- US digital fraud attempts went up by 261.9% in one year.
LAS VEGAS – The COVID-19 pandemic has allowed the sports betting market to grow exponentially. Since millions of American citizens have remained inside their house under lockdown, many of them have found sports betting to be a welcome and entertaining distraction.
The explosion of profitable popularity in the sports betting market has made it ripe for opportunistic fraudsters.
The attempt rate for United States digital fraud went up by 261.9% in one year according to a Wednesday report released by TransUnion. The same report found the industry to currently be the most susceptible to fraud attempts.
Profit Draws Predators
Sports betting fraud attempts went up by 114% between the second quarter of 2020 to the second quarter of 2021.
“Fraudsters tend to seek out industries that may be seeing an immense growth in transactions. This quarter, as countries began to open up more from their COVID-19 lockdowns and travel and other leisure activities became more mainstream, fraudsters clearly made this industry a top target. The immense growth in gaming fraud also can be attributed to the shifts in focus of fraudsters as this growing market becomes a larger target,” said Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion.
The sports betting industry is at an all time high in terms of both profitability and popularity.
An AGA report shows that in the first half of 2021, sportsbooks broke $1.8 billion in revenue, more than the entirety of sports betting revenue generated in 2020 ($1.5 billion).
Will The Fraud Attempts Grow With The Industry?
Profit loss from fraud is often factored into a businesses’ budget, but protecting the safety of the consumer will have to become more of a priority if these providers want to maintain their growth.
“As fraudsters continue to target consumers, it’s incumbent on businesses to do all that they can to ensure their customers have an appropriate level of security to trust their transaction is safe all while having a friction-right experience to avoid shopping cart abandonment," said Melissa Gaddis, senior director of customer success, Global Fraud Solutions at TransUnion.
While online gambling has been around, sports betting was only made legal less than five years ago, so the industry is still very young. As it continues to grow, platform providers will be able to better refine how they operate, and consumers will have opportunities to provide feedback that will influence the direction the industry takes.