Friendly fraud, where a cardholder makes a genuine deposit, plays with the funds, and then disputes the transaction with their bank, has long been a cost of doing business in online gambling. What has changed in 2025 is the scale, the sophistication of the patterns, and the shrinking window operators have to mount a credible response.
Why Friendly Fraud Is Accelerating in iGaming
Several converging factors explain the uptick operators are experiencing this year. First, open banking data has made it easier for consumers to understand exactly which reference codes appear on their statements, giving them cleaner language when crafting dispute narratives. Second, chargeback processing times at many European acquiring banks have compressed, meaning operators receive dispute notifications later in the evidence window than they did previously. Third, a meaningful share of players have become aware through affiliate communities and social channels that initiating a "gambling dispute" carries a higher success rate than disputing a retail purchase, because banks often default to consumer protection rules when the merchant category code is 7995.
The net result is that the average chargeback rate in online casino verticals crept upward through the first half of 2025, with several mid-size operators reporting rates approaching 0.8 percent of transaction volume, well above the Visa and Mastercard thresholds that trigger monitoring programs.
Emerging Patterns Operators Should Recognise
The Bonus-and-Dispute Cycle
A recurring pattern involves accounts created specifically to claim a welcome bonus, complete the minimum wagering requirement using low-margin games, withdraw any winnings through a different payment method, and then dispute the original deposit. Because the deposit and the withdrawal use separate rails, it can appear to the bank that the player never received a service. Operators relying solely on transaction logs rather than session data struggle to refute this narrative convincingly.
Delayed Dispute Timing
Players are increasingly waiting until the final days of the chargeback eligibility window, typically 120 days for most card schemes, before filing. This timing is not accidental. It exploits the reality that operators often lack staff capacity to retrieve granular session data for transactions that old, particularly when the account has since been closed.
Coordinated Small-Value Disputes
Rather than disputing one large deposit, some players spread disputes across multiple small deposits below the thresholds that typically trigger manual review. Individually these look like minor administrative friction; collectively they represent significant revenue erosion and reputational risk with acquirers.
What Operators Must Do Now
- Retain full session logs, including game-round data, bet history, and login metadata, for a minimum of 18 months and in a format that can be exported rapidly for dispute response packs.
- Implement deposit confirmation flows that generate a timestamped, player-acknowledged record of the terms of service, the gambling nature of the transaction, and the no-refund policy.
- Use behavioural scoring at the deposit stage to flag accounts exhibiting high dispute-risk indicators: fresh registration, bonus eligibility, single-session activity, and withdrawal to a different instrument within 72 hours.
- Map chargeback reason codes systematically. A cluster of reason code 10.4 (card absent fraud) disputes originating from a single acquiring BIN or geographic region often signals an organised pattern rather than isolated incidents.
- Establish a dedicated dispute response workflow with defined SLAs. Operators who respond within 24 hours of notification with complete evidence packs win a materially higher proportion of representments.
The Compliance Dimension
Friendly fraud sits at an uncomfortable intersection of payments risk and AML obligations. When a player disputes a deposit and the operator suspects the dispute is fraudulent, the operator may also need to consider whether the original activity warrants a Suspicious Activity Report. Regulatory guidance in several jurisdictions, including the UK and Malta, treats chargeback abuse as a potential indicator of problem gambling or bonus abuse, both of which carry their own reporting implications. Compliance officers should ensure that chargeback data feeds into the broader transaction monitoring framework, not just the payments team's loss column.
Chargeback data is not just a finance metric. It is a behavioural signal that belongs inside your AML transaction monitoring framework.
How OnlineShine Approaches This
At OnlineShine, we work with operators to build integrated risk frameworks where payments data, player behaviour analytics, and AML monitoring share the same data layer. Friendly fraud cannot be managed in isolation by a payments team that never speaks to the compliance function. Our managed-services model ensures that dispute patterns surface simultaneously to the people who can act on them operationally and those who need to consider the regulatory implications. If your current chargeback rate is climbing or your representment win rate is below 40 percent, those are the two numbers worth addressing first.
