Financial analysts vs gambling fraud - global experience

With the rapid development of the gambling industry and the gradual shift of gambling operations to the online space, not only is sports betting becoming more popular, but the scale of fraudulent schemes—previously associated mainly with traditional casinos and betting companies—is also expanding. To effectively counter the consequences of this digital "migration," it is essential to understand how these schemes are evolving in the online gambling environment, what measures national regulators are already implementing, and what improvements can be made to the existing response systems.

A brief look at the history: gambling fraud is not a new phenomenon. Practices such as manipulating the outcomes of sporting events, exploiting confidential information for unfair advantage, or organising “customised” bets have long existed. However, the transition of gambling to digital platforms has revitalised and reshaped these schemes. The anonymity afforded by online systems makes it easier for fraudsters to conceal their activities. For instance, insider information can now be shared via encrypted chats or anonymous accounts, and "custom" bets can be coordinated across international networks without any direct interaction between participants.

The online environment also makes it more challenging to detect fraudulent schemes. While traditional betting companies could identify suspicious behavior through a player's physical presence or direct interactions, the digital space demands more sophisticated tools and analytical approaches. The rapid growth of sports betting exacerbates the issue: the higher the volume of transactions, the more difficult it becomes to manually detect anomalies.

To combat online gambling fraud, national regulators are increasingly collaborating with financial analysts and specialized companies. This partnership not only aids in uncovering unfair practices but also enables preventive action through timely detection. It is based on the recognition that gambling fraud often has a clear financial footprint. For example, a sudden surge in bets placed on an unlikely outcome may signal the use of insider information. Analysts equipped with advanced technologies can identify such irregularities and forward the data to regulators for further investigation and response.

One of the most prominent examples of such cooperation is the activity of the Brazilian gambling regulator - the Prize and Betting Secretariat of the Brazilian Ministry of Finance (SPA). After the legalisation of the gambling market in the country, signed a five-year agreement  SPA with Integrity Compliance 360 (IC360), an analytical company specialising in the fight against sports betting fraud. This is the fifth agreement signed by SPA, underlining the Brazilian government's systematic approach to ensuring transparency and integrity in the market. IC360 is known for its advanced risk detection and early warning systems. Its technology allows real-time analysis of betting data, identifying suspicious patterns and reporting them to the regulator.

Data analytics has become an indispensable tool in combating fraudulent schemes in the online sector. Modern systems are able to process huge amounts of information in real time, identifying unusual betting patterns or suspicious activity. Monitoring player behaviour and financial transactions allows gambling organisers not only to detect fraud but also to improve security measures. Early warning systems allow them to respond to threats before they cause significant damage. This protects not only the players themselves but also the reputation of the casino or betting company, which is critical in a competitive online environment.

The development of the gambling market in Ukraine closely mirrors global trends. Since the legalization of gambling in 2020, online sports betting has experienced rapid growth. However, as in any fast-growing market, this expansion is accompanied by increasing risks of fraud. Practices such as the use of insider information or the coordination of “custom” bets may already be present in the Ukrainian gambling landscape, even if their scale has not yet reached the levels seen in more mature markets.

International experience—such as Brazil’s approach—can serve as a valuable reference point for Ukraine. The adoption of advanced analytical tools and collaboration with financial analysts can empower Ukrainian regulators to identify threats early and take proactive measures to safeguard the industry. This is particularly important in today’s highly digitalized environment, where fraudulent schemes are becoming more complex and harder to detect.