Battling Fraud in an AI-Driven World and Its Implications for the Casino Industry

_{A new BBC initiative, ed by Rav Wilding, empowers ethical hackers to infiltrate fraudsters' illegal call centres. (Image: f:nalinframe / Alamy)}

As the digital landscape evolves, so too does the sinister world of scammers, which affects land-based and online casinos too. A new BBC initiative, “Scam Interceptors,” co-produced with The Open University, empowers ethical hackers to infiltrate fraudsters' illegal call centres, disrupting their nefarious activities in real-time. Led by Rav Wilding, the team employs cutting-edge technology to monitor calls and protect unsuspecting victims from losing their hard-earned money.  

Scammers in India Linked to Suburban UK Property

In their latest mission, Rav and his team tapped into a scam call centre in Jalandhar, India, where scammers were targeting a woman in the UK, attempting to siphon thousands from her account. An unexpected slip by one of the scammers revealed a UK accomplice's address, prompting immediate action from Wilding and his team. Meanwhile, an urgent chase unfolded across London as ground interceptors raced to save a dental nurse caught in an Amazon impersonation scam, but a frustrating twist left them scrambling when they learned she wasn’t at work.  

Risks of Using Unregulated Offshore Casinos

This alarming trend of online deception isn't confined to impersonation scams; it extends into unregulated offshore casinos, which pose serious risks to players' financial data. As these rogue online platforms proliferate, they highlight the growing vulnerability of users who may unknowingly provide personal information in pursuit of gambling thrills. Scammers are keen to exploit this trust, using various tactics to access sensitive card details and other private information—often leaving victims devastated.

AML & FinCrime in gambling expert at Ophion Risk Josie Preston told Casinos.com: “Criminal control of unregulated offshore gambling platforms also presents not only significant financial risks for players but is also damaging to the credibility of the legitimate iGaming sector.

"This is especially true in regards to global consumer trust in the gambling industry as a whole."

Addressing the issue of offshore unregulated casinos Josie says, “Unregulated offshore platforms present impressive and UX-laced customer-facing apps or sites, often employ aggressive marketing tactics, and may offer highly attractive ‘loss-leading’ gambling bonuses and incentives, enticing legitimate gamblers into disclosing personal data and financial details (in order to register and deposit gambling funds), which can then be harvested and either sold on in bulk (e.g., via dark web marketplaces), or exploited for fraud and other criminal applications if the platform is under criminal control.

Difficulty Distinguishing Good from Bad

Josie highlighted the difficulty consumers might have in distinguishing the regulated platforms from their offshore counterparts. She said: “Legitimate gamblers may also experience difficulty in distinguishing between regulated platforms and their offshore, unregulated counterparts, and may therefore be unaware that by engaging with black market operators, they unwittingly forfeit the consumer rights and protections afforded by the regulated market.”

Josie gave an example of criminally controlled offshore gambling platforms saying: “The contrived and calculated nature of how criminally controlled gambling platforms are structured provides little opportunities for law enforcement agencies to identify the illicit actors profiteering from the fraudulent gambling enterprise and creates challenges in the confiscation of funds on behalf of the victims of the fraud.

“For example, criminally controlled offshore gambling platforms typically employ a ‘jurisdiction shopping’ approach prior to establishing their operation in a particular country or region, by making deliberate holistic and comparative considerations towards a number of factors offered by the jurisdiction that are determined to be beneficial or conducive to the success of their fraudulent intentions.”

Scammers Often Have Layer of Protection

Speaking about the role of legislation and regulation Josie said: “Offshore jurisdictions with weak economic crime, AML, and/or gambling legislative and regulatory regimes, and those which lack corporate transparency allow the construction of opaque beneficial ownership structures to disguise the ultimate controllers of the scam platform or site, making identification of the perpetrators challenging.  

_{The evolution of technology has many individuals encountering scams. (Image: Courtesy of BBC)}

“Jurisdictions with uncooperative international intelligence sharing and/or foreign extradition relationships create a layer of protection against criminal consequences for the scammers and hinder the potential for the recovery of criminal proceeds by law enforcement agencies for the benefit of victim reimbursement.”

The Proliferation of Scams in a Digital Era

The evolution of technology has changed the face of scamming, with many individuals encountering scams at some point through their devices, whether through email, phone calls, or social media. Recognizing the tricks employed by scammers, like poor grammar or suspicious email addresses, has become essential. However, with the rise of artificial intelligence, these tactics have grown more sophisticated and harder to detect.

AI tools, such as OpenAI’s ChatGPT, have made it easier for scammers to create realistic and believable content, blurring the lines between authenticity and deceit. With generations of rich data to draw from, cybercriminals have begun crafting convincing emails and social media posts that mimic accurate communication styles, effectively increasing their odds of success.

One notable scam involved scammers using AI to present money expert Martin Lewis and Elon Musk making an offer too good to believe. Unfortunately for one man, he did believe it and lost £76k in the process.  

In a BBC news item Martin Lewis met the man who was scammed using an AI generated video of Martin and Elon Musk. Martin Lewis told Kitchen Fitter and victim of the £76k scam Des Healey on BBC 5 Live “It's quite difficult for me to have to sit in the same room as you.”

Martin Lewis met the man who was scammed using an AI generated video of Martin and Elon Musk. Lewis told kitchen fitter Des Healey who was a victim of the £76k scam on BBC 5 Live “It's quite difficult for me to have to sit in the same room as you.”

Des fell victim to a scam advert on Facebook which used a deepfake of Martin along with tech billionaire Elon Musk promoting a non-existent bitcoin investment scheme. Martin told listeners that he has the "weird accolade" of being the most scammed face in Britain.

Martin said: "I've spent my entire career trying to help consumers, and these criminals, thieves, organised crime people have perverted my reputation."  

Notably, analyses indicate that 1 in 12 people in the UK have experienced some form of AI voice scam. One notorious incident involved a UK energy CEO who was tricked into transferring €220,000 to an account, believing he was speaking with his superior. Moreover, advanced deepfake technology has led to distressing incidents, including a kidnapping scam that synthesized a child's voice to manipulate a mother into compliance.  

A Dual Risk for Consumer Security in Casino Industry 

The surge in AI-driven scams is particularly concerning for the unregulated offshore casino industry, where vulnerable players expose their financial information for the hope of winnings. With minimal oversight and security, these platforms leave individuals open to exploitation by scammers who could easily gather sensitive details under false pretence.

Furthermore, the relationship between high-stakes gaming and increasing incidents of fraud is tightening, as unregulated casinos may serve as hotbeds for scammers' activities. With players unaware of the risks they're taking, they could be targets not just for gaming-related scams but also broader identity and financial theft.

Expert Highlights Multitude of Consequences for Victims of Scammers

Cuckoo Smurfing

The criminal fraternity has so many ways of using any financial information they have scammed. Josie outlined one called 'cuckoo smurfing'. 

“Once empty, the gambling wallet/account may then be repurposed by the fraudster. One example of this would be a typology known as ‘Cuckoo Smurfing’ – whereby a criminal operates the victim’s gambling wallet as a mule account without their knowledge (effectively impersonating the victim) to receive deposits in the form of criminal proceeds (e.g., from a stolen debit/credit card, or other illegally derived funds) for the purposes of laundering via the gambling platform. 

"The laundered funds will then be rapidly withdrawn into a third-party bank account under the fraudster’s control until the suspicious activity is identified and the gambling account/wallet is shut down/frozen.

"Once a criminal has taken possession of a victim’s gambling wallet, they will have unrestricted access to their personal data (including contact information) and may then deploy targeted phishing attacks that mimic the gambling platform’s communications, and/or employ the use of generative AI and audio-visual deepfake technology to contact the victim and masquerade as the compromised gambling platform’s Fraud or Customer Support Representatives.”

Authorised Push Payments Fraud

For the uninitiated including the author of this fascinating insight, the exploitation can continue with more fraud being committed. Josie explains: “Social engineering methods can then be applied, exploiting the victim’s panicked emotional state, to extract further information from the victim (e.g., online banking credentials), to manipulate them into authorising 2FA banking transactions under the pretence of securing the bank account associated to the compromised gambling wallet – A practice known as Authorised Push Payment fraud (APP).  

“As it is commonplace for gamblers to use either the same Username (or a variation of) across all gambling sites, an ATO fraudster may employ Open-Source Intelligence (OSINT) techniques to identify whether the Username associated to the compromised gambling wallet is a Username registered on other gambling sites, hence why it is vitally important that players do not utilise the same password across all of the gambling platforms they frequent to prevent universal account takeover.”

A Call for Awareness and Action to Tackle Scammers

As the digital landscape continues to expand, vigilance against scams will require constant adaptation. Individuals should remain cautious with their personal information, particularly on unverified platforms like offshore casinos. 

If you suspect fraudulent activity related to your financial accounts, it’s essential to contact your bank directly rather than using any links provided in suspect communications. Authorities like ActionFraud and reporting services for suspicious emails and texts remain vital tools in the fight against this harrowing trend.

Moreover, as the line between reality and virtual deception blurs, it becomes crucial for society to adapt its understanding of cybersecurity. The development of legislations, such as the Artificial Intelligence Act in Europe, aims to bring more stringent regulations to the tech industry, including scams in the casino world.

The "Scam Interceptors" team continues its mission to educate and disrupt fraud, illustrating the importance of proactive measures in defending against the rising tide of scams, especially as they increasingly intertwine with the enticing but treacherous world of gambling. Users must stay informed and vigilant as they navigate this evolving digital era—where the blight of scammers are only becoming more profound.