As iGaming companies continue to be approved to operate in New Jersey gambling, fraudulent activity will continue to be prevalent online, affecting both companies and customers.
New Jersey is one of very few states that has legalized real money online casinos.
The Garden State was one of the first three states to legalize iGaming and some have estimated the market could be worth $8.4 billion in gross gaming revenue (GGR) by 2025.
TopNJCasinos.com checked in with one new company here in New Jersey to see how to combat and prevent fraud.
SEON Enters N.J. iGaming Picture
Back on May 18, SEON announced it had submitted an iGaming permit application in New Jersey, allowing the England-based company to provide services to online gaming operators.
SEON - which also has an office in Austin, Texas - is a computer software company that prevents multi-accounting, affiliate and chargeback fraud in the iGaming sector.
Some iGaming businesses attempt to entice first-time customers with rich bonuses, which heightens the risk of bonus fraud.
The company integrates its platform with iGaming companies, enacting real-time customer verification and consumer affordability checks to help mitigate these risks on New Jersey apps. Its platform also can calculate user spend rates, create alerts for unusually large bets and block actions that might make an iGaming company vulnerable to fines.
Jimmy Fong, the chief commercial officer at SEON, is a young veteran in the fraud detection space. The last three leading fraud and payments startups he has been involved in have been acquired by Visa, Ingenico and American Express. He’s a regular speaker on disruptive technology in the fintech space and a major advocate of flattening the tech barrier for merchants and financial institutions to fight fraud effectively. A graduate of Edinburgh University, he looks to marry his passion for tech with doing a bit of good in the world.
Q and A with Jimmy Fong
Here is our Q and A with Fong:
TopNJCasinos.com: What are your thoughts on New Jersey’s DGE approved new regulations – which came into effect on June 30 in the wake of the resolution of the DraftKings Sportsbook messenger betting case with New Jersey regulators – that require every online gaming operator to establish multi-factor authentication for their customers?
Fong: Overall, I’d say it’s a good thing. Look, in the last few years, account takeover attacks have become incredibly easy to pull off, so multi-factor authentication as standard must be considered good practice when looking to help protect user accounts. The problem is it’s not a totally fool-proof system.
Fraudsters always look to stay one step ahead, and we’re already beginning to see them shift their sights to the patrons themselves.
Unfortunately, multi-factor authentication codes can be phished, so this approach alone isn’t going to totally eradicate the threat of this form of attack occurring across platforms. In addition, iGaming operators need to ensure they’re constantly reminding users about the risks of online fraud and educating their customers on what represents good security. When combined, the sector has a much better chance of taking on this growing challenge.
TNJC: What changes, if any, do you think need to be made to better regulate the New Jersey iGaming industry?
Fong: It’s hard to say, but I think we will begin to see new measures introduced soon. In general, regulation tends to move from one country to the other. Of course, the iGaming sector is still relatively new in the U.S., but more mature markets exist in different countries, such as the UK. Therefore, I wouldn’t be too surprised if we begin seeing regulations akin to those used in Britain brought over and implemented within the American market soon.
TNJC: Tell us about SEON, how it works, and the benefits companies experience from your fraud detection solutions?
Fong: As a company, we strive to help online businesses reduce the cost, time and challenges associated with online fraud. Our revolutionary AI machine-learning fraud prevention software simplifies fraud management and makes it accessible to companies of all sizes. That’s why we’re the go-to fraud prevention solution for industry titans like Revolut, Nubank and Sorare, as well as small eCommerce startups and online businesses.
In relation to iGaming, our solution can be integrated into existing fraud prevention stacks to allow businesses to enact real-time customer verification and consumer affordability checks. As such, our solution helps to limit things like multi-account attacks, account takeovers and bonus abuse, while promoting more responsible gambling practices amongst users.
What Types of Fraud Are Most Common
TNJC: What are some of the most common online gaming fraudulent activities you’re seeing in New Jersey today?
Fong: The types of fraud affecting the New Jersey iGaming sector aren’t different to the types of fraud affecting other iGaming markets around the world. Things like multi-account, account takeovers and bonus abuse attacks remain alarmingly popular.
Right now, given how young the sector is, we’re seeing lots of companies run promotions to help establish loyal customer bases. I think that’s led to bonus abuse becoming a particularly severe problem.
Likewise, money laundering remains a huge issue across the iGaming sector. Now more than ever, iGaming businesses need to know exactly who they are dealing with when accepting money online, or in person. If they don’t, then it’s easy to see how money could be laundered through an iGaming provider, which could lead to legal troubles further down the line and, more broadly, would have the potential to tar the name of an entire sector.
Thankfully, effective online fraud prevention systems, such as the one we offer at SEON, are able to minimize risk and combat online fraud. Our solution can detect and stop iGaming fraud in its tracks, mitigating the problem before it’s even occurred. What’s more, the highly flexible and adaptable system can be tailored over time, to help iGaming providers deal with an ever-changing regulatory landscape and the rising volume of fraudulent activities.