The online gaming market is growing rapidly with a whooping market value of more than $200 billion. This growth is attributed to many factors such as the free-to-play approach offered by most gaming companies on the basic gameplay ( while purchasing in-game assets helps players earn more ), the greater accessibility of online gaming when compared to real-life gaming and the monetary rewards gotten from this online gaming. Just as these above-mentioned factors were the catalyst For online gaming success, they are also the features fraudsters leveraged to carry out scams.
Between 2022 and 2024, fraud in the online gaming sector increased by 64% year-over-year. Fraud losses for mobile casinos and betting platforms alone totalled $1.2 billion between 2022 and 2023. These fraudulent activities not only result in direct financial losses but also lead to reputational damage and increased scrutiny from regulators.
These scams are possible due to certain weaknesses in online gaming which include;
User's Loopholes: Some players use weak passwords such as their game name, phone numbers, etc which can easily be guessed by a scam. Others fail to enable security measures such as two-factor authentication. These loopholes allow scammers to access such accounts and steal tradeable in-game assets.
Impact Of Bots: The online gaming architecture allows for the use of BOTs (automated scripts that can perform repetitive in-game tasks). For gaming platforms where the use of Bots is not restricted, Bots can farm in-game currency, dominate matches and win bounty against real players. This can discourage genuine players while enriching the fraudster.
Unsecured payment system: Scammers look for loopholes in the payment system of a gaming platform and exploit it to steal the credit card details of a gamer, initiate exercise chargebacks for platforms that enabled it, use stolen credit card details to purchase things, etc.
Bonuses: Most gaming companies offer sign-up bonuses for customers as a way of giving them a way to kick-start their gaming journey. Sadly, fraudsters exploit these opportunities and create multiple accounts to enjoy the bonuses.
Unregulated in-game market/ Third party market: Some online gaming platform allows players to participate in off-site trading of in-game assets. Scammers leverage this to exchange fake in-game assets or scam sellers by not standing up to their part of the trade.
Possible Solution To Online Gaming Frauds
Welcome Bonus Abuse: The use of device fingerprinting, risk indicators, and facial verification. This will enable gaming platforms to identify and block users who were using proxy servers, automated scripts, and anti-fingerprinting tools to create fake accounts, thereby protecting against the abuse of sign-up bonuses and unhealthy competition between Bots and real players.
User's Security: The gaming platform can curb online gaming scams by mandating a two-factor authentication step-up for every gamer and a live verification during asset withdrawals.
Payment system: To combat money laundering or the unauthorized use of Credit cards, Gaming companies can force users to register with money service ventures, to comply with money laundering regulations so that the source of funding can be traced.
Strict Rule Against Off-site Exchange of In-game Assets
A gaming platform can state an outright ban for gamers exchanging in-game assets without following the official market avenue. This will help prevent newbies from falling victim to these scammers.
