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State of Play’s TL;DR
- An industry analysis says online operators sometimes inadvertently hurt retention and lifetime value of their products.
- Anti-fraud systems can block or delay legitimate customers instead of separating real threats from valuable players.
Fraud prevention is supposed to protect revenue, but an industry analysis from Frogo argues that online operators can damage profitability when controls are too aggressive.
The warning is especially relevant for online casino businesses balancing KYC, payments, withdrawals, and player retention.
Digital businesses, including online gambling operators, are facing more sophisticated fraud pressure as AI-assisted tactics spread across verification and payments. Frogo chief executive Volodymyr Todurov said KYC is now a major target, with “real-time document generation and deepfake face-swapping” becoming more advanced.
Aggressive anti-fraud can block good customers too
According to the analysis, one of the biggest mistakes operators make is treating fraud prevention only as loss reduction. Todurov said anti-fraud should also be measured by operational efficiency, retention, and lifetime value.
That matters because blunt controls can reject legitimate payments, slow withdrawals, and frustrate real customers. Todurov described the problem as operating with a “guilty until proven innocent” mindset and warned that “treating legitimate players like suspects completely destroys the customer experience.”
The article also says high-value customers are at particular risk of being misclassified. Travel, larger deposits, and the use of multiple payment cards can all resemble suspicious activity without necessarily being fraudulent, Todurov said.
“Without a nuanced evaluation model, you risk blocking your highest-revenue players.”
Device fingerprinting and human review remain central
Frogo says risk assessment should begin with a user’s first visit through device fingerprinting. Its standalone tool evaluates more than 300 client-side signals, including IP risk, VPN and proxy use, browser specifications, screen resolution, hardware traits, time zone mismatches, remote desktop tools, and virtual machine detection.
Within the wider Frogo platform, actions such as registration and transactions are checked against business risk rules in under a second. The system can send negative risk alerts to fraud analysts, while positive behavioral alerts can go to marketing and VIP teams.
Todurov also cautioned against overreliance on AI alone. “AI isn’t a silver bullet,” he said, adding that its value depends on specialists understanding where machine learning helps and where deterministic logic works better.
Based on reporting by Richard Mulligan for iGaming Business.
