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People in U.S. are Taking More Evasive Measures Than Others Worldwide to Gamble Online According to iovation Research

According to iovation, gambling transactions from the U.S. are using evasion techniques 119 percent more than those internationally

iovation, a TransUnion company, released findings that show how people in the U.S. are bypassing system controls on gambling websites and apps. The iovation analysis found that 4.13 percent of online gambling transactions originating from the U.S., predominantly to European gambling operators, used evasion techniques such as trying to hide their location. This is 119 percent higher than iovation’s finding that 1.89 percent of online gambling transactions from outside the U.S. used evasion techniques.

In many countries and states, online casinos are restricted from accepting payments from U.S. citizens and therefore are unable to offer them gambling services.

“There is indeed a pent-up demand in the U.S., where gamblers will go to rather extreme measures to try to get around restrictions to become a customer of a foreign gambling site,” said Jon Karl, iovation executive vice president of corporate development and co-founder.

Some of the most glaring types of evasion techniques iovation has detected with online gambling transactions include:

  • The use of the Tor Browser: Tor is a privacy protocol that is intended to help people browse the Internet anonymously.
  • Hiding behind a proxy: Accessing the Internet through a proxy, a service that masks users’ actual browser data, makes it more difficult to locate a user by means of an IP address.
  • Geolocation mismatch: A person isn’t in the same time zone as their device displays.

“Device intelligence has proven effective at detecting customers trying to play on gambling sites from which they are restricted,” said Karl. “This will be essential for gambling operators launching in the U.S. that will need to comply with interstate regulations and limit play by geographic boundaries.”

Methodology iovation came to its conclusions by analyzing the more than half a billion online transactions it evaluated for its global gambling customers from March 2018 to March 2019. Those operators use iovation’s intelligence based on its experience with nearly 6 billion devices, insight into unique device behavioral patterns and cryptographically secure multifactor authentication methods to fight fraud, maintain security and ensure compliance.

For other iovation intelligence about online gambling trends, read iovation’s 2019 Gambling Industry Report at www.iovation.com.


iovations’ Product Marketing Manager Angie White took some time out to answer a few questions as to why gambling transactions from the U.S. are using evasion more than those internationally, what sports betting operators need to be aware of moving forward, and more.

Why do you believe the numbers are so high for people in the U.S. that are bypassing system controls on gambling websites and apps?

White: Quite simply, there is pent up demand in the U.S. market. Some of the more sophisticated users are using anonymizing technologies such as Tor and proxy servers to try and gain access to games outside of the U.S. because they don’t have access within their own state.

What is being done to lower this percentage and regulate this market further in the future?

White: It’s important to point out that these attempts are currently being intercepted. By using device intelligence, we’re able to alert operators to the use of evasion techniques. They can then deny that transaction if it’s out of jurisdiction or send it to review if there’s some question about where it’s originating from. This is something that will be very important in the emerging U.S. market as well. You’ll likely see similar trends in the coming years, with U.S. consumers trying to place bets from states where sports betting is still illegal. Operators will need to have strong controls in place to detect evasion attempts and control play by geographic boundaries using technology such as geofencing.

If this trend continues do you think states that have yet to legalize online gaming, but are proposing it, will reconsider?

White: I don’t believe so, because you also have an illegal market in the U.S. that is estimated by some to be worth $3 billion. Players using evasion techniques to get into online games and or betting through illegal markets just shows the extent of pent up demand. If states are worried about regulating gaming it’s much better to legalize so that it can be controlled in a well regulated market and both players and operators can be protected.

What practices are being used to fight fraud, maintain security and ensure compliance in European countries that has not hit the U.S. yet (if any).

White: The European online gaming market is definitely much more mature than the U.S. market. Likewise the European operators also have a lot of experience in managing fraud such as account takeover, VIP account broking and credit card fraud, along with preventing game abuses such as cheating and bonus abuse. One of the key tools in fighting such threats is device intelligence and reputation. Device intelligence uncovers otherwise invisible connections, allowing you to see for example that one device has set up 100 new accounts to exploit your bonuses. With device reputation, operators can share confirmed fraud reports across a network of operators. For example, an operator could associate a device with credit card fraud. Subsequently, if that device shows up on another operator’s site they are alerted to the past history of fraud in real time.

How do you see this changing in the next year?

White: Unfortunately, I think a lot of new operators starting up in the U.S. aren’t yet aware of how large a problem fraud can be. We’ve seen well-organized fraud rings systematically target a game and exploit it for millions of dollars very quickly. It’s important for operators to think through what protections they need to put into place as they’re standing up their games. It’s not enough to have the best game, you also need to protect your players and your business, all while providing a great player experience. I think the operators that really think through how they can leverage technology to prevent fraud and comply with regulations such as responsible gaming, anti-money laundering (AML) and know your customer (KYC) without degrading the player experience are going to have a distinct market advantage versus those that have to react once they start getting hit with fraud or fined for noncompliance.

About iovation:

iovation, a TransUnion company, was founded with a simple guiding mission: to make the Internet a safer place for people to conduct business. Since 2004, the company has been delivering against that goal, helping brands protect and engage their customers, and keeping them secure in the complex digital world. Armed with the world’s largest and most precise database of reputation insights and cryptographically secure multifactor authentication methods, iovation safeguards tens of millions of digital transactions each day.

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