The Battle for Online Gaming Security: Combating AI Infiltration and Fraud in the iGaming Industry

Online Gaming Security: What You’ll Learn

• Understanding Online Gaming Security: Learn the fundamental concepts of online gaming security and why it is crucial for protecting casinos and players in the digital landscape.

• Challenges Posed by AI Technologies: Discover how advancements in generative AI and deepfake technologies are being exploited by fraudsters to infiltrate online gaming platforms.

• Expert Insights: Gain insights from industry experts on current trends, threats, and strategies in online gaming security, including identity verification and fraud prevention measures.

• Best Practices for Casinos: Explore effective strategies that casinos can implement to enhance their security protocols and protect against sophisticated infiltration attempts.

• The Future of Online Gaming Safety: Understand the ongoing battle against fraud in the online gaming industry and what steps can be taken to ensure a safe gaming environment as technology continues to evolve.

Online gaming security has never been bigger, with one recent study from Statista estimating that the industry will reach $29.5 billion this year. That includes revenue showing an annual growth rate of 4.8% through 2030. Technology and innovation are a key part of the industry, but there are also some high-tech headwinds on the horizon as well.

The Rise of AI-Driven Threats

As generative AI and deepfake tech become more popular with fraudsters and underaged players, operators face a much tougher security environment.

Generative AI can easily create new text, images, and more, allowing those with ill intent to gain access to iGaming sites and engage in illegal activities. This underscores the vital importance of enhanced online gaming security measures.

Online casinos are now under growing pressure to strengthen identity verification processes while still maintaining a fast, seamless experience without losing potential customers.

The environment is challenging and seemingly offers competing goals – bringing in more players while remaining ever more vigilant in screening out those trying to use complex technology to bypass the systems a company has in place.

This makes effective online gaming security crucial for operators striving to stay ahead of threats.

Image Credit: Tirachard Kumtanom;/Shutterstock

The War Against Professional Fraudsters

When it comes to online security, not many in the field have more experience than Ofer Friedman. He has spent the last 15 years in the Fintech and Regtech industries, specializing in identity verification. With a strong focus on online gaming security, he works with global A-list enterprises, monitoring fraud and anti-fraud trends, challenges, and technologies.

While iGaming has seen immense growth in recent years, the industry has become a top target for criminals looking to take advantage of these operations.

Some of those crimes have ranged from money laundering to the use of bots in online poker to infiltration from North Korean hackers looking to bring in funds for the regime. The online gaming security implications of these actions are profound.

Online Gaming: A Prime Target

“Gaming has evolved into a top target for fraud, especially professional fraud,” Friedman says. “Because it is a highly prized target, professional fraudsters are willing to invest more resources in employing the latest technology to infiltrate and exploit operators. One would expect gaming companies to arm themselves with the latest defenses because, unlike amateur fraud, professional fraud is far more damaging due to the automation and skill assets that pros can afford.”

“However, gaming companies are challenged by customers who are quick to abandon onboarding at the slightest friction. This encourages operators into a tight budget mentality, and they often tend to ‘do what they must do rather than what they can do.’”

Online gaming faces even more sophisticated infiltration attempts due to the inherent vulnerabilities of remote engagement and the advancements of impersonation and defense-bypassing technologies, Friedman notes.

Operators are often left trying to play “catch up” because of the fast pace of technological innovation. This highlights the necessity for robust online gaming security frameworks.

An Ongoing ‘High-Tech Arms Race’

All that can seem frightening for security experts in the field. Friedman points to a few of the more interesting cases he’s seen recently regarding online gaming security. The most impressive of those are “lazy fraudster platforms,” which can be used to eventually gain access to a site.

“Operating these requires no special knowledge for producing elaborate fakes and bypassing device defenses,” he says. “Moreover, they enable the launch of ongoing, massive attacks that factor in randomly changing elements to avoid detectability based on repetitions.”

The tech behind AI-generated images has become so good that it may be impossible to distinguish between real and fake. New generative AI models “render our senses useless in detecting anomalies,” Friedman notes.

The Scale of the Challenge

Considering these techno-crooks’ efforts, those in the industry may be left wondering what they can actually do to safeguard systems from unsavory actors and keep those underage from creating gaming accounts.

Friedman says the “minefield strategy” may be the most reasonable. This involves putting as many hurdles in front of fraudsters as possible, narrowing their ability to bypass defenses by incorporating as many types of checks as possible.

“Even professional fraudsters cannot always think of every factor or vector,” he says. “This is by no means a new paradigm; it is exactly the way that cyber defense works and identity and access management (IAM) operates. The more mines on the field, the more likely the fraudsters are to step on one they haven’t calculated for. Other than that, this is an ongoing arms race that highlights the critical importance of online gaming security.”

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AI Issues & AI Solutions

While artificial intelligence may be the source of consternation among iGaming security experts, the same technology also offers a chance at prevention – provided the iGaming industry can stay ahead or at least on par with the hackers.

This becomes even more important when it comes to age verification, a critical component of regulated online gaming security.

“Fraud prevention is unsustainable without AI, but not all AI is the same,” Friedman says. “Methodologies count. AI-based fraud detection based on big data learning is already becoming obsolete. Relying on big data samples of fraud assumes that fraud is unchanging, hence if you have lots of samples, you’re good. But fraud does change, and very quickly. Fraud prevention service providers need to change their fundamental methodologies.”

The Need for Advanced Defenses

“History teaches us that consumers will always have the motivation to sidestep the rules. What do they have to lose? However, service and platform providers will always have much higher motivation to comply with regulations, as they risk significant sanctions. In other words, it’s a question of enforceability.”

However, today’s age verification solutions follow the same methodology as identity verification: we don’t rely on self-attesting but request an ID document and selfie for matching and age estimation.

However, players may not be asked to repeat that process every time they log in. Friedman says the immediate solution can come in the form of self-sovereign digital identity credentials, a user-centric approach to digital identity where individuals control their own identity information and how it’s shared.

Instead of relying on a centralized system, players have a wallet that can digitally store credentials such as a driver’s license or other forms of ID.

Image Credit: Burdun Iliya/Shutterstock

Technology-Driven Fraud Strategies

“Identity wallets minimize players’ exposure to non-relevant personal data and enable sharing of that data with less intrusive types of biometrics – mainly a fingerprint,” Friedman says.

The industry is striving to update defenses more than ever before as each month seems to bring a new suspect.

With regulations tightening and digital identities becoming increasingly available, many serious gaming companies have become more motivated to maximize their defenses within the online gaming security framework.

Compliance officers are now more visible than before, and sales departments are more involved to help prevent sign-up bottlenecks and abandonment. Some of the industry’s efforts are paying dividends.

“But no less important, the industry has largely acknowledged that relying on humans in a back office to mitigate fraud does not hold water,” Friedman says. “It’s technology first, and many are getting it right.”

Navigating the Future of Online Gaming Security

The battle rages on, and a few concerns are on the horizon. One involves “grey” market gaming operators that may not necessarily comply with regulators in various jurisdictions around the world. The industry isn’t standardized and interoperable when it comes to fraud prevention and ID verification.

That can prevent some major issues, especially for smaller operators. There are holes in the net, Friedman says, and some bad actors take advantage of that.

Friedman also stresses the major challenge faced by agentic AI in the coming years. This may not even need human operators once it’s created – a digital system that may be a bit reminiscent of the fictional “Skynet” system from the Terminator movies.

“This nascent domain will take both fraud and fraud prevention to the next phase in evolution,” he says. “In the near future, fraud will not necessarily be committed by humans!”

Title Image Credit: Thapana_Studio/Shutterstock

FAQ: The Battle for Online Gaming Security