How the gaming industry is using data to minimize risks in a risky business
Digital betting platforms are leveraging data to perform preventative cybersecurity, reduce losses from ‘betting-arbitrage’, and ‘match-fixing’ by monitoring for high wager volumes, and providing a superior consumer experience by leveraging alternative social data to stimulate increased spending
In this article we will discuss:
- Why a ‘purely odds-based’ business is reluctant to leave anything to chance
- Providing a superior customer experience
Why a ‘purely odds-based’ business is reluctant to leave anything to chance
Gambling is all about ‘luck of the draw’, yet big digital businesses such as:
- Fantasy, and actual sports betting
- Internet-based casinos
- Historical/odds analysis software
- Bookmaker services
Are leaving nothing to chance, and for good reason. As the online betting, and gambling industry grows, especially during a year of ‘social distancing’, and gambling hubs like Vegas, and Macau being shuttered. Online gaming industry players are using open source data collection in order to:
Cybersecurity: Fortifying the walls of digital ‘gaming floors’
The gaming industry, like any business which has a large capital turnover, needs to protect their empires from cybersecurity threats. Here are common industry vectors, and how open-source web data collection, and IP networks are used as a preventative and/or real-time moat against threats:
- Phishing -> Checking for malware by pulling suspicious links into sandboxes, and detonating them as a preventative measure
- Trust Relationships and Third Party Risk -> Using residential IPs to perform self- testing
- Weak or compromised login credentials -> IPs from different geolocations help the red-team identify such breaches ahead of real threats
- Ransomware / Malware -> Crawling for DNS URLs, and identifying open ports as an indication for the intent of fraud or a clear indication of risk in terms of configuration
- Misconfiguration -> Checking to see how gaming websites react from varying geolocations
Preventing gaming fraud
Another big issue in terms of gaming is fraud. Two very common scenarios come to mind (though there are hundreds, even thousands of elaborate schemes devised on the daily):
- Detecting ‘sure-bets’ in order to prevent ‘betting arbitrage’: ‘Arbing’, as it has come to be known among gamblers, is the practice of betting on multiple outcomes with different bookkeepers in order to guarantee that one wager is successful. Bookmakers frown on arbitrage for obvious reasons, and can combat this practice by collecting open-source data, and minimizing their risks. For example, if there are high request volumes on a certain wager across multiple betting outlets then they can leverage this data to limit a particular bet to mitigate risks.
- Monitoring, and counteracting ‘match-fixing’: This is an old practice whereby a game is ‘fixed’ to give a certain score or outcome so as to profit one wagering party over another. Betting software, digital bookies, and other online gaming entities can use data collection to collect historic sports statistics, and cross-reference these with pre-game, and in-play live football stats, for example. Highly negative, or statistically improbable correlations will trigger a red light, alerting your team to the possibility of foul play.
Use alternative social data to perform risk assessment
Scanning social media, as well as search engines can be a rich source for detecting fraud, and malicious activity as far as the gaming industry is concerned. The social vector is very often overlooked in the betting space, but data collected can be used to save millions of dollars annually in revenue lost to fraud. Here are some examples:
- Searching for specific keywords, player/team name, fake profiles, as well as chats/groups that are focused around a certain match or wagering on said game’s odds. When suspicious activity is identified this can be reported to the social network in question, and/or sent over to your legal team for further action.
- As more people work from home, and as gaming networks increasingly use social media to promote their products, and services this is creating new corporate vulnerabilities on social media such as viruses, and ransomware sent via social media which can be prevented through social media monitoring.
Providing a superior customer experience
In the gaming industry, user experience is key both in terms of customer acquisition, and retention. One of the main things companies in the betting, and gambling entertainment business need to keep in mind is that users want to believe that their odds are better specifically on your platform. This mindset of ‘perceived ability to beat the casino’ is paramount in this industry and can be achieved through open source data collection in the following ways:
Providing analysis tools – Just as retail investment/trading platforms have discovered the wonders of keeping their audiences informed, and educated, so too the betting industry stands to gain from such an approach. An educated customer, is an empowered customer, and an empowered customer feels confident to ‘spend/risk/invest’ more capital. In this context, gaming software can benefit by providing a dashboard that gives users access to:
- Historic match charts
- Player statistics
- Winning/losing odds
As well as any other relevant data, crucial to enabling better confidence in the fact that they are placing an ‘educated bet with exceptionally good odds of winning’.
Creating a superior user experience – Understanding what motivates your target audience, and what gets them ‘ticking’, so to speak, is crucial in retaining players, especially in an industry where many users sharply feel the burn of loss in their pockets. Many bricks, and mortar casinos, for example, track player winning/losing streaks, from the second they step foot into the hotel casino lobby. On a losing day they placate gamblers with free drinks, meals, and gifts, in order to lift their spirits, and keep them spending. Page 2 of Playtika’s ‘Investor Relations’ US Securities, and Exchange Commission Registration Statement, for example, is very revealing in terms of the efficacy of these types of tactics in the online sphere:
Collecting data on social media, search trends, post/ad engagement as well as building a buyer persona profile based on publicly available data, can be key in understanding what type of experience, reward scheme, and social interactive structure will produce the highest revenue stream from a given target audience.
The bottom line
Putting data at the epicenter of the gaming industry’s business model has gone from ‘nice to have’ to being an absolute necessity. Beyond cybersecurity, and consumer acquisition/retention, gaming companies are using publicly available data collection to:
- Gain a competitive edge vis-a-vis data on paid competitor advertisements /organic search results, and rankings / competitor game engagement stats
- More effective marketing through social sentiment analysis, consumer aspirational profiling (what lifestyle gamers hope to achieve through betting) , as well as search, and content trends (such as videos, social posts, blogs, and influencers)
- Using big data analysis to improve ‘the casino’s odds’ through analyzing historical data from previous games, player stats, winning/losing scoring patterns, and the like