Fraud in iGaming Arbitrage: How to Protect Your Traffic and Budget?

That surge cost the industry over $1 billion between 2022 and 2023.

If you’re buying traffic to promote online casinos or sportsbooks, what’s called arbitrage, you’re in the crosshairs. The concept is simple: you pay for clicks through ads, and when those visitors sign up and deposit money at gambling sites, you earn commissions.

Sometimes that’s $50 to $500 per player. Other times it’s a percentage of what they lose over their lifetime.

The math can work beautifully. But fraudsters see the same opportunity you do.

The online gambling market hit $78.66 billion in 2024, and it’s climbing toward $153 billion by 2030. High commissions plus digital transactions create perfect conditions for fraud. Unlike physical stores where fake customers stand out, digital traffic can be manufactured at massive scale using bots and stolen identities.

This guide breaks down the four main fraud schemes targeting arbitrage campaigns, the warning signs that reveal bad traffic before it drains your budget, and the protection tools you can implement starting today. Think of it as fraud prevention for people who’d rather focus on profitable campaigns than technical jargon.

The Four Fraud Schemes Draining Your Budget

Fraudsters don’t use just one playbook. They rotate through multiple tactics depending on what your defenses can catch. Here’s what you’re up against.

Bot Traffic: Fake Clicks That Look Real

Bots are automated programs that visit websites and click ads. The sophisticated ones mimic human behavior, moving mice, scrolling pages, even pausing to “read” content.

The scale is staggering. Research shows 34-38% of gambling PPC clicks come from invalid sources, meaning nearly half your ad spend evaporates before any real person sees your offer. Another study found 53.9% of all traffic to gambling sites comes from bad bots.

You pay for every click. Bots will never deposit money.

Fake Conversions: Accounts That Never Deposit

This scheme targets CPA (cost per acquisition) campaigns where you earn commissions for player registrations. Fraudsters create fake accounts using synthetic identities, mixing real and fake information, or stolen documents. Some operate device farms with hundreds of phones running emulators.

These registrations look legitimate in your tracking dashboard. They pass initial checks. But 17% of CPA applications show signs of manipulation, and those fake players never deposit real money. You’ve paid the commission for nothing.

Cookie Stuffing: Stealing Credit for Conversions

Cookie stuffing plants tracking cookies on users’ devices without their knowledge. When those users later visit a gambling site and sign up, the fraudster’s cookie claims credit for the conversion.

The methods are sneaky: hidden iframes that load in the background, browser extensions that inject cookies, redirect chains that bounce users through tracking links. Studies show 91% of cookie stuffing operations use redirect chains to hide their tracks. In one notable case, eBay affiliates extracted $28 million through cookie stuffing before being prosecuted.

You end up paying commissions to affiliates who didn’t actually refer those players.

Bonus Abuse: Multi-Account Schemes

Online casinos offer welcome bonuses. Deposit $100, get $100 free. Fraudsters create dozens or hundreds of accounts, claim these bonuses repeatedly, meet the minimum wagering requirements through carefully calculated bets, then withdraw the funds.

This costs the iGaming sector approximately 15% of annual gross revenue. Fraudsters use anti-detect browsers and VPNs to mask their identity across multiple accounts. For operators paying CPA commissions on these “players,” it’s double damage. You pay the affiliate commission while the casino loses money on bonus payouts.

Red Flags That Signal Fraudulent Traffic

Catching fraud early saves your budget. These patterns reveal problems before they spiral out of control.

Traffic Pattern Warnings

Sudden volume spikes deserve immediate attention. If one affiliate suddenly sends 3x their normal traffic without explanation, something’s wrong. Real traffic grows gradually as campaigns optimize.

Geography tells a story too. Countries like Bangladesh show 8.5% fraud rates and Indonesia hits 8% , far above global averages. If you’re targeting the UK but getting floods of traffic from high-risk regions, you’re likely paying for fraud.

Timing matters. When 80% of your traffic arrives between 2-5 AM local time, you’re not seeing real people browsing at odd hours. You’re seeing automated scripts running on schedules.

Conversion Rate Impossibilities

Your conversion rates should vary naturally day-to-day. Real human behavior isn’t perfectly consistent.

High click-through rates paired with near-zero conversions point straight to bot traffic. The bots click everything but can’t complete registration forms or make deposits. On the flip side, conversion rates above 10% on CPA campaigns suggest cookie stuffing, someone’s claiming credit for conversions they didn’t generate.

Perfect consistency is suspicious. If your conversion rate stays exactly 7.3% every single day for weeks, that’s not optimization. That’s automation.

Session Behavior That Screams ‘Bot’

Session duration under 2 seconds means visitors aren’t real. Humans need time to load pages, scan content, and decide whether to click through.

Watch for zero engagement signals: no scrolling, no mouse movement, no clicks on any page elements. Real visitors interact with pages. Bots just register the page load and exit.

Identical browser fingerprints across supposedly different users expose device farms. When fifty “different” visitors all have the exact same screen resolution, browser version, and installed fonts, they’re coming from the same emulator setup.

Five Immediate Red Flags:

• Traffic spike of 3x or more from a single affiliate within 24 hours
• Geographic mismatch, traffic from countries you’re not targeting
• Conversion rates outside 1-8% range (either too high or too low)
• Average session duration under 5 seconds across a traffic source
• New affiliate delivering exceptional performance on day one without optimization period

These patterns won’t always mean fraud, but they should always trigger investigation.

Your Fraud Protection Toolkit

No single tool stops all fraud. You need layered defenses that catch different schemes at different stages.

Essential Tech Defenses

Server-to-server (S2S) tracking validates conversions through direct communication between servers rather than browser cookies. This blocks cookie stuffing because fraudsters can’t inject fake tracking data into secure server connections.

IP risk scoring checks every visitor against databases of known fraud sources. Services identify traffic from data centers (where bot farms run), VPNs, proxy servers, and previously flagged fraud operations. This stops bot traffic before it costs you money.

Device fingerprinting creates unique identifiers based on browser type, screen resolution, installed fonts, operating system, and dozens of other characteristics. Even when fraudsters use VPNs to change IP addresses, their device fingerprint stays consistent. This catches multi-account schemes and device farms.

Monitoring That Catches Fraud Fast

Start by documenting normal performance: What’s your typical conversion rate by traffic source? Average session duration? Geographic breakdown? These baselines let you spot anomalies.

Set automated alerts for deviations. When conversion rates jump above 10% or drop below 0.5%, you need to investigate. When traffic from an unexpected country exceeds 15% of total volume, pause and review.

Most importantly: hold commission payments for 30-90 days. This window lets you verify that referred players actually deposit and play before you pay affiliates. Many fraud schemes become obvious within the first month when fake accounts show zero engagement.

Budget Protection Rules

Daily spend caps per affiliate limit your exposure. If an affiliate turns fraudulent or gets compromised, you’ve lost one day of budget instead of weeks.

Automatic pause triggers save you from runaway fraud. Set your tracking platform to stop traffic when conversion rates exceed realistic thresholds or when invalid traffic percentages spike.

Vet new partners thoroughly. Check their website for quality content. Verify their social media presence and history. Ask for references from other operators. Then start relationships with limited budgets, maybe $100-300 for the first week while you verify traffic quality.

Quick Compliance Check

Regulators increasingly hold operators responsible for affiliate conduct. The UK Gambling Commission requires KYC verification on affiliate partners, including proof of identity and address. Your marketing must include responsible gambling messaging and geographic restrictions.

US requirements vary by state, New Jersey charges $2,000 for revenue share licenses, Pennsylvania requires $500 registration. Staying compliant protects you from regulatory fines that can exceed fraud losses.

Start With These Three Actions

Digital ad fraud cost $84 billion globally in 2023, with iGaming suffering disproportionate targeting. This isn’t theoretical, it’s happening to operators right now.

Here’s where to start:

1. This week: Implement server-to-server tracking and basic IP risk scoring. Free tools like Fraudlogix’s entry tier combined with Google Analytics bot filtering provide immediate baseline protection.

2. This month: Document your normal conversion rates, session durations, and traffic patterns. Configure automated alerts for deviations. 3x traffic spikes, conversion rates outside 1-8%, or unexpected geographic sources.

3. Ongoing: Vet every affiliate before sending them traffic. Check websites, verify references, start with limited budgets. Hold commission payments for 30 days minimum while you verify player quality.

Fraud prevention creates competitive advantage. Industry-wide fraud runs 12-15% of marketing budgets, so every dollar you save from fraudsters flows directly to your bottom line. Protect your traffic, protect your budget, and build a sustainable arbitrage business.