iGaming Affiliate Fraud: How to Detect, Prevent & Stop it in 2024?

iGaming affiliate fraud can be a huge problem for iGaming businesses. It not only leads to financial losses, but also damages your credibility and reputation. Therefore, it is vital to recognize the first signs of affiliate fraud and take measures to prevent it in the future.

In this blog post, we will look at the different types of iGaming affiliate fraud and how they can be identified.

We will also explore some key strategies to prevent fraud from affecting your business in the first place. With the tips outlined here, you can ensure that your business remains secure from malicious activities.

We’ll start by discussing the different types of iGaming partner fraud and how to detect them. 

So let’s get started!

Threat	How to Detect?	How to Prevent?
Fake Traffic	Monitor traffic spikes & irregular patterns	Set thresholds for suspicious activity; block IPs
Cookie Stuffing	Track cookie origin and lifespan	Use first-party cookies; monitor for bulk cookie drops
Proxy Users	Geo-IP analysis; velocity checks	IP blacklists; multi-factor authentication
Stolen Credit Card Transactions	Watch for multiple small deposits	Use AI for iGaming fraud detection; two-step verification
Identity Theft	Unusual changes in user behavior, malicious behavior detection	Strong passwords; security questions
Ad Stacking	Check ad viewability metrics	Use ad verification services; penalize violators
Click Spamming	Analyze click-to-install time	Set time thresholds; use anti-spam tech
Fake Accounts	Monitor for duplicate emails, IPs	CAPTCHA; email and SMS verification
Commission Evasion	Track inconsistencies between clicks and conversions	Implement secure tracking solutions
Software Fraud (bots, malware)	Monitor for non-human interactions	Anti-bot measures; regularly update security protocols

Now, let’s get deeper into this complicated and dangerous field.

Understanding iGaming Fraud

You may have heard of iGaming fraud, but do you actually know what it is and how to detect it? 

In the simplest terms, iGaming scam is a type of malicious behavior that takes advantage of referral programs and incentives from online gaming websites.

In the realm of iGaming, fraud occurs when unscrupulous players or affiliates attempt to game the system for personal gain. This can take many forms, including creating multiple accounts with different manipulation techniques, using malicious software or scripts to alter game outcomes, or fraudulent activities such as deceiving customers or withholding payment of winnings.

Although fraud in iGaming can be difficult to detect, there are some important signs you should look out for. These include higher-than-normal winnings among certain players, suspicious account activity (such as creating multiple accounts or setting up fake accounts), and unusually high amounts of traffic to your website originating from a single country or region.

Monitoring these potential fraud indicators, allows you to stay ahead of the curve and take steps to mitigate losses if necessary.

The Different Types of Affiliate Fraud

Unfortunately, fraud prevention is an important part of iGaming affiliate marketing. To stay ahead of the curve, you must know how to detect fraud and take steps to prevent it. Here are a few common types of fraud to watch out for:

• Bonus Abuse: This scam occurs when players take advantage of promotional offers to make a profit. The fraudster will use multiple accounts, often with false information, to gain bonuses or cash rewards intended for first-time players.
• Commission Theft: This involves stealing commission from other affiliates by altering tracking codes or using other fraudulent methods.
• Cookie Stuffing: This is a fancy way of referring to inserting affiliate tracking cookies onto a user’s device without their knowledge. This can result in the affiliate receiving commissions for sales that were not actually generated through their own efforts.
• Incentivized Traffic: In this case, the affiliate will attempt to generate traffic by offering rewards for visiting their website, downloading their app, or signing up for their product. This incentive scheme can create artificial demand or artificially high numbers on a website’s analytics.
• Payment Fraud: This involves the fraudulent use of someone else’s credit card or payment processing system. Affiliates must use secure payment systems with established protocols to verify transactions and guard against payment fraud.
• Affiliate Hijacking: Is when an affiliate alters the tracking code of another affiliate to receive a commission for sales that they did not actually generate.
• Fake Sales: This means creating fake sales through fake identities, fake credit card information, or other fraudulent methods.
• Click Fraud: This is a popular way of scamming by generating fake clicks on affiliate links in order to inflate earnings artificially.

No matter what type of iGaming affiliate program you are running, it’s important to be aware of potential signs and symptoms of affiliate fraud so that you can identify any suspicious activity quickly and take appropriate action.

How to Identify Fraudulent Traffic

The prevalence of iGaming affiliate fraud can be hard to identify, but there are a few key indicators that can help you spot it when it occurs:

1. Unusual User Behavior – Look out for users who only visit specific pages or affiliate sites or use multiple computers and/or user profiles to access games.
2. High Number of Brand Searches – If you see an unusually large number of searches for your brand in a short period, this could indicate fraudsters are trying to figure out how your program works.
3. Very High Conversion Rates: Monitoring the conversion rates of affiliate campaigns can also help identify fraudulent traffic. Abnormal spikes or dips in conversion rates could indicate using incentive-based methods or other forms of fraud.
4. Inconsistent Numbers – Look for anything that seems out of line with historical data, such as unusually high activity or spikes in traffic from certain countries or IP addresses.
5. Unusually High Affiliate Earnings: Keeping a close eye on the earnings generated by affiliates can also help identify fraudulent traffic. Irregular spikes or dips in earnings could indicate using incentive-based methods or other forms of fraud.

If any of these red flags are present, it is time to investigate further by checking the IP addresses and user data associated with the suspicious behavior. 

It’s important to be proactive in identifying fraudulent traffic in order to prevent it from affecting the reputation of the business and the overall credibility of the industry. This can include using affiliate fraud detection tools such as Anti-Fraud Logic, (the one we have developed and used at Scaleo), regular audits of affiliate accounts, and implementing anti-fraud measures.

By taking these steps, you can protect yourself and your business from iGaming affiliate fraud.

Techniques for Tracking Suspicious Activities

With the rapid growth of the iGaming industry, it has become increasingly important to stay abreast of techniques for tracking suspicious activities in order to detect potential fraud. Here are some methods that can be used to detect affiliate fraud in the iGaming industry:

Set Up Fraud Alerts

Fraud alerts provide early warning signs of suspicious activities and can be used to flag potentially fraudulent activity before it becomes a full-blown issue. Some tools, such as Anti-Fraid Logic, allow you to set up custom fraud alerts that alert you when suspicious patterns arise.

Track Your Campaigns Closely

Keeping a close eye on your campaigns is a major key to discovering any iGaming affiliate fraud. Keeping track of all clicks and conversions, as well as analyzing any discrepancies between them, can help identify if there is any potentially fraudulent activity occurring.

Utilize Affiliate Tracking Software

Using specialized reporting software, such as Scaleo, can help identify discrepancies between clicks, conversions, and revenue generated from various campaigns and affiliates. This software also allows you to monitor changes in traffic patterns and acquisition costs, allowing you to spot anything out of the ordinary easily.

By monitoring and tracking your campaigns carefully, you can ensure that you’re not falling victim to any potential iGaming affiliate fraud.

Affiliate Accounts Audit

Most iGaming affiliates provide services for the lifetime of their players, so staying on top of affiliate accounts is essential for avoiding fraud and preventing missed payments. A thorough audit should be conducted continuously to ensure that all payments are tracked accurately and fairly.

Here are some tips to help you audit affiliate accounts:

• Create a checklist of criteria that must be met, such as verifying payments and reviewing account agreements
• Examine the source of each signup to look for suspicious activity
• Contact players directly to verify their engagement with the program
• Monitor traffic sources for bogus referrals
• Review account statements regularly to identify any irregularities

By thoroughly auditing your affiliate accounts, you can safeguard against potential fraud and recover any lost revenue from fraudulent activities. Taking the time to go through these steps can save you money in the long run and help you maintain ethical business practices.

Strategies to Mitigate the Risk of iGaming Fraud

The high risks associated with iGaming fraud are real, but they are manageable. With the right information and technology in place, you can identify potential fraud and mitigate it before it costs you money. Here are a few strategies to help keep your business secure:

Leverage AI and Machine Learning

The use of artificial intelligence (AI) and machine learning (ML) in detecting affiliates’ fraudulent activities is key to preventing fraud. AI and ML can analyze patterns of behavior to identify players who have an unusually high number of wins or losses over a period of time. It can also detect irregularities in payment processing activities to identify players attempting to abuse bonus offers or withdrawal requests.

IP Fraud Score

The IP Fraud Score is a metric used to assess the likelihood of fraudulent activity associated with a particular IP address. These fraud scores are calculated based on various factors including historical data, geographical location, and suspicious patterns.

Analyzing these factors, allows igaming businesses to better understand the potential risks associated with an IP address and take appropriate measures to protect their systems and resources. Monitoring IP Fraud Scores can help in identifying and preventing fraudulent activities such as identity theft, phishing attacks, and unauthorized access attempts.

Fraud Score (also called IP score) is an important tool in maintaining the security and integrity of online platforms and safeguarding sensitive information.

Here is a screenshot from Scaleo, where you can see how traffic is monitored and rated in real-time, and the IP score tells you if the traffic is legit or not, based on percentages.

Implement KYC Procedures

Knowing Your Customer (KYC) procedures are an effective way to spot fraudulent activities and protect your iGaming business from being taken advantage of. In addition to verifying customers’ identities, KYC checks also involve monitoring their activity for any suspicious behavior or attempts to abuse bonus offers, payment systems, or other services offered by your company.

Monitor Affiliate Performance

Monitoring affiliate performance metrics is essential in detecting fraud and mitigating risks associated with iGaming affiliates. This includes tracking a range of factors, such as the marketing cost per acquisition, revenue per acquisition, and cost per click, among many others. These metrics will help you identify any affiliates who may be promoting your brand without adhering to your rules or engaging in fraudulent activities.

Implementation of Anti-Fraud Measures

In order to prevent iGaming affiliate fraud, certain measures need to be implemented. These measures include:

Monitoring Tracking Links

This is one of the best ways to prevent fraud in iGaming affiliates. This means tracking the source of referral traffic and ensuring it is coming from legitimate sources. If any suspicious activity is detected, an investigation can be conducted to determine its source and take appropriate action.

Automated Fraud Detection

Automated iGaming fraud detection tools (such as the aforementioned Anti Fraud Logic) can be used to detect any suspicious activity or anomalous patterns in real time. This includes monitoring traffic sources, IP addresses, and other user information for any potential irregularities. Using these tools ensures that any fraud attempts are identified quickly and effectively so that they can be resolved without further financial losses.

KYC Verification

Know Your Customer verification is another important measure in iGaming affiliate fraud prevention. This involves verifying the identity of each customer using a combination of data points such as name, address, email address, phone number, etc., before allowing them access to the platform.

This helps ensure only legitimate customers are allowed access and helps to mitigate any potential fraudulent activities.

Conclusion

It’s essential to safeguard your iGaming business from fraud and dishonest affiliates. To do this, thoroughly review your partner’s API, integrate regular checks in all payments, use proper analytics tools and insights, and proactively tackle unauthorized activities.

Additionally, stay up-to-date with ever-evolving technologies, fraud tactics, and legislation changes. Implementing the tips outlined here can help you detect, prevent and handle iGaming affiliate fraud to ensure the success of your business for many years to come.

Detecting iGaming Affiliate Fraud – FAQs

When it comes to detecting affiliate fraud in the iGaming industry, some questions frequently come up. Here are the answers to some of the most common questions:

Last Updated on November 23, 2023