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IN-DEPTH 5 July 2018
Key trends in online gambling for 2018 and beyond
Dramatic changes are in store for the online gambling industry which will no doubt impact their fraud management teams. New operators are cropping up even as existing operators consolidate. This, along with strong market growth and new operating geographies (including the recently opened up online sports betting market in the United States), significantly increases the competitive pressure on gambling operators. We’re in a situation where every new player counts and every new VIP player is crucial to the success of the business.
By Iovation

Players habits are also significantly shifting. As players move from playing on a desktop computer to a mobile device, there is less tolerance for friction caused by security and fraud prevention measures. Players are also now playing on multiple devices (phone, tablet, laptop, desktop) and expect a consistent experience across all devices.

Techniques employed by fraudsters also continue to evolve and are growing increasingly complex. Fraud activities are no longer limited to just using stolen credit cards or other kinds of payment fraud. Advanced computer tools and techniques are being utilized by fraudsters worldwide. Detecting and preventing their efforts now requires sophisticated technologies like machine learning and artificial intelligence.

Finally, changes to online data privacy regulations in the UK and European Union are the largest in a generation and potentially could impact your security and fraud prevention activities by limiting the type of data that you can collect about your players.

What is the impact of these trends? They are creating an environment where the fraud management team can no longer work in relative isolation while focused on fraud-only activities like reducing chargebacks and other types of targeted fraud. Instead, by working closely and coordinating with marketing, sales, product/business owner, and data security teams, the fraud prevention team can make a broader impact on the business such as improved user experience, increased player account security, and revenue growth.

Changing Habits of Players

Gambling on the go from mobile devices is on the rise. According to Online Gambling Quarterly, 61% of gambling operators’ revenue comes via mobile devices. Furthermore, 72% of betting stakes are from mobile devices. There are several important implications here.

At iovation, we also are seeing this move towards mobile device.

First, mobile players demand convenience and ease of use. Having to login each time by typing the traditional username/password is often unacceptable to these users. Even with password managers, the extra seconds needed to lookup/copy/paste a username and password is often enough of a hindrance that a player will switch to a different game that is easier to use yet incorporates more advanced protections like biometric identification.

Second, mobile players are not using only their mobile phones for these games. They are also using devices such as their tablet, work laptop, or home computer. Having a consistent user experience across these different platforms is vital to the overall user experience.

Why does this matter to fraud prevention specialists? The most obvious impact is that fraud prevention technologies used by the operator must not only support multiple playing platforms, but must be able to track fraud committed across all platforms. Tracking fraud across multiple devices is difficult without proper device-fingerprinting fraud prevention technology. These tools allow for devices to be identified and then later recognized regardless of which user is actually using the device.

Growing Fraudster Sophistication

Even though fraudsters and criminals continue to utilize payment fraud resulting in expensive chargebacks as well as increased credit card processing expenses, they also utilize a number of other fraud practices.

Fraudsters perpetrate a wide range of fraud and in-game social abuses including credit card fraud, fraudulent deposits, chargebacks, cheating and collusion, chip dumping, promotion and bonus abuse, email spam, money laundering and account takeover. Despite gambling sites’ efforts to detect suspicious players, Internet-savvy criminals have learned how to mask their true identity by changing account information to circumvent conventional methods of fraud detection such as IP address and geo-location validation, third-party credit verification, and other tools that monitor and analyze player activities such as winning percentage, hands played, and who they’ve won and lost to.

As fraudsters routinely change identities, many online gambling sites are being abused by the same people over and over again without even knowing. Unfortunately, for online casinos that lack the ability to identify fraudulent computers, even if a fraudulent account is detected and shut down, there’s nothing to prevent the fraudsters from immediately creating a new account under another identity.

As fraudsters continue to hide behind the Internet’s built-in anonymity, identity and financially-based fraud management systems alone are not sufficient in catching sophisticated fraud and abuse. The inability to identify fraudsters sitting alongside legitimate players at a virtual poker table underscores the growing need for online casinos to deploy more effective solutions that look at information independent of what data is supplied by users.

In order to effectively combat identity theft, online gambling sites must move beyond relying almost solely on personal information for fraud analysis. As identity-based fraud management systems continue to crunch the same identity data in a variety of ways, an entirely different technique, one that looks at information independent of what is provided by the user, creates significant value and uplift in the fight against fraud.

A device fingerprinting fraud prevention solution focuses on the device—not the person—to identify and re-identify a user. This kind of device-centric solution provides online gambling/gaming sites with unique insight into account creation and relationships and exposes fraud that is invisible to other tools. This type of solution has the added advantage in that it minimizes, and often eliminates, the need for storing and processing personal information which is a hot topic currently in the UK and European Union.

Better User Experience

Most fraud and risk departments are considered cost centers with little influence to increase revenue. If anything, sales and marketing groups may occasionally get frustrated with the often conservative approach of a fraud team when it comes to rejecting new players obtained from a marketing campaign because of risk concerns.

However, the fraud team has a wealth of data at their disposal that is beneficial for improving user experience (of interest to the sales and marketing teams), but also useful to the business data security team to improve player account security.

Frictionless, Flexible, and Secure Login

As mentioned earlier, as more players utilize on the go mobile devices their tolerance for repeatedly entering usernames/passwords is significantly reduced. From a user experience perspective, it is important to get players into the game and playing as quickly as possible, while not jeopardizing the security of their accounts. Furthermore, as these same players move from one device platform to another, they have an expectation that ease of login on one platform should be available on all.

A device fingerprinting solution can help improve this aspect of user experience. When a specific device is paired with a user account, and then is reliably and accurately recognized as the same device in the future, traditional username/password login procedures can be safely skipped as long as there are no device risk indicators (information that a fraud prevention tool can provide) present.

Further enhancements to the user experience can occur by incorporating flexible and configurable multifactor authentication technology. This gives every player the ability to determine how much security they want to incorporate for activities such as logging in, playing a game, etc. These additional security factors could include things such as PINs, biometrics sensors, or even the presence of a trusted bluetooth device.

Identifying VIP Players

One of the best ways to differentiate user experience from the competition is to offer them rewards, incentives, and promotions. However, fraudsters are aware of this and often abuse these types of programs. Device fingerprinting coupled with sophisticated machine learning capabilities allows one to predict (refer to Figure 3) the trustworthiness or risk for any online transaction just by comparing device characteristics to billions of other past transactions that have similar characteristics. With this information, you have the ability to offer lucrative incentives to trustworthy VIPs and limit the incentives for suspected fraudsters. Conclusions

Fraud prevention teams should no longer be siloed in their efforts. Nor should they be considered just a cost center focused on minimizing fraud losses. When using technologies such as device fingerprinting, the fraud prevention group possesses data and technologies that can help the organization achieve business objectives such as growing market share and revenue, increasing player retention and new player acquisition, and even improving player account security.
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IN-DEPTH 18 October 2019
Automating acquisition

Alex Czajkowski discusses the automation of acquisition within online gaming.

It’s almost every operator’s perennially hot topic - acquisition. While acquisition strategies can vary market-by-market, there is a case in every market for automating more of the process to improve conversion rates or significantly reduce acquisition costs. In any market, you can segment your prospects, regardless of your product, into two: inner-directed and outer-directed. Inner-directed prospects know what they want; your job is to get out of their way, but be there for any obstacles that occur in achieving their goal.

Typically, this is to join, deposit, get a bonus and play. For example, when I go into a store to buy a laptop and having to deal with some sales clerk who knows less about them than I do (and in fact may be financially incentivised to push me to the wrong selection), I know what I want; get out of my way. But the sales clerk may know something I don’t, like how last year’s model is now significantly reduced and the changes were largely cosmetic.

Our inner-directed online gaming prospects benefit from a bit of guidance in their rush to register. No, they don’t need to know of password format requirements; they’re using a sufficiently robust password to begin with and they’re experienced players. But by reminding them that with every play they are accumulating loyalty points they can redeem for cash, this could be welcome news at a new site. So while we don’t want to interfere with the inner-directed prospects hurling themselves through our conversion funnel, we do need to be there to inform and support. This also helps ensure a higher conversion rate, not to mention an opportunity to really introduce the brand voice.

Sure, you could use distracting pop-ups, or unmemorable banners alongside the necessary forms. But those are all one-way communications. You’re talking at the prospect rather than with the prospect. Sinitic.ai, a leading AI-enabled, gaming-focused chatbot provider, or more specifically, an automated intelligent customer experience (AICX), enables operators to engage in “asynchronous conversations” through this process. It uses proactive yet passive messaging through an open, automated chat window. In this window, the chatbot prompts as the player moves through the forms, offering to help but also reminding the player of site benefits and interesting news (e.g. there’s a new game to try or a big match tonight).

Should our inner-directed prospective be intrigued by any of the prompts, they merely have to chat back to the bot. With language-specific NLP (natural language processing) behind the bot, the prospect and the site can have a natural conversation about that topic. They could even discuss any relevant topic the prospect may choose to ask about, such as: What are the odds on Liverpool vs. Arsenal tonight? An integrated chatbot can answer these questions, in real time, as straightforward or cheekily/sassily as you want your brand voice to be.

The outer-directed prospect is just the opposite; they need assistance. They are like the new dad standing in front of 300 choices for car seats for their first baby, with prices ranging from $50 to $500. Only one word comes to mind – help. Here, an intelligent chatbot can walk this prospect through the registration, deposit and bonus processes, field by field if necessary; just as if there was a customer service agent holding their hand through the process, but with no delay, as a human agent would be handling multiple chats and not be truly one-on-one. An integrated chatbot should know where the prospect is in the journey, right down to the field in focus on the form, and prompt appropriately.

Again, the chatbot can also insert “marketing messages,” new promotions that may be of interest, game suggestions for the newbie to try and matches they want to bet on. These all help in the conversion process, not to mention churn; one key reason online casino operators so quickly lose their first players is the players play the wrong game and have a fast bust out, leaving disappointed. This can be prevented through chat-supported onboarding with proactive chat for churn prevention.

In some markets and cultures, prospects skew more to this outer-directed side. For example, in Japan, prospects want to know everything going into a site, while in Vietnam, they do want their hand held. In more mature western markets, inner-directed players may be more prevalent, but the key is automated intelligent chat support for both segments. Speaking of Asian markets, one clear difference between the west and specifically China, is the necessity to leverage one-to-one direct sales communications to bring players onto the site. For China, operators have rooms full of imported Chinese speakers, at no small cost, chatting with prospective and existing players over WeChat and other social platforms. These one-to-one chats for acquisition can also be automated, right down to including the 20% or so of messaging we classify as flirty.

Sinitic.ai's AICX solutions can push messaging through virtually any channel, be it the ubiquitous (and popular) web chat, SMS, WeChat, Line, Facebook Messenger, WhatsApp etc. So wherever your preferred hunting ground for players is, you can set loose an AI-based chatbot to harvest players with the same methodology you use in the call centre. But of course chatbots don’t take breaks, get ill, ask for raises or housing or travel expenses - all real call centre issues. “Chatbots are the new email,” some say. But they are actually better; they are as synchronous or asynchronous as the player wants. They can be chatty and real time (synchronous) or stand-by ready, simply announcing a relevant message that may or may not initiate a reply from the player (asynchronous).

Chatbots are increasingly the preferred way for players to interact with a site; why dig through the FAQ when you can just ask the chatbot? Why not even navigate using the chatbot? “Take me to the game with the biggest jackpot.” Using AI and NLP, Sinitic.ai’s AICX solution can add an entire new level of interactivity to your site, delivering automated acquisitions, improved conversions, reduced churn and better player lifetime values.

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