The online gambling industry is growing at an unprecedented rate, expanding in global markets, and embracing emerging technologies. But this crypto-fuelled growth doesn’t come without risks – for both casinos and users alike.
While the industry as a whole awaits stricter regulations to protect consumers from fraud, gamblers should be aware of the most common scams and risks – and how to avoid them. Start with the guide below!
Before We Start: Protecting Yourself From Crypto Gambling Scams
The gambling industry has always been a cradle for scams. In the last century, fraudulent actors have carried out some of the most infamous schemes in casinos all around the world, including the notorious Baccarat False Shuffle, which caused an estimated $10-$100 million in losses for casinos, and the Cut Card Camera.
But with the advent of online casinos, financial losses are no longer the only concern, and the use of cryptocurrencies for betting transactions has increased the stakes. According to estimates, around 26% of online casino sign-ups are fraudulent, and thousands of gamblers each day are at risk of losing their funds.
Luckily, the widespread use of crypto across many industries is now calling for more stringent policies and regulations that would protect the privacy and finances of online casino users. But as these regulations are a future hope, gamblers have the responsibility of safeguarding their assets through due diligence.
From learning about the telltale signs of scams to choosing a betting platform using comparative tools like casinoscrypto.com, there is more than one tool you can use to minimize the risk and enjoy safe gambling.
Creating Multiple Accounts to Help a Player Win
The “multiple account fraud” is one of the most common and long-standing scams in the betting industry. It consists in influencing the odds of a player winning by creating several accounts under fake credentials.
This type of scam – which include practices like gnoming and chip dumping – allows bad actors to take advantage of multiple new signup bonuses and offers, or influence the results of a game by making multiple accounts join the same poker table. This type of fraud affects the other players’ chances of winning and can cause significant losses to the online casino.
Payment Fraud and eWallet Hacking
One of the main reasons for using cryptocurrency instead of bank transfers to deposit funds and withdraw winnings is that crypto supports fast and secure transactions. However, these aren’t without risk, and gamblers might be inadvertently putting their crypto wallet at risk.
Some of the most common financial attacks include stealing banking and financial information, forging credentials, and phishing attempts.
While crypto wallets are generally safer and harder to compromise than bank accounts, they might be holding the entire crypto investment of a user. Losing control over your eWallet won’t just cause you to lose the money you’ve won, but can also affect your life’s savings!
The Crash Caused Crypto Owners to Lose Billions
Another risk of using cryptocurrency when gambling online is the high volatility of crypto coins. While the right cryptocurrency is a great investment, the most recent market crash showed the risk of having a crypto-heavy portfolio and withdrawing winnings in Bitcoin.
Indeed, over the past month, Ethereum lost nearly 70% of its value, and some stablecoins like TerraUSD dropped by 90% in market price. While it is undeniable that cryptocurrency will continue to find new applications and uses, using them for your bets today comes with a significant market risk worth considering.
The Telltale Signs That a Scam Might Be Underway
Crypto betting scams are growing in intensity and frequency, and are becoming more ingenious to overcome the security features of technologies like blockchain. However, some telltale signs can help gamblers avoid scams and fraudulent online betting platforms.
- A casino requesting too much information upfront (i.e.: social security number)
- Refusal to pay out winnings
- Stealing the gambler’s funds upfront
- False advertising of bonuses
- Late payments
If you suspect that your crypto gambling site is carrying out scams, or that other users are acting as bad actors, report the accident as soon as possible. And, don’t forget to carry out your due diligence before choosing an online casino – after all, your money, financial assets, and privacy might all be at risk!