Euro 2024 in Germany took place between 14th June and 14th July. As one of the year’s major events, hundreds of millions of sports fans globally were expected to place online bets.
A YouGov Direct study conducted during the last Euros found that 76% of betters turned to online bookmakers, with only 15% placing a bet in person. This year, the percentage of online betters is likely to be even higher.
What does this mean for online gaming operators? On the one hand, it’s great news. More volumes means more online bets, and ultimately, more revenue. But at the same time, they’ll have two key challenges to overcome. Firstly, ensuring that their onboarding processes can scale in line with customer demand. Secondly, keeping bonus abuse at bay as fraudsters seek to capitalise on cash offers.
Big games, bigger bets: major sporting events offer huge opportunities for online betting
Major sporting events mean big opportunities for betting operators. From the Olympics to the Super Bowl, to the Euros: all bring high volumes of traffic to gambling platforms. The ease of access that online betting now offers, and the broad appeal of such sporting events mean both casual and regular bettors are more active than usual.
It’s also common for operators to run offers and promotions around such sporting events, including free bets, sign-up bonuses, and bet credits, as they look to attract new customers over the competition.
All of this means more activity on betting platforms. During the first week of Euro 2024 (14-20th June), the volume of onboarding checks for Onfido’s gambling partners increased 36% globally compared to the week prior (7-13th June). In the UK, onboarding checks for the gambling industry increased a huge 90% in that same period, and in Europe increased 52%.
High volumes, higher stakes: gambling fraud rates rise 24% during Euro 2024
But with increased traffic comes more fraud. Alongside the rise in onboarding checks, fraud attempts increased 24.4% in the first week of Euro 2024 globally, from an average rate of 4.5% to 5.6%. Fraud rates then continued to rise rapidly: in the final week of Euro 2024 average fraud rates hit 7.5% (a 66% increase).
In the UK and Europe, there was a similar pattern. Fraud rates in both regions increased 52%, from average fraud rates of 8% in the UK and 6% in Europe during the week prior to Euro 2024, to 12.2% in the UK and 9.1% in Europe during the last week of Euro 2024.
The online gambling space is attractive to fraudsters for two reasons: 1) the majority of bets are placed online and is therefore very accessible, and 2) there are often cash rewards on the table. And it seems higher stakes means more fraud. Higher stake games such as quarter and semi-finals seem to correspond to higher levels of fraud in the gambling industry.
Fraud tactics: bonus abuse to money laundering
Fraudsters typically target online betting platforms for one of two reasons. Either to take advantage of bonus offers (bonus abuse fraud) or to launder money.
Bonus abuse fraud
During major events such as the Euros, lots of companies run sign-up rewards such as £10 free bets for new users. These types of bonus rewards are generally small, so to take full advantage, fraudsters need to scale attacks and create hundreds of accounts using fake credentials.
The majority (97%) of fraud attempts Onfido has seen target gambling operators during Euro 2024 are classified as unsophisticated fraud. This reinforces the ‘scalable’ approach that fraudsters use to take advantage of sign-up bonuses. They use unsophisticated, but easily scalable, types of attacks to attempt to open hundreds of new accounts.
Money laundering
Criminals also sometimes use gambling platforms for money laundering. Because winnings are tax free and there are generally no audit trails, it’s easier to hide the original, illegal source of funds.
Fraud rates tend to spike when onboarding numbers increase (as fraudsters like to hide among the volume). So some fraudsters might attempt to use the volumes around major events to their advantage.
How online gambling operators can scale onboarding and tackle fraud
Online gambling operators can take steps to help safeguard player onboarding during major sporting events. By implementing digital identity verification that combines document and biometric verification, they can build strong assurance in customer identities.
Onfido can quickly and safely verify customers, confirming that the submitted document is real and that it belongs to the person who submitted the document. Find out more about how an identity verification process can prevent fraud.
