How AI is Helping Online Casinos Detect Fraud in Real Time
The world of iGaming is enjoying a period of fast evolution. The online casinos are developing at a fast pace, but so are the frauds being committed in them. However, the new developments in the field of AI have provided gambling platforms with new ways to battle scammers. Here we will try to explain how.
Common Online Gambling Frauds
As with every type of fraud, in iGaming the methods also encompass a spectrum of activities and machinations that will give the scammer a way to exploit cyber vulnerabilities or use an unfair advantage on the game.
Most commonly, scammers will try to manipulate the game while tiptoeing on the margins of the rules. In online poker that will come in the form of collusion. Of course, before you engage in playing in one of the many poker casinos online, getting yourself familiarized with the rules is of paramount importance. To get the grips with the basics take a look at a guide on how to play (Source: https://www.pokerscout.com/guides/how-to-play-poker/).
Once you learn the rules, be on the lookout for collusion. Sometimes players will join up and spare one another in order to get to your money. This is strictly prohibited in all poker rooms. Other scammers will try to exploit promotions through bonus abuse and try to get unfair funds. Hackers might take over accounts through phishing or other methods to get your personal data and funds.
There’s also a massive problem of money laundering. This is the way money is moved to make illegal funds usable for criminal purposes. All these fraudulent activities are dangerous for both the players and the gambling platforms as they are a financial risk but also bordering on criminal and a serious threat to people’s trust in gambling operators.
How Does AI Help?
The trick with AI is that powerful algorithms are now becoming capable of processing incredible amounts of data in real time. With the models trained to look for patterns, but also anomalies in them, it is now much easier to point to potential frauds in online gambling. Trained models focusing on player behaviour analysis are used to flag anything suspicious in real-time, thus giving operators the opportunity to minimize damage.
This is basically performed through well-tuned pattern recognitions where AI can pick up subtle nuances that would be highly difficult to notice for a human, especially on a larger scale. On the other hand, machine learning models working on them use historical data and adapt with new findings over time, thus becoming more efficient in behavioral analysis. Using logs of “normal activity” as a baseline for pattern recognition, these models will look for deviations (these can be extremely high bets all of a sudden, or prompt withdrawal), and then put out flags for real moderators to investigate.
Technologies Used
On the forefront of AI fraud prevention are neural networks – machine learning models fashioned after the human brain. They are the key player when it comes to pattern detection on a more complex level, and provide a crucial advantage in the fight against sophisticated scams in online gambling. Combined with predictive analytics these networks can actually predict when and where the frauds will occur, through the trends noticed in historical data. This gives operators an opportunity to act preemptively and prevent financial and reputation damage.
On the money side of things, AI models also use data clustering as a technique to perceive anomalies standing out from the established clumps of collected data. In practice, this can show the fraud expert an unusual spike in credit withdrawals that’s connected to a certain region, which further indicates that there might be a money laundering operation going on, or some other form of massively coordinated fraud. Finally, NLP (natural language processing) models can also analyze text in public communication challenges in online casinos and immediately act on collusion or phishing.
Challenges of AI Implementation
Unfortunately, this technology has some downsides too. Most importantly, it takes a significant amount of money to implement and teach an AI model to work with online casinos. Similarly, there are still the legal issues of data privacy as these fraud prevention technologies have to be GDPR compliant, and that leaves a lot of vulnerability holes. There’s also the issue of new fraud methods constantly evolving and coming up which demands constant work on rooting out frauds from the false positives that also come up.
Conclusion
In spite of its slight drawbacks, AI is proving to be an invaluable tool to fight fraud in iGaming. Challenges do exist, but the upsides heavily outweigh the negatives. With the exponential development of AI/ML technology and its real-world applications, we can be certain that it will continue to be an important safeguard in the online gambling world.
