Sports Season Means That Gambling Fraud Is on the Rise

By Monica Eaton, Founder of Chargebacks911

If you already know that your team is going to win, then why not make a little money from your fandom? For many people, sports betting adds to the highs and lows of sports, and there has always been big money in the industry – and in criminal activity around it. 

Earlier this year, the American Gaming Association (AGA) reported that the sports betting market set a new revenue record in 2022 with $7.5 billion USD—an astounding 72.7 percent increase from 2021. As more and more states open their doors to online gambling, the issue of scammers targeting sports bettors is rising drastically. The UK, on the other hand, is seeing a decline in gaming, which has dropped from a peak of $7.6 billion USD in 2018 to $5.4 billion USD in 2021, though it is still a very significant market in which betting shops can be found on every high street. 

This difference is largely down to the fact that many US states have legalized online sports betting and other forms of gambling in recent years – betting online or on mobile devices is legal in 21 states and mostly possible in a further 4. Sportsbooks such as Draftkings and FanDuel have also invested heavily in advertising. In the UK, there have been no major changes to gaming laws in recent years, so the market has reached saturation.

A tricky landscape to spot scams

In pre-digital days, sports gambling fraud took the form of fixing games or illegal betting, but today it is almost entirely online, enabled by the surge in sports betting sites, especially in the US. As a consumer looking for the warning signs of fraud, sports betting can be a much trickier landscape to navigate, especially if a scammer has their system down pat. Many advertised betting services offer attractive discounts, introductory bonuses, and other “risk-free” deals that can seem too good to be true. Sadly, these websites or apps may belong to fraudsters attempting to con bettors out of their money. Depositing funds into seemingly legitimate accounts is just the beginning of a potentially long, fraudulent journey.

Just as with many other widespread forms of fraud, sports gambling fraud relies upon emotion – gamblers may be less cautious about giving fraudsters sensitive information when promised big payouts. Gambling and other behaviors that lower a person’s caution like drinking are heavily correlated, especially amongst people who are already under stress from financial losses.

How sports gambling fraud works

There are many ways for criminals to make money through online sports betting. As mentioned above, fake sites that may even look like established sites are a common way to skim credit card details from unwary gamblers. There are also fraud attempts on gaming sites themselves: fraudsters can use ‘multi-accounting’ to (literally) set up multiple accounts, using information culled from leaks of real customer information. These accounts can harvest the small bonuses and free bets available on many betting sites, and although no one bonus or free bet is worth much, an automated operation with tens of thousands of genuine pieces of customer information can make a great deal of money.

There are also more mundane forms of gambling fraud. Understandably, regret is a common emotion amongst gamblers, so many initiate chargeback claims to get their lost money back. These claims are clearly not legitimate, falling into the category of first-party fraud, but are extremely difficult to disprove. Without comprehensive, AI-powered chargebacks solutions, it will be costly and inefficient to try to dispute every chargeback. So, many gaming companies simply let them slide. Fraud and chargebacks are so common in the industry that new companies looking to enter the space will find it difficult and expensive to process payments and access mainstream banking services.

Stopping gambling fraud 

There are a number of steps that gamblers can take to ensure they are placing their bets with a reputable sports book. These include:

  • Be wary of enticing ads. Disregard pop-up ads, spam emails or SMS messages offering discounts or bonuses on bets, as this is a common tactic of scammers. Even if the message looks like it comes from a reputable sports book, this could be a fraudster who went to greater lengths to make their scam look legitimate.
  • Research the sportsbook before signing up. Check reviews from other customers, ratings and overall reputation.
  • Check the sportsbook’s licensing and regulation information. This should be clearly stated on their website.
  • Make sure the sportsbook offers secure banking options. Payment methods used by the vendor need to be reputable and secure. Make sure that they are using a valid SSL certificate on their site.
  • Check that the site is legitimate. A consumer might have intended to access a legitimate site, but have clicked on a link to a mirror site instead. Take a moment to check the URL of the site being visited or access them through official apps.
  • Take the time to read the terms and conditions of any sportsbook before signing up.
  • Ask for help from a trusted third party. Consult with a third party, such as an online gambling advisor or industry expert, to ensure the sportsbook is legitimate.

If someone believes they’ve been scammed placing an online sports bet, it is essential they contact their issuing bank right away and see what options are available to recover their funds.

To learn more visit: 

Monica Eaton is the Founder of Chargebacks911 and Fi911 and Chief Information Officer of Global Risk Technologies. Monica has worked tirelessly to educate merchants and financial institutions about hidden threats in the rapidly changing payment fraud landscape. Leading Chargebacks911, was founded in Tampa Bay, Florida, expanding internationally also to become Europe’s first chargeback remediation specialist to tackle the chargeback fraud problem. In ten years, Chargebacks911 has successfully protected more than 10 billion online transactions and has recovered over $1 billion in chargeback fraud. 

Recognizing that the impact of chargebacks goes beyond merchants, Fi911 provides unrivaled support to financial institutions with innovative back-office management technologies. Fi911’s pioneering DisputeLab™ tool streamlines chargeback management for acquirers, automating legacy processes and standardizing methods that simplify and speed the end-to-end workflow, improving the customer experience and accountability for all stakeholders.

Monica is a passionate diversity advocate committed to developing and sharing innovative solutions that empower the global fintech space. She has earned numerous awards, distinctions and special recognitions, including the Retail Systems Awards, where she received the ‘Outstanding Individual Achievement Award’ and was named ‘Global Leader of the Year’ at the Women in IT Awards.

About Chargebacks911  

Founded in 2011, Chargebacks911 is the first global company fully dedicated to mitigating chargeback risk and eliminating chargeback fraud. As industry-leading innovators, Chargebacks911 is credited with developing the most effective strategies for helping businesses manage disputes and reduce loss in various industries and sectors within the payments space.  

Chargebacks911 provides comprehensive SaaS solutions that are highly scalable for managing chargebacks, handling services and fraud strategy management. The company helps decrease the negative impact of chargebacks and provides real-time API connectivity and insights, thereby improving revenue retention using data-driven technology to help ensure sustainable growth for every member of the payment channel.   

 Chargebacks911’s unparalleled category experience and patented Intelligence Source Detection (ISD™) technology identifies the true source of chargebacks, automatically remediates fraudulently filed disputes, safeguards reputations, monitors feedback 24/7 and provides insight to proactively prevent future fraud.

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