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Exclusive Q&A with Kevin Gosschalk, CEO of Arkose Labs

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Reading Time: 6 minutes

 

Arkose Labs has carved a niche for itself in the online fraud-fighting front by launching something that nobody has done before: by offering financial guarantee against credential stuffing attacks for the users of its security system.

Kevin Gosschalk, CEO of Arkose Labs, talks here about this confident initiative. He says this move stems from his belief that “security vendors should stand behind their products and services in a real, tangible way.”

He also offers his insights about the impact of credential stuffing in general and specifically in gambling and gaming industry.

Read on for his forthright and succinct views on fighting online frauds and a host of related topics.

Q. Let’s start with a quick introduction of yourself. Could you tell us about your education, career and interests?

A. I am a native of Brisbane, Australia — born and raised –and graduated from the Queensland University of Technology (QUT) with a degree in Interactive Entertainment. Prior to founding Arkose Labs, I worked in biomedical research where I used machine vision technology for the early detection of diabetes. I later developed technology that assisted adults with intellectual differences in social settings. I believe my unique background brings a bit of a unique mindset to fighting fraud.

Q. How do you look back to the days of founding Arkose Labs? What was the vision when founding Arkose Labs?

A. The original vision was an ambitious one, but one I believe we can achieve: to make the internet safe for all good users. Online fraud is the biggest issue facing businesses and consumers today. I didn’t have a background in the fraud industry prior to starting Arkose Labs, but experienced these issues as a user of the internet. We want to be aggressive in fighting fraud and eliminate it rather than mitigate it. In the 5 years since the company started, we have made great strides in achieving our goal. We grew from a two-person startup in Brisbane to a company that now employs hundreds with offices in multiple continents. We also just closed our biggest quarter ever. The company has been on a great growth trajectory.

Q. Do you think credential stuffing is going to become one of the biggest financial threats for online businesses? Do share the reasons if you think so?

A. We believe it already is one of the biggest threats to online businesses today. This is because they are simple attacks to carry out, but the potential financial motivation is very high. There is an organised, underground cybercrime ecosystem that provides cheap and easy access to freshly stolen data and the latest automated tools, allowing fraudsters to attack enterprises at scale.

The low barrier to entry means that only a small percentage of these attempts have to be successful to turn a profit. Once they have compromised an account, attackers have many different ways to monetize it. They can steal money directly from the account, resell accounts or personal information, use the account to launder money, and much more.

Q. Are gambling and gaming industry particularly vulnerable to credential stuffing? Our readers would be eager to hear your insights into this.

A. Yes, the gambling and online gaming industry is a high target for credential stuffing attacks. One reason for this is that they are usually linked with a bank account or payment mechanism, so fraudsters look to compromise these accounts to gain access to that information. A compromised account can also be used to launder stolen money. Unlike bank accounts, these accounts are generally less protected; users may not have two-factor authentication enabled as they would on a financial account, for example. Online gambling is becoming more popular by the day, which means there is an ever-increasing amount of accounts for fraudsters to target.

Q. Arkose Labs is the first and perhaps the only company that offers a financial guarantee against credential stuffing attacks? Could you tell us the thought process behind such an unprecedented offer?

A. We believe security vendors should stand behind their products and services in a real, tangible way. Companies count on us to protect their most valuable data and keep their platforms safe from account compromises. We launched this warranty to show we are a true partner with our clients and we are putting our money where our mouth is. We feel offering such a warranty gives clients peace of mind that 24/7, we are there to help them defend against evolving attacks. This warranty provides commercial assurance that Arkose Labs will deliver the most robust protection against credential stuffing attacks available on the market today. It includes up to $1 million recoverable for covered losses and a 48-hour remediation SLA (service level guarantee). We do this in a user-centric way, without impacting good consumers’ experience.

Q. From the outside, the credential stuffing guarantee appears an incredibly brave move. How confident are you in your technology and processes?

A. We are incredibly confident. We would not have launched this warranty if we did not believe we could back what we say. We have years of experience protecting some of the largest, global enterprises from credential stuffing attacks.

Q. Have the credential stuffing attacks intensified on your systems after the warranty? How was the response from the hackers and ransomware attackers towards the announcement?

A. We have not seen any noticeable increase in attack intensity due to the warranty announcement. There is always a constant stream of attacks that we protect clients from. We do see a seasonality increase in attack intensity during Q4 and we anticipate heightened attacks during the holiday season.

Q. What are the systems and technologies Arkose Labs has developed to prevent the credential stuffing attacks? Could you talk about the journey through the technology development?

A. The Arkose Labs platform performs sophisticated real-time analysis of traffic to look for even the most subtle indicators of fraud. However, this is done without collecting large sets of personal information, as they can cause a privacy and compliance headache. Instead, the platform focuses on behavior, device, and network characteristics and how they are connected

Arkose Labs classifies and segments traffic based on the risk profile. Triaging traffic, based on whether it is likely to be legitimate, a bot, or human fraudster, provides actionable intelligence that can inform the system of any secondary screening required.

So the platform combines risk assessments with challenges, by leveraging a continuous feedback loop to improve fraud detection rates, while decreasing challenge rates for good users. Embedded machine learning will provide advanced anomaly detection and evolving protection, taking the burden away from in-house teams.

Q. Let’s shift the focus to the effect of the pandemic, lockdown and work-from-home on ransomware and credential stuffing attacks? What were the trends of online frauds during the Covid-19 days?

A. Not surprisingly, online fraud spiked during the height of the pandemic and related lockdowns.  Since so many more people were online, to buy everything from toilet paper to cars and everything in between, there were many more targets for fraudsters to take advantage of. Furthermore, with massively increased traffic levels, it was easier for fraudsters to “blend in” with food traffic. Even as we are slowly moving past the pandemic, consumer digital habits acquired during the time have become permanent, and as such we are seeing permanently higher levels of digital traffic as well as fraud attacks targeting digital accounts.

Q. Arkose Labs has been growing tremendously and winning laurels along the way. What are the developments and expansions in the pipeline for the near future for Arkose Labs?

A. At Arkose Labs we are always innovating. We take feedback from our clients and use that to continually improve the product. We plan to continue to grow our team, expand into new geographies, and innovate to defend against the latest evolving fraud trends.

Q. Finally, what are your advises and suggestions to businesses, especially those in the gaming and gambling sector, on how to tackle online frauds and threats like credential stuffing?

A. The key is to really understand how fraudsters attack you and how they make money. You almost have to think like a fraudster.  The way a fraudster will attack a gambling platform, and how they monetize such attacks, will differ from attacks against an online banking service, social media site, or streaming service. Work backward to figure out how they get money out of your platform and how to make that more difficult. It could be by making it more costly to buy proxies by utilizing robust IP intelligence. Or device fingerprint forcing them to invest in more software. You can trigger additional step-up measures for suspicious traffic. It’s important to not just rely on passive signals, as fraudsters can not only get around those, but it also can lead to false positives.

By making the ratio unbalanced on how much time and money fraudsters have to spend on attacks versus what they get out of them, ultimately they will move on and do something else. That’s the most effective way to stop fraud.

Interviews

Making a lasting mark in a new territory

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Making a lasting mark in a new territory
Reading Time: 4 minutes

 

We talk to Michael Bauer, CFO/CGO at Greentube, to discover the key elements to a successful entry into a new market.

What has to be taken into consideration before entering a new market?

Michael Bauer: The first aspect to consider is whether or not our games already have traction in a particular region, this can be in either social casino, or the land-based environment. If we see that this is indeed the case, then the decision-making process is a much easier one as clearly, this is a positive sign as to our potential within that jurisdiction.

Secondly, we have to take into consideration the market itself. How big is it, what is the overall population, how does that break down into demographic groups and what is the average income? All of these questions are pertinent. We also have to look at how the market is shaped by regulation, for example is it reasonable from a taxation perspective and in terms of products and content, or are there any major restrictions in place? All of these factors are in play when we are deciding whether or not a market is attractive to us.

By way of examples, looking at the Czech Republic and German markets, they have heavy restrictions in place on the product. Germany has a €1 limit on stakes and five seconds between spins, while in the Czech Republic, you also have maximum win limits. This can make products less attractive for players and from a supplier perspective an amended product, which is less scalable and attractive.

How important is it to utilise local expertise within a market?

It is usually very important, because markets are all different to one another in certain respects and this means a one-size-fits-all approach cannot be successfully rolled out across multiple jurisdictions. This is true for both suppliers and operators, and arguably even more crucial for the latter. Operators must have a detailed knowledge of local marketing networks, compliance aspects of regulation and local player tastes and preferences. Local expertise is an integral part of the growth journey towards being an important player in a market, there is the potential for an operator to buy their way to success through marketing, but it is a costly approach.

Are the current conditions in Germany an illustration of potential difficulties of entering a new territory?

Germany is the best current example of potential difficulties when entering a new market due to regulation. It is the first regulated market I have seen that has created an environment that is particularly unattractive for players, causing channelisation rates which are only around 20%. In addition, the regulators have struggled to issue licences. As things stand at present, what the regulation is creating does not lead to the desired outcome – the channelisation of the player base into a safe, regulated environment.

Is there an expectation for both operators and suppliers to enter every regulated region?

To a certain extent, yes. Our bigger, global customers are asking us to join them when entering new markets. We experienced this in both Argentina and Ontario, as well as other smaller regions. The issue here is that a market may not necessarily be attractive enough for us as we have too many other opportunities to tackle at the same time. When we are dealing with a smaller jurisdiction, the cost of entry and resources may be better funnelled towards the bigger openings.

Certain operators may seek to launch games on as global a basis, but this is a trend that is becoming less prevalent, which is down to different regulations and operators utilising various platforms in certain regions.

How long does it take to know whether you have been successful in a market? How is that success measured?

When a new region opens up and the regulations in place are crafted carefully, such as in the Netherlands for example, operators who gain a licence are able to ramp up quickly. We have also seen in Switzerland that markets can become very interesting, very quickly. Our measure of success is market share, where we receive feedback from operators on the success of our games. The other aspect is the GGR we are generating in a region and the number of players we are reaching. It may be that a certain jurisdiction has a weak currency, or low local purchasing power, but where there are many people playing our games. Colombia is an example of this, where the currency is not as strong as the European markets we operate in for example but we have a large player base, and can also be regarded as a success. Germany is a less than ideal example, because players are leaving the regulated market, and we cannot supply the black market.

Do you have any particular examples of successful or non-successful market entries?

The starting point of a successful entry for us is usually predicated on being first to market. We achieved that in Switzerland and the Netherlands, where on day one of regulation our games were available to play. In itself, this is a success because it’s normally very tricky to be that fast. Secondly, after a certain time you look at how big your market share is. Switzerland, the Netherlands, Poland and also Norway are good examples here, as we quickly gained market share through the latter with state-owned Monopoly holder Norsk Tipping. You also have high hopes of certain jurisdictions that don’t come to fruition, which despite best intentions and plenty of hard work can be out of our hands due to regulations requiring amendments of games and stakes.

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Interviews

Exclusive Interview: Vivo Gaming’s New CCO Neil Howells

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Exclusive Interview: Vivo Gaming’s New CCO Neil Howells
Reading Time: < 1 minute

 

Neil Howells, the new CCO of the live dealer platform provider Vivo Gaming, speaks about what he hopes to achieve in the role and the latest innovations the company has to offer in the live space.

 

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Gaming

European Gaming meets Gökçe Nur Oguz, CEO and Co-Founder of Playable Factory

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European Gaming meets Gökçe Nur Oguz, CEO and Co-Founder of Playable Factory
Reading Time: 4 minutes

 

Q: Tell us about how & why you came to found Playable Factory?

Over four years ago – when we founded the company – gaming was booming and it still is today. All our friends were working in the sector and we wanted to, too. We were new to it all. Monetization, LTV, CPI… sounded like another language to us but gradually we learnt from our friends and tapped into the scene. As we grew our understanding, we realised playable ads played an important role. If done well, they can add to the experience of gaming. But good ones were frustratingly hard to find. So, along with my co-founders, Berat and Omer, we started making them ourselves and the rest is history.

Q: What were you doing before that/what led to it?

After university, I completed a PhD in Fluid Dynamics, a subdiscipline within physics and engineering. There were a few gamification projects, like building games for people to play that would simultaneously have a background programme running to solve an operational problem. This part had me captivated. Outside of academia, I was always gaming and would gamify everything I did. Not just computer games, but card games, board games etc… So it felt natural to me to do something I enjoyed.

Q: Describe Playable Factory & Gearbox in a nutshell?

Playable Factory is a company that focuses on the creative needs of digital advertisers. The focus is mostly on playable ads and recently on video ads for gaming clients specifically. Our secret (or not so secret) weapon is Gearbox, an online editing and iterating platform for creatives. This is split into two: Gearbox Playable, create your own tailor made playable ads (create, iterate, download and repeat) and Gearbox Video, a tool that allows users to record gameplays easily and create/edit/tweak to their heart’s desire. You can generate hundreds of videos in an automated process with one click.

Q: What kind of support can a gaming developer (or brand marketer) expect from your
platform?

Gearbox is made for people who want to monetize their games. It’s a one-stop shop for advertising and promotional videos. No prior coding knowledge is needed so anyone can use it, which hasn’t really been done to this extent before – with full, fast-response, technical support. It’s like having the full agency experience on one platform. For developers, we provide them with market insights around playable ads, guiding them to the right concept in
a speedy manner. They can get creative with graphic filters, text to speech options, banners… and any feature that improves the performance of the playables or video ads.

Q: Who are your clients?

We work with top mobile game publishers: Zynga, Playtika, Dream, Voodoo, Lion Studios, Gram Games and lots more. Apps publishers like Funimate, Trendyol and Gopuff. And brands include Hasbro, LEGO, Unilever and L’Oréal.

Q: What is unique about the Turkish mobile market/why has it become known as the Silicon
valley of the mobile gaming market?

Turkey’s become a global mobile gaming hub. It’s amazing to watch it take off. Some of the best publishers and developers in the world are based here. I think it’s got a lot to do with the ability for rapid development. You’ll find teams of 4-5 young people making a steady stream of mobile games that they send out into the market. Thanks to home-grown success stories, the eyes of investors have turned towards us. But it’s also down to the culture here. Gaming is hugely popular in Turkey and you can feel the passion and drive among people in the
scene here. Local and global economic forces make international expansion lucrative and it feeds back into making the industry making it even bigger and better – and long may it continue.

Q: Have you always been passionate about gaming? When did you first get into it?

I’ve always liked games: console, board games, mobile games… For me, it’s cracking the puzzle that gets me hooked on a game. In my childhood, my younger sister and I were always inventing our own games. Now, business-wise, my co-founder Berat and I, enjoy gaming together and playing board games in our downtime. We actually got the licence for the hugely popular party game Codenames from Czech Games. Since then, we’ve published two more board games together. This was before we entered mobile gaming.

Q: What’s your favourite mobile game?

It has to be 2048. I like puzzles and numbers 🙂

Q: What’s been the biggest challenge you’ve overcome in your career to date? And greatest
success?

Without a doubt: building a company from scratch on a technology that we learned all by ourselves, with no training. I didn’t know how to build playable ads, I didn’t know anything about HTML5 gaming and coding so finding a good developer and establishing a business was the biggest challenge.

Q: What’s one piece of advice you’d give to start-ups in the gaming industry?

I never truly understood the importance of a team before I started working in gaming. PhDs involve mostly working solo and it misses the team spirit. The pressure is high because the success of your work is always dependent on you, and you alone. The gaming industry is totally different. Success reflects on the team who built the game. I wish I’d known that before joining the industry. So, my advice would be to evaluate your team, and believe in them because that’s the only way to reach success. If you don’t like the people you work with, it’s often much harder for you to fulfil your full potential. When your motivations align with your team’s, you can combine forces and focus to get the success you deserve.

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