Even in 2025, sports betting fraud is an ever-present threat that can undermine the integrity of your operations and erode player trust. Where there are advancements in technology, there are highly adaptive fraudsters who exploit vulnerabilities in betting platforms to manipulate odds, engage in bonus abuse, and execute sophisticated syndicate betting schemes.
For bookmakers, the challenge is twofold: protecting their business from financial losses while ensuring a fair and transparent betting experience for customers.
In this article, we’ll explore the most common types of online gambling fraud, the latest fraud detection techniques, and how leveraging high-quality data solutions like Oddsmatrix can strengthen your sportsbook’s defences against bad actors.
Broadly, gambling fraud refers to any deceptive or illegal activity aimed at manipulating betting outcomes, exploiting platform vulnerabilities, or unfairly profiting from sportsbook operations.
More specifically, in the online betting industry, fraudsters leverage technology, loopholes, and even insider knowledge to gain an unfair advantage. These fraudulent activities not only cause financial losses for bookmakers but also damage the credibility of betting platforms, leading to regulatory scrutiny and a decline in customer trust.
Online casino fraud can be broken down into a few categories:
The only way to combat these threats is by implemeting robust fraud detection systems. Reliable data providers like Oddsmatrix offer advanced tools to detect suspicious activity and protect sportsbooks from fraudulent behaviour.
Online gambling fraud comes in many forms, each targeting different vulnerabilities in sportsbook operations: identity and payment fraud, bonus abuse, match-fixing and insider betting, and odds manipulation and arbitrage abuse. For simplicity’s sake, this article will cover the most common ones and will not delve into the technical details.
The first item on the list is identity and payment fraud. This works like in any other industry – fraudsters use stolen identities to create accounts, deposit funds using stolen credit cards, and withdraw winnings before chargebacks occur. Take credit card fraud, where criminals place bets using compromised card details, leaving the bookmaker to deal with chargebacks when the legitimate cardholder disputes the transaction.
A close relative of identity fraud is account takeover fraud. Cybercriminals, through various social engineering tactics (mainly phishing), gain access to the bettors’ account. Then, the hackers simply withdraw funds or place high-stakes bets using the stolen credentials.
A recent report shows that phishing attacks are the most common form of gambling fraud, surging over 70% from 2022 to November 2024 alone. To combat phishing, many gambling operators launch cyberattack awareness campaigns, advising customers to not share their passwords with third parties or click on suspicious links. But beyond these campaigns, gambling operators can take steps to prevent cybercriminals from exploiting platform vulnerabilities in the first place – integrating two-step authentication processes, or, better yet, using risk management tools to detect suspicious activity.
Bonuses, free spins, and other related initiatives are a great way to both attract new customers and retain existing ones. However, these initiatives also open the platform to third parties looking to abuse these bonuses for personal gain.
Which is why bonus abuse is one of the most common types of fraud in online gambling. All it boils down to is bettors exploiting promotional offers to generate risk-free profits at the expense of the sportsbook by way of multi-accounting. This is where a single user creates multiple accounts using fake identities, VPNs, or stolen credentials to claim the same welcome bonus, free bets, or deposit match repeatedly.
Some fraudsters even take the fraud to the next level by operating bonus abuse rings, coordinating groups of individuals to maximize profits from promotions. Short and long term, bonus abuse leads to inflated marketing costs, skewed user acquisition metrics, and direct financial losses for bookmakers.
There is also arbitrage betting with free bets – fraudsters use their bonuses to place opposite wagers on different sportsbooks, guaranteeing a profit regardless of the outcome. Some abuse tactics are more subtle, such as low-risk wagering, where players meet bonus wagering requirements by betting only on minimal-risk markets. Over time, these practices drain promotional budgets and reduce the effectiveness of loyalty programs. Ultimately, genuine players who could benefit from these promotions are the likeliest to be affected.
To prevent bonus abuse, sportsbooks employ advanced fraud detection tools that can identify suspicious betting patterns and multi-accounting behaviours.
For instance, Oddsmatrix’s real-time player monitoring system analyzes account activity, identifying linked accounts based on IP addresses and betting behaviours. Users who attempt to exploit the same promotions multiple times are quickly identified, stopping the fraud before it degenerates into significant financial losses for the bookmaker.
Beyond prevention, Oddsmatrix’s automated reporting and analytics tools help bookmakers identify patterns in historical bonus abuse cases, allowing them to refine their promotional strategies and minimize future risks. Also, with AI-driven fraud detection and cross-platform monitoring, sportsbooks can rest easy that their bonus programs attract genuine customers rather than fraudsters, making promotions more sustainable and effective.
Match-fixing is arguably the most damaging form of gambling fraud, affecting both sportsbooks and the integrity of the sporting events themselves. In these betting scams, players, referees, or other insiders manipulate the outcome of a match to ensure a pre-determined result.
Take the 2013 Europol investigation, which uncovered hundreds of fixed matches across Europe, including Champions League football games, showing that even as far back as the early 2010s, when fraud tactics were not as sophisticated as they are today, match fixing was a damaging phenomenon.
When fraudsters place large bets on rigged games, bookmakers suffer financial losses and may face regulatory fines if they fail to detect and prevent such fraudulent activity. Advanced data analytics and real-time monitoring, such as those provided by Oddsmatrix, are essential for detecting irregular betting patterns and preventing payouts on suspicious bets.
Due to prevalence, convenience and a perceived (not to mention false) sense of anonymity, online sportsbooks are often targeted by criminals looking to launder illicit funds. In simple terms, fraudsters deposit large sums of money, place a series of low-risk bets, and then withdraw the remaining balance as “clean” winnings.
A concrete example of this occurred in the UK gambling sector, where authorities uncovered criminal networks using betting sites to launder drug money. Money laundering schemes expose bookmakers to severe legal and financial consequences, including hefty fines for failing to comply with anti-money laundering (AML) regulations.
Syndicate betting and collusion are advanced fraud tactics where groups of bettors work together to manipulate odds and exploit sportsbook vulnerabilities to guarantee profits. In syndicate betting, highly organized groups place coordinated bets across multiple accounts to bypass betting limits, exploit arbitrage opportunities, or take advantage of inside information. Some syndicates even employ AI-driven betting bots that detect and act on odds inefficiencies before bookmakers can adjust their lines.
While there are multiple syndicate betting tactics, the most damaging is line manipulation. First, a group of bettors repeatedly wagers on one outcome, causing sportsbooks to adjust their odds. Then, the syndicate places much larger bets on the opposing outcome at artificially inflated odds, securing a guaranteed profit.
Another form of syndicate betting matched betting collusion, where multiple accounts work together to hedge bets in a coordinated way, minimizing risk and maximizing bonus exploitation. This can be particularly damaging when combined with multi-accounting and VPNs, as bookmakers will lead an uphill battle trying to trace the source of the fraud and take action.
To prevent syndicate betting and collusion, sportsbooks need real-time monitoring and cross-platform data analysis—which is exactly what OddsMatrix provides. Oddsmatrix’s AI-driven betting pattern recognition automatically detects accounts that exhibit coordinated betting behaviour, flagging unusual activity across different markets, odds movements, and bet sizes. Bookmakers can thus quickly identify and take action against syndicates before they can manipulate odds or exploit market inefficiencies.
Also worth mentioning is Oddsmatrix’s multi-account detection system. Using this system, sportsbooks identify linked accounts based on shared IP addresses, device fingerprints, and transaction similarities.
This feature is especially effective against collusion-based strategies that rely on multiple accounts to hedge bets or bypass wagering limits. OddsMatrix groups suspicious accounts and assigns risk scores. Sportsbooks can then enforce laser-targeted restrictions, such as blocking specific markets, lowering betting limits, or even banning users involved in coordinated activities.
Finally, Oddsmatrix’s real-time risk management tools as a whole enable sportsbooks to dynamically adjust betting limits, odds movements, and market exposure based on detected risks. Overall, if syndicate betting behaviour is identified in a specific market, bookmakers can instantly limit bet sizes, freeze odds adjustments, or delay payouts to further investigate.
Chargeback fraud, also known as friendly fraud, occurs when a bettor deposits money, places bets, and later disputes the transaction with their bank, claiming it was unauthorized. The end game for the fraudster is to recover their initial investment while pocketing the winnings.
Chageback/friendly fraud is particularly challenging to combat, as legitimate users can sometimes file chargebacks in good faith. Maintaining a strong payment verification system goes a long way to disputing chargebacks effectively and minimizing losses from this fraudulent practice.
Preventing online gambling fraud starts with implementing fundamental security practices that safeguard both sportsbooks and their customers.
As a leading provider of real-time sports betting data and risk management tools, Oddsmatrix helps sportsbooks detect fraudulent activities before they impact business operations. With automated risk alerts, sportsbooks receive real-time notifications about suspicious betting behaviours, allowing immediate action against fraudsters.
Further, one of the key advantages of Oddsmatrix’s risk management system is its ability to analyze betting trends across multiple sportsbooks simultaneously. Oddsmatrix’s data-driven approach helps bookmakers identify and counteract these tactics, ensuring competitive odds with minimal exposure to high-risk bets.
By combining best practices with Oddsmatrix’s cutting-edge fraud prevention tools, sportsbooks can build a secure, data-driven betting environment that safeguards both their business and their customers. As fraud continues to evolve, adopting a proactive, technology-driven approach is the key to staying ahead of the threat and maintaining a profitable, trustworthy sportsbook operation.
Contact us and let’s see what we can do to help you become one of the largest betting companies out there.
