus abuse .
“ Other than avoiding relatively small fines , there really is no motivation for wallets to properly clamp down on activity like bonus abuse ”
A more extreme question might be to ask whose side these industries are really on , since e-wallets and affiliates appear to be benefiting as much as anyone from the current status quo .
WHAT IS THE E-WALLET PROBLEM ? Historically , e-wallets were designed to put their users ’ needs first , not the needs of operators . Their main features are customer-centred benefits , such as funding the wallet in real-time , moving money easily into and out of gaming accounts and using an associated prepaid card to operate the account anywhere .
While it could be argued that a rising tide lifts all boats , and that happier players make for more loyal and valuable customers , this is only true up to a point . Indeed , the use of e-wallets has created massive issues for operators including money laundering , collusion and bonus abuse .
Of all fraudulent activity , bonus abuse might be the clearest example of how e-wallets can hurt operators . The practice involves players creating fraudulent accounts for the sole purpose of using promotional offers that are designed to acquire new players , without ever , or only as part of the wider scam , placing bets with their own money .
When these codes are used in conjunction with bogus player accounts , gaming platforms are directly losing funds that they invested into acquiring new players . Anecdotal evidence suggests that bonuses can amount to as much as 35 % of gross revenue spend and bonus abuse can cost as much as 15 % of gross revenue .
Bonus abuse is further exacerbated by fraudsters who scale up their activity by creating dozens of fake accounts . Most use e-wallets because they allow users to create multiple anonymous accounts from a single device and fund them by numerous methods without any transparency to the operator .
Furthermore , since a single wallet can be funded by numerous accounts , possibly hundreds , it becomes impossible to know their true owners . In theory , this anonymity may also enable banned users to create new accounts by proxy , making it even harder for operators to clamp down on bonus abuse .
JENS BADER has more than 20 years of experience in the payments industry and recently co-founded MuchBetter , the new payments application for igaming .
58 iGB Affiliate Issue 69 JUN / JUL 2018