Online Gambling is the activity of placing bets on a variety of casino games and sports events, through Internet-connected devices. It is a highly-regulated industry, with individual states deciding whether or not to permit it and setting regulations and licensing requirements for the operators. It is also subject to the same fraud risk management measures as other types of online transactions, including identity and payments fraud prevention, transaction monitoring and compliance, and limiting access by minors.
Gambling online provides a variety of benefits to players, including convenience and accessibility, a variety of different games, and competitive odds. However, there are a number of risks associated with gambling online, including addiction, financial problems, social isolation, decline in work or academic performance, and health issues. Gambling can also cause relationship conflicts due to secrecy and dishonesty, which can lead to broken trust.
To mitigate these risks, it’s important for FIs to understand red flag behaviors and activities in online gambling transactions, so they can be alert to potential issues with their customers. Using behavioral analytics, they can identify specific patterns that indicate high-risk behavior and adjust their controls accordingly. This approach reduces operational strain and allows them to focus their efforts on the most severe cases, ensuring efficient, high-impact fraud prevention and preserving player trust. This is particularly critical given the heightened attention on combating financial crime, especially as new payment methods like cryptocurrencies continue to expand in popularity. In addition, by detecting fraudulent activities early on, they can prevent account takeovers and build lasting customer loyalty.