81% Figure Highlights the Growing Fraud Prevention Challenge for Gambling Operators

Every extra verification step is a chance for a customer to abandon sign-up or switch to a competitor.

In the second half of our conversation with Sean Britt of LexisNexis Risk Solutions, we look at how operators are squaring tighter fraud controls with growth, and where the fraud-prevention product roadmap heads next.

The 81% figure, and where it actually bites

It's tempting to read "81% will abandon over friction" as one clean statistic. It isn't. 

"The report measures two related but different things," Britt clarifies in an exclusive interview with SportsBoom.us. 

"Eighty-one per cent (81%) said moderate friction was sufficient to cause abandonment of the registration process. Sixteen per cent (16%) cited low friction, and 2% cited high friction. In a separate question about where excessive friction causes customers to switch platforms, 72% selected both onboarding and withdrawal, 19% selected withdrawal only and 10% selected onboarding only. The correct interpretation is that moderate registration friction is highly sensitive, while competitive switching is usually a two-endpoint problem. Among respondents who selected only one stage, withdrawal was nearly twice as commonly selected as onboarding, 19% versus 10%, but the dominant answer was both."

Tech problem, policy problem, or both

Britt doesn't let operators off the hook by calling this purely a technology question. 

"It is both," he says. 

"Technology determines whether controls can operate passively, connect signals and make real-time decisions, while Policy determines whom to challenge, when to challenge them and what evidence is sufficient. Applying the strongest verification to every player creates unnecessary abandonment. Applying weak controls universally allows organized networks to scale. The operating objective should be passive assessment for most customers, selective step-up verification for uncertain cases, and intervention or blocking for high-risk cases."

On the ground, operators are leaning on a mix of tools to manage the regulatory-friction balance: compliance automation (61%), streamlining KYC (58%), customer support during KYC (53%), compliance specialists (49%), alternative verification methods (32%) and regulatory technology (30%).

Is anyone actually nailing the balance? Britt is careful not to crown a winner. 

"As far as is anyone getting this right, that is not a question that a provider can answer because that balance and the desired outcome is going to vary by operator and its risk posture," he added. 

But he does sketch what a workable version looks like operationally: "the components of a balanced workflow need to include combining device, behavioral and email intelligence at web sign-up. Signals included behavior mismatch, suspicious email domains, short-lived identity data, weak historical linkage, account-age and location discrepancies, devices linked to multiple accounts, and IP/geolocation inconsistencies. Risky accounts were flagged or blocked, while trusted users continued without interruption."

The case study behind this research specifically flagged behaviour mismatch, devices connected to multiple accounts, bulk promotion abuse, repeated sign-ups, payment-testing behaviour and transaction anomalies as signals that go beyond what basic identity verification alone can catch.