Introduction
Gambling operators frequently face the challenge of maintaining an optimal balance between user conversion and risk control. Finding the right balance in fraud prevention strategies is crucial for businesses in the gaming and online entertainment industries. When the policies are too strict, they run the risk of excluding legitimate players who feel unfairly watched or restricted. On the other hand, more light versions can negatively impact revenue and brand reputation. Achieving harmony between protection and accessibility ensures a secure environment without losing valuable customers.
Covery created two graphs to illustrate how fraud prevention can be used in the betting industry using information from a number of our clients.
Road of research
To assess the effectiveness of Covery.ai, the team analyzed data from 2 time periods: first one – at the start of launching, second – after 6 months of full set up risk logic. First time was taken 1M $ of withdrawals and were analyzed how big was ratio to deposit amounts and which group of users made it.
Meanwhile, users group were also separated into 4 types:
- ordinary players (most safe users, play without any abuse attempts)
- lucky searchers (users that are sure that their accounts are not lucky and try to make other to find new luck)
- bonus abusers (this group also contained multiaccounts, bot systems and other ways of abusing the platform)
- payment fraud (users who try to make a deposit using for example stolen cards or databases)
Key performance metrics in the funnel included:
- Registrations: Number of users and their share from total registrations (separated into 4 groups mentioned above)
- Deposits: Distribution from total deposit amount (total sum from all categories of users always 100%).
- Withdrawals: Payout ratio (percentage of withdrawals versus deposits, segmented by user type).
Results
Before Covery the operator was losing money: $950k in deposits turned into $1.0M in withdrawals — a 106% payout ratio. Ordinary players made up only 40% of users and deposits, while bonus hunters and fraudsters controlled 40% of deposits and were cashing out almost everything (up to 110%).
After Covery the picture completely changed. Ordinary players grew to 80% of the user base and contributed 60% of deposits, with withdrawals dropping to just 40%. Bonus abuse fell from 110% to 4%, and fraud payouts from 90% to less than 1%. Overall, the business moved to a healthy 45% payout ratio — $950k in deposits leading to only $500k in withdrawals.
Impact Analysis
With Covery, the operator completely reshaped its funnel. Legitimate players were now under 80% of the user base — and their share of deposits grew from 40% to 60%. At the same time, the overall payout ratio dropped from 106% to ~45%, totally improving margins. Fraud was blocked, allowing only that part, which was giving money: registrations fell from 15% to just 4%, while fraudulent withdrawals shrank to only 5% of deposits.
Conclusion
By using Covery.ai‘s risk management, the operator completely changed its player funnel. Fraud and bonus abuse went down sharply, while ordinary players became the clear majority.
As a result, the business started to grow more sustainably, with lower risks and much healthier conversion — boosting both efficiency and profit.