12 May, 2023

Final Word: Digital Element speaks on the hidden dangers of VPNs in betting

Charlie Johnson, VP, International at Digital Element, discusses how using IP intelligence can help to spot VPNs, darknets and proxies in betting.

Over the 12 months up to March 2022,  32 million people accessed online gambling platforms in the UK. Yet, while many gamblers follow legal regulations, those seeking new experiences, more opportunities and higher yields frequently cross virtual borders. Using widely available Virtual Private Networks (VPNs) allows them to do this seemingly without trace, driving an increase in illegal gambling across the globe.The number of UK bettors visiting black market gambling sites tripled during the Qatar World Cup, for example, while across the Atlantic, operators experienced 9,000 illegal betting attempts related to Super Bowl LVII. However, gambling businesses are not only at risk of legal repercussions. Many are losing out on huge numbers of potential customers through inaccurate VPN identifying solutions – tools they are required to implement to meet regulatory needs – potentially jeopardising millions in revenue.

Avoiding regulations is problematic for all

To avoid the issues of unregulated markets – from money laundering and corruption to false advertising and affected minors – regulations have brought crucial rules that safeguard all parties. But while independent audits, background checks and support initiatives now ensure better protection, using a VPN creates risks for operators and gamblers alike. British citizens using platforms outside UK jurisdiction have no recourse to protections such as the GC (Gambling Commission) or IBAS (Independent Betting Adjudication Service). At the same time, platforms face the potential loss of both licences and revenue streams if they don’t catch illegal players and VPNs pose sizeable challenges to doing so effectively.

Some solutions are even able to differentiate between corporate VPNs, consumer VPNs or VPNs which cater to malicious actors

The fight to keep up with behaviour shifts

Verifying mobile traffic has become a harder task amid the rapid increase in mobile gambling. This has knock-on effects when it comes to verifying mobile traffic: if users access the internet through 4G or 5G they can (and often do) disable location tracking, making it hard for location-related regulations to be enforced and illegal activity tracked. There are some options for operators here – such as harnessing CRM systems and in-app location data to shed additional light on user identity – but more refined insight is needed. Opting to simply block any user with an active VPN also comes with a high chance of cutting off legitimate users alongside those applying VPNs for nefarious purposes. An estimated 1.6 billion internet users run VPNs, many of whom cloak their identities due to privacy concerns. Operators looking to maintain compliance and capitalise on the UK’s £12.5bn ($15.3bn) online gambling market – currently the biggest worldwide – must therefore find smarter ways of assessing user validity.

Is there a winning way to combat unauthorised access?

One useful starting point is IP address data. To dive into the technical details briefly, IP addresses are expressed as a set of four numbers (such as with each number varying from 0 to 255; meaning the full range goes from to Using these numbers, IP intelligence software can pinpoint user location at a broad level, typically by accessing the first three sections to define region-level location. Deeper accuracy, however, requires the full set. Truly smart tools can map all four sections, which provides an exact understanding of location down to the postcode level, without revealing personally identifiable information or compromising privacy. The most advanced solutions can also identify the 256 different address options when the first three octets are the same and drill down to determine which city is applicable for each variable.

This granularity helps avoid costly blanket blocking mistakes. Lacking the critical last piece of the IP address puzzle can mean that, when a potential VPN is detected, any IP addresses with three matching octets is blocked. Instead, comprehensive understanding of exactly where users are located ensures only specific addresses are flagged for investigation, including illegal users, while allowing operators to continue offering access for valuable, permitted users; not to mention gaining insight they can tap to deliver more tailored, engaging experiences.

Additionally, detailed connection information, such as VPN use, proxies, anonymisers, ISP, darknets, data and hosting centres, as well as different types of mobile traffic, also enables operators to successfully detect a greater number of suspicious connections. Some solutions are even able to differentiate between corporate VPNs, consumer VPNs or VPNs which cater to malicious actors. Global connectivity and access can make it difficult to keep markets regulated and players inside their borders. While there is no bulletproof way to prevent unauthorised access, automatically highlighting genuinely questionable traffic can give operators time to evaluate activity and separate the good from the bad. By focusing on accurate IP and connection data, gambling operators can protect and improve their services, benefiting end users in the process.