Ultimate Guide to Localized Fraud Prevention in iGaming

Fraud in iGaming costs €27.4 billion annually, with a fraud rate of 3.5%. This guide explains how operators can protect their platforms while keeping players happy, especially in Malta's iGaming market. Here's what you'll learn:

• What is localized fraud prevention? Tailoring fraud detection to match local payment methods, regulations, and player behavior.

• Why does it matter? Reduces false positives, improves player retention, and ensures compliance with strict rules like those from the Malta Gaming Authority (MGA).

• Key tools and methods: AI, machine learning, biometric authentication, and anti-money laundering (AML) compliance.

• Country-specific strategies: Malta's unique risks include bonus abuse (69.9% of fraud incidents), payment fraud, and account takeovers.

• Payment localization: Smooth and secure payment systems in euros (€), mobile-friendly interfaces, and local preferences like SEPA transfers.

Quick Facts

• 49% of players value fast, secure payments.

• Fraud detection systems can reduce suspicious transactions by 30–40%.

• Bonus abuse and chargebacks are major threats in Malta, costing operators €207 per €100 in chargebacks.

Key takeaway: Adopting AI-powered fraud detection, localised payment systems, and strict compliance measures not only protects your platform but also improves player trust and retention.

Accelerating Profitable Play: Preventing Bonus Abuse while ensuring Responsible Gambling

Key Technologies and Methods for Fraud Detection

Fraud detection in the iGaming industry depends on advanced technologies capable of processing massive amounts of data while keeping up with ever-changing threats. These systems are designed to adapt to local behaviours and payment trends, helping operators distinguish between genuine players and fraudulent activities. On top of these tech-driven solutions, biometric methods add an extra layer of security.

AI and Machine Learning in Fraud Detection

Artificial intelligence (AI) and machine learning (ML) have completely changed the game when it comes to spotting and stopping fraud in iGaming. These tools can sift through enormous datasets to spot suspicious patterns and behaviours in real time, far outpacing the capabilities of human analysts.

At the heart of fraud detection is real-time pattern recognition. AI systems continuously monitor player behaviour, flagging anomalies like unexpected spikes in performance, unusual login locations, or irregular transaction habits.

The results speak for themselves. One online casino reported a 30% drop in fraudulent transactions after adopting an AI-powered fraud detection system. These systems also help operators comply with Malta Gaming Authority (MGA) standards, showing how localisation can improve effectiveness. AI-driven tools for detecting money laundering have also reduced suspicious transaction volumes by as much as 40%.

Machine learning is especially effective at predicting potential fraud by analysing historical data. It can uncover complex schemes, such as collusion in online poker, by studying betting patterns and hand histories. It can also detect unusual betting spikes that might indicate match-fixing. For example, a major poker platform saw a 30% decrease in collusion-related incidents after introducing AI-based fraud detection.

"AI's role in this process is crucial. It enables a proactive approach to fraud detection, allowing operators to respond swiftly and effectively to potential threats, safeguarding the platform's integrity and trustworthiness and enhancing the overall user experience by ensuring a secure and fair gaming environment."

• Hlib Kuznietsov, Data Scientist Tech Lead at GR8 Tech

Modern AI systems also employ zero-trust principles, requiring users to verify their identity multiple times during a session. These systems can automatically react to threats, such as temporarily locking accounts that show suspicious activity, while continuously learning and evolving to stay ahead of fraud tactics.

Biometric Authentication

Biometric authentication bolsters iGaming security by using unique physical and behavioural traits to verify identities. This technology tackles multiple challenges, including fraud prevention, underage gambling, and regulatory compliance.

Nearly 50% of consumers say they frequently use biometric authentication for mobile apps, making it a familiar and user-friendly option for iGaming operators. Biometric methods such as facial recognition, fingerprint scanning, voice recognition, and behavioural biometrics can be used for secure logins, player verification, fraud monitoring, and payment authorisation. For operators in Malta, biometric authentication not only enhances security but also aligns with MGA requirements, all while improving the user experience.

Accuracy and fairness are key for biometric systems. Aware’s biometric technology, for instance, achieves over 99% accuracy in verifying people of all races and ethnicities, as confirmed by NIST tests.

"Biometrics are more user-friendly and secure than traditional passwords, or even one-time link verification, according to what online users themselves stated in a survey we recently conducted. The technology captures unique and exclusive characteristics of each bettor and ensures a frictionless experience for the bettor, increasing their confidence in the service."

• Mario Cesar Santos, Global VP of Solutions at Aware

However, implementing biometric systems requires strict data security measures. Operators must encrypt and securely store biometric data, especially when operating under GDPR regulations in Europe. Seamless integration across platforms is also essential to maintain a consistent and smooth user experience.

Digital Identity Verification and AML Compliance

To complement advanced fraud detection technologies, robust digital identity verification and anti-money laundering (AML) compliance systems are essential. This is especially true in an industry characterised by high transaction volumes, remote user registrations, and a global customer base.

Know Your Customer (KYC) protocols serve as the first line of defence. By verifying players' identities, KYC processes help prevent fraud, underage gambling, and financial crimes. For Malta-licensed operators, these processes must meet MGA standards and align with broader EU regulations.

KYC systems often include several layers of verification, such as screening against politically exposed persons (PEP) and sanctions lists, real-time account monitoring, transaction analysis, and the use of machine learning to detect fraud. As regulatory requirements evolve, operators face increasing pressure to strengthen KYC and AML measures.

AML compliance must adhere to frameworks like FATF, EU 6AMLD, US FinCEN, and UKGC guidelines. For operators in Malta, this means navigating both MGA rules and EU directives. Transaction monitoring plays a critical role in AML efforts, using AI to detect suspicious activities like layering - where funds are moved across multiple accounts to obscure their origin - and flagging unusual transactions for further review.

Fraud in online gambling costs the industry over €27.4 billion annually, with a fraud rate of about 3.5%. Strong digital identity verification systems are vital for protecting both operators and legitimate players.

The challenge lies in balancing security with usability. Low-friction KYC solutions that adapt to shifting regulations and emerging threats are key to maintaining compliance while ensuring players enjoy a seamless gaming experience.

Country-Specific Fraud Risk Models

Fraud patterns vary significantly across regions, and a one-size-fits-all approach simply doesn’t work. Malta, as a leading iGaming hub, faces its own set of unique challenges that call for tailored solutions. Between 2019 and 2021, global fraud in iGaming surged by 68.6%. This section takes a closer look at Malta’s specific fraud risks and the strategies needed to address them.

Understanding Local Fraud Trends and Regulations

Malta’s €1.5 billion iGaming industry is a prime target for fraudsters exploiting market-specific vulnerabilities. The most concerning threats in this space include virtual financial assets fraud, manipulation of cash payments, prepaid card abuse, foreign criminal infiltration of licensed institutions, and unlicensed operators acting illegally. These risks are compounded by cybercriminals leveraging AI to outsmart traditional defences.

To combat these threats, the Malta Gaming Authority (MGA) enforces strict Anti-Money Laundering (AML) rules and Customer Due Diligence (CDD) requirements. The Financial Intelligence Analysis Unit (FIAU) serves as the primary regulator, with the MGA acting as a supervisory agent for remote gaming. Common types of fraud affecting Maltese operators include payment fraud, account takeovers, bonus abuse (also known as gnoming), chip dumping, and affiliate fraud. Bonus abuse alone accounts for a staggering 69.9% of fraud incidents. On top of that, for every €100 in chargebacks, operators end up paying €207 when fees and refunds are factored in.

The regulatory framework in Malta requires operators to stay agile. While the remote gaming sector has strengthened its AML and counter-terrorism financing measures, it still faces higher risks compared to industries like traditional banking, tax advisory, and real estate. This elevated risk profile calls for constant vigilance and advanced prevention strategies.

Building Regional Risk Profiles

Creating effective regional risk profiles involves pulling together data from multiple sources to build a detailed picture of potential threats. For the Maltese market, operators need to analyse transaction patterns, player behaviours, and local payment preferences to develop accurate fraud detection models.

For example, analysing SEPA transfers in Malta requires real-time monitoring to catch anomalies. Operators can also use player segmentation to differentiate genuine users from potential fraudsters. This involves examining email addresses for domain validity, checking for social media connections, and using device intelligence to analyse hardware and software configurations. Coupled with location monitoring (e.g., VPN detection), these tools can help unmask fraudulent activities.

Behavioural analytics play a key role here too. By studying login times, gameplay habits, and betting patterns, operators can establish what normal activity looks like for legitimate players. Any deviations from these norms can trigger an alert for further investigation.

However, operators must strike a balance between security and user experience. Fraud detection systems need to be sophisticated enough to catch bad actors without frustrating legitimate users with false positives. With fraud increasing by 30% annually, scalable systems that can adapt to new threats are more important than ever.

Adapting Fraud Prevention for the Maltese Market

To tackle fraud effectively in Malta, operators need a multi-layered approach that aligns with local regulations while maintaining operational efficiency. A good starting point is implementing risk-based authentication (RBA) by assessing platform vulnerabilities within Malta’s regulatory framework. From there, operators should develop a Customer Acceptance Policy and formalise AML/CFT procedures to meet FIAU requirements.

Assigning a Money Laundering Reporting Officer (MLRO) is another critical step to ensure ongoing compliance with regulations. Regular internal audits and compliance reviews help operators stay on top of evolving rules.

Real-time monitoring systems are essential in Malta’s iGaming sector. These systems need to detect and block fraudulent transactions instantly while allowing legitimate payments to proceed smoothly. AI-powered tools can further enhance fraud detection by learning to identify new patterns and adapting to emerging threats.

Payment methods also demand special attention. Credit card processing should incorporate 3D Secure 2.0 along with fraud detection capabilities. E-wallets should use API-based authentication and session tracking to prevent unauthorised access. As cryptocurrency becomes more popular in Malta, blockchain validation and address verification are vital for secure transactions.

The regulatory environment in iGaming is unforgiving. For instance, the UK Gambling Commission issued a record $23.81 million fine in 2023 for AML and social responsibility failures. Maltese operators can learn from such cases to avoid similar penalties.

Collaboration among operators can also strengthen fraud prevention efforts. Sharing anonymised fraud data allows the industry to stay ahead of new threats while maintaining competitive advantages. This approach is particularly valuable in Malta’s concentrated gaming market, where a threat targeting one operator could easily spread to others.

To protect their operations, operators must integrate these risk profiles into actionable strategies. Success hinges on balancing compliance, fraud prevention, user experience, and efficiency. Those who can manage this balance will be well-positioned to thrive in Malta’s competitive iGaming landscape.

Payment Localisation and Secure Processing in Malta

Malta’s iGaming scene presents operators with the challenge of delivering seamless and secure payment experiences. With 70% of Maltese residents now opting for electronic payments over traditional methods, creating a localised payment system isn’t just about ticking regulatory boxes - it’s about driving player satisfaction and boosting conversion rates. Let’s break down the key strategies for achieving this balance.

Best Practices for Payment Localisation

To create a payment experience that resonates with players in Malta, it’s crucial to understand how they prefer to pay. In recent years, digital payments have gained immense popularity, with cash transactions now favoured by just 13% of residents. This shift opens doors for operators who can provide smooth and intuitive digital payment options.

Currency and formatting are foundational elements. Payment amounts must be displayed in euros (€), adhering to Malta’s conventions - commas for thousands (e.g., €1,000.00) and full stops for decimals. Avoiding foreign currencies wherever possible helps streamline the process and minimise friction.

The choice of payment methods should reflect local trends. Visa, Mastercard, digital wallets, and online bank transfers are preferred among Maltese players, particularly for larger transactions. Additionally, mobile contactless payments are becoming increasingly popular, especially among younger users.

Mobile optimisation is non-negotiable. With Malta’s mobile-first culture, payment interfaces must be smartphone-friendly. This means optimising forms, ensuring touch-friendly navigation, and integrating mobile wallets for quick and hassle-free checkouts.

Language localisation goes beyond simple translation. Payment interfaces should use familiar terms and follow local conventions for dates (DD/MM/YYYY), time (24-hour format), and numbers. Providing support in Maltese or English ensures clarity and reduces the risk of drop-offs due to confusion.

Generational preferences also play a role. Younger players often lean towards fintech services and mobile payments, while older users may still prefer traditional card transactions. Offering a variety of options ensures no demographic feels excluded, while keeping interfaces clean and user-friendly.

Once payment practices are tailored to local preferences, the next step is ensuring compliance with Malta’s regulatory framework.

Compliance with Maltese Standards

Malta’s iGaming regulations are stringent, requiring operators to align with guidelines from the Malta Gaming Authority (MGA), GDPR, anti-money laundering laws, and local financial rules.

KYC (Know Your Customer) verification is a cornerstone of compliance. Operators must validate player identities through real-time document checks and biometric verification. For smaller deposits, basic verification suffices, while larger amounts or unusual patterns trigger enhanced checks.

Daily transaction monitoring is essential for detecting suspicious activities and meeting reporting obligations. Advanced systems, often powered by AI, can analyse payment patterns in real time while generating the necessary reports for quarterly filings.

GDPR compliance adds another layer of complexity. Operators must audit their systems to track how personal data is collected, processed, and stored during transactions. Staff training on data protection and breach protocols is essential, and appointing a Data Protection Officer (DPO) is advisable for those handling large volumes of sensitive data.

Operators are also required to maintain detailed records of all transactions, including failed payments, chargebacks, and fraud prevention measures. These records not only support compliance but also provide evidence during audits.

Integrating Fraud Prevention into Payment Flows

To ensure secure transactions, operators must weave fraud prevention directly into the payment process. Effective systems protect against fraud without disrupting legitimate players, relying on measures tailored to local payment behaviours and patterns.

Behavioural analytics and device fingerprinting are key tools. Analysing player habits - like login times, typical payment amounts, and gaming activity - helps flag anomalies that may indicate fraud. For example, detecting multiple logins from different devices in a short time frame could suggest collusion.

Real-time risk scoring evaluates each transaction as it happens, considering factors like payment method, amount, and player history. Low-risk payments proceed smoothly, while higher-risk ones may require additional verification. The challenge lies in fine-tuning these systems to address Malta’s specific fraud patterns without frustrating genuine players.

Each payment method also requires tailored security. For instance, credit card transactions should include 3D Secure 2.0 authentication, while e-wallets benefit from API-based authentication and session tracking to prevent unauthorised access.

In February 2025, PowerPlay, a Canadian operator, adopted Fluid’s AI-powered cashier technology to improve its payment systems. Dean Serrao, CEO of PowerPlay, remarked, “The integration would provide players with a more intuitive and localized payment experience, making deposits faster and smoother, while also enhancing operational efficiency.” (Source: Fluidpayments.io, May 14, 2025)

Providing step-by-step payment guidance helps reduce errors that might trigger fraud alerts. Clear instructions, progress indicators, and helpful error messages ensure players can navigate the payment process smoothly, while security measures work discreetly in the background. This approach is particularly effective for Malta’s diverse player base, which includes both local and international users with varying levels of tech familiarity.

Fraud prevention systems must remain flexible. As Malta’s regulatory landscape evolves and fraud tactics change, operators need adaptable solutions that balance security, compliance, and user experience. This agility is critical for staying competitive in Malta’s fast-paced iGaming market.

Advanced Fraud Prevention Platforms: The Role of Fluid

Today's iGaming operators face the challenge of balancing advanced fraud prevention with seamless player experiences, especially in diverse markets like Malta. Fluid steps in to replace outdated, rigid systems with AI-driven, localised security solutions. By combining personalised payment journeys with robust fraud detection, Fluid helps operators cater to Malta's unique player base while maintaining high security standards. Let’s dive into how Fluid’s tools create secure, localised, and user-friendly payment environments.

AI-Powered User Behaviour Analytics

Fluid’s AI engine continuously monitors player behaviour to detect fraud in real time. By analysing various data points, the system builds precise risk profiles for both transactions and user sessions, flagging anything unusual.

For example, Fluid tracks betting habits, login patterns, gaming speeds, and device usage to identify anomalies:

Fluid’s transaction monitoring goes deeper, analysing transaction size, timing, account activity, and location data to spot fraudulent behaviour. This layered approach ensures that suspicious activities are caught quickly without inconveniencing genuine users.

Thanks to real-time risk assessment, Fluid dynamically adjusts security measures based on the perceived threat level. Low-risk players enjoy smooth, frictionless experiences, while higher-risk activities are scrutinised appropriately. Additionally, the platform’s device-native biometric authentication adds an extra layer of security that’s tough for fraudsters to bypass but remains convenient for legitimate players.

Brand Integration and Localisation with Fluid

Fluid seamlessly integrates with operators’ branding, ensuring a consistent payment experience while enhancing security. Instead of generic iframes, operators can maintain their unique identity across the payment journey.

For Malta’s iGaming market, localisation is a key strength. Fluid handles Euro transactions with precision, adheres to Malta’s preferred formats, and supports local payment methods. It also offers both English and Maltese language options, catering effectively to the local audience.

Fluid also aligns with Malta Gaming Authority (MGA) regulations, automating the generation of required reports while ensuring GDPR compliance through built-in data protection measures.

This approach hasn’t gone unnoticed. David Hodkinson, founder of Xace, remarked:

"As a financial institution deeply rooted in igaming, Xace recognises the immense potential of Fluid to revolutionise payment journeys for operators. Their technology delivers measurable impact, and we're proud to be part of their journey."

Eric Ames, CEO of Spike Up Media, added:

"At Spike Up Media, we're passionate about working with innovative companies that drive value for igaming operators, and Fluid fits that mould perfectly. Their unique ability to optimise the payment journey through intelligence and personalisation is game-changing for the industry. We're excited to partner with them and help amplify their success."

Optimised User Flows to Reduce Fraud

Fluid goes beyond fraud prevention by enhancing the overall payment experience. The platform recognises that security measures should support, not hinder, user satisfaction. It addresses common issues like complicated authentication, limited payment options, technical delays, and security concerns - all of which can lead to transaction abandonment.

By providing real-time insights, Fluid gives operators a clearer picture of payment performance. Metrics like conversion rates, deposit frequency, transaction success rates, and session lengths help identify areas for improvement. This ensures that fraud prevention measures don’t unintentionally create friction for genuine users.

Fluid’s intelligent payment routing directs transactions through the most suitable channels, considering factors like risk assessment, payment method, and local regulations. This reduces false positives and increases approval rates for legitimate transactions.

The platform’s mobile-first design is particularly suited to Malta’s tech-savvy gaming audience. With touch-friendly interfaces and streamlined mobile payment flows, Fluid ensures that security measures don’t interfere with the gaming experience many Maltese players prefer.

Clear instructions and progress indicators guide users through the payment process without sacrificing security, while machine learning continuously refines fraud detection. Over time, Fluid becomes more effective, delivering both stronger protection and smoother user experiences as it processes more transactions.

Conclusion

Fraud prevention tailored to local needs has become a must-have for iGaming operators striving to succeed in today’s competitive market. With fraud increasing by 30% every year and each €100 in chargebacks costing operators €207 when fees and refunds are factored in, robust security measures are no longer optional - they’re essential for survival.

Modern AI solutions are transforming the way operators tackle fraud. These tools reduce unnecessary false positives, protect profit margins, and improve the player experience. By adopting real-time monitoring systems, operators can achieve profit boosts of 10–15% while ensuring smoother gameplay.

However, technology alone isn’t enough. Regulatory compliance is the backbone of trust in the iGaming industry. For Maltese operators, meeting Malta Gaming Authority requirements is non-negotiable. This includes appointing a Money Laundering Reporting Officer (MLRO), conducting thorough business risk assessments, and maintaining robust KYC verification processes. Advanced platforms help by automating compliance tasks, cutting manual review times by 90% and reducing resource use by 40%.

Getting localisation right is another critical factor. From formatting Euro transactions correctly (e.g., €1,000.00) to using British English conventions and offering local payment options like SEPA transfers, these small but crucial details build trust and reduce player abandonment. Catering to the preferences of specific markets ensures players feel valued and understood.

To stay ahead of increasingly sophisticated fraudsters - who now use tools like VPNs and synthetic identities - operators must combine AI analytics, biometric checks, and tailored risk monitoring. These advanced solutions are evolving rapidly, outpacing the tactics of bad actors. By adopting these technologies, operators can safeguard both their players and their operations, ensuring long-term success.

Localised fraud prevention isn’t just about blocking fraud. It’s about creating a secure, compliant, and enjoyable environment that keeps legitimate players engaged while protecting revenue. For Malta’s vibrant iGaming industry, this balanced approach is the key to sustainable growth and continued player trust.

FAQs

What makes localised fraud prevention unique in the iGaming industry?

Localised Fraud Prevention: A Tailored Approach

Localised fraud prevention takes a targeted approach to tackle the unique challenges, behaviours, and regulations of specific regions. Unlike generic, broad-spectrum strategies, this method aligns itself with the cultural, regulatory, and technological characteristics of each area, resulting in more precise and effective fraud detection.

By harnessing advanced technologies like AI and machine learning, localised systems can pinpoint fraud patterns unique to a region - such as multi-accounting or bonus abuse - which often vary greatly from one market to another. This customised approach not only strengthens security but also fosters trust among players by offering a safer and more tailored gaming experience.

How can iGaming operators in Malta effectively prevent bonus abuse and account takeovers?

To tackle bonus abuse and prevent account takeovers, iGaming operators in Malta can put several strategies into action. One key approach is implementing stronger identity verification methods. This could include biometric checks and comprehensive Know Your Customer (KYC) procedures to block the creation of fake accounts. On top of that, using AI-powered tools to monitor player activity can help spot suspicious behaviour, like multiple logins from different locations or sudden changes in account details.

Another important step is crafting clever bonus systems that are harder to exploit. For instance, operators can require players to meet specific betting thresholds before allowing withdrawals. Enforcing strict rules against multi-account creation and conducting regular compliance audits can also make a big difference. Additionally, educating players about secure password habits and the risks of sharing account details is essential for boosting account security.

By putting these measures in place, operators can better safeguard their platforms and offer a more secure gaming experience for everyone.

How can iGaming operators stay compliant with local and international regulations while using advanced fraud detection tools?

To meet both local and international regulatory standards, iGaming operators need to take a structured and forward-thinking approach. A good starting point is to establish strong KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols. These steps are essential for verifying player identities and identifying unusual activities, ensuring adherence to Malta's regulatory framework as well as global compliance requirements.

In addition, operators can benefit from using AI-driven fraud detection tools to track transactions and spot irregular player behaviour. Conducting regular audits and updating systems is key to keeping up with changing regulations and maintaining robust security measures. Staying updated on local rules, like those outlined by the Malta Gaming Authority (MGA), while also complying with international standards, helps create a safe and compliant gaming environment.

Blending cutting-edge technology with thorough regulatory practices not only safeguards platforms but also builds player confidence and reduces the likelihood of fines or reputational harm.