Scenario 3: Going to a Casino

Setting the Scene

Instead of going to Las Vegas or Atlantic City, you decided to head to the casino to gamble with friends in the metaverse due to the convenience and cost savings. Some of your friends are 18-year-old international students. You also don’t have to worry about someone following behind you while holding poker chips to play games. The metaverse can offer a safer environment to gamble comfortably in your home.

Risk 1:
Governance

Not all countries allow gambling, and the age limit varies by state in the United States. Therese restrictions encourage people to cross the border where gambling is allowed. Over the internet, to bypass these restrictions, users will use VPN and/or The Onion Router to join casino games with friends in the metaverse to circumvent the ban from the government. [38]

Risk 2:
Identity

Similar to a teenager trying to purchase alcohol with a fake ID, underage users can create fake accounts and connect to the metaverse to play casino games. Falsifying identity allows accessing age-restricted and blocked content from the government while protecting privacy. Furthermore, scammers will likely use fake accounts to hide their identity from criminal activities.

Risk 3:
Security

In addition to fake accounts, scammers may leverage false advertisements if the service providers allow posting ads for subscriptions to generate revenue to build and maintain the metaverse. [43] Scammers are drawn to gambling events because gamers’ accounts are likely associated with financial information.

Justification of
Risk 1

Ten countries ban gambling due to addiction, religion, and cultural norms. Gambling overseas is subject to arrest if caught. Therefore, gambling in the metaverse provides an opportunity to gamble without repercussions. VPN allows bypassing local censorship and blocks. Modern gambling technology includes using cryptocurrencies for betting. Because there is no physical boundary, it is difficult to identify and enforce users based on nationality. [39]

Justification of
Risk 2

The metaverse will be interoperable with Web 2.0, and current trends on fake accounts in Web 2.0 will threaten digital safety.  The trend will likely continue into the metaverse because stolen credentials from Web 2.0 can be used in the metaverse to generate fake accounts. Users may create multiple fake accounts allowing minors to engage in illegal activities. Using false identities through fake accounts, users attempt to protect their privacy while engaging in unethical activities. For instance, Facebook alone dealt with over 1.3 billion fake accounts in 2022, which were created with malicious intent.[41][42]  

Justification of
Risk 3

Scamming is nothing new. It is widely occurring online in conjunction with phone calls/texts. TransUnion’s 2022 Global Digital Fraud Trends Report found gaming fraud rose nearly 35% in one year. [44] Fraudsters will use various techniques such as setting up fake game events, blackmail, and social engineering to generate revenues illegally. American Gaming Associated states US online sports bookmakers generated $2.8 billion in revenue in the first half of 2022. [45] The metaverse will create extended opportunities for criminals to launder money. 

Compensating Controls

Current Controls
Risk 1

Technological solutions are available to ban access to illegal websites determined by state actors. Service providers can use geo-locked accounts within certain countries to identify users’ nationalities while implementing a VPN blocking mechanism to block IP addresses.[40]

Current Controls
Risk 2

Background checks using identity services such as ID.me, LifeLock, AWS Secrets, and  Manager that can support automated verification processes. large corporations such as Apple and Verizon adopted Identity as a Service such as ID.me to validate customers for discounts. 

Current Controls
Risk 3

Besides user awareness training, vendors like IBM offers Fraud Management Software as a service using behavior analytics, but it has limitations.[46] However, current technological solutions have limitations. Law enforcement agencies will have to get involved to investigate crime and seek prosecution.

Our Mitigation Strategies

Mitigation Strategies for Risk 1

Legislature: 

  • Enforce service providers to practice content moderation per local regulations. In other words, service providers need to block services and any content related to gambling over the metaverse. 

Provider: 

  • Similar to current censorship, nations that ban gambling will require ISP to block users from accessing the metaverse. 
  • enforce VPN blocking technology for users who try to bypass restricted IP addresses.

User: 

  • Play games with only trusted users and the community.

Mitigation Strategies for Risk 2

Legislature: 

  • Require organizations to adopt electronic identity verification (eIDV) solutions for compliance with local legislation.

Provider: 

  • The service provider should enforce identity management service to verify age and nationality to filter fake accounts, minors, and users who are illegal to play per their jurisdiction.

User: 

  • Play games with only verified profiles. It may also prevent creating multi accounts for interoperability and easier access to the metaverse.

Mitigation Strategies for Risk 3

Legislature: 

  • Develop a process and regulation through organizations such as ISO for reporting cybercrime.

Provider: 

  • Service providers should be mandated to encrypt personal and financial data both at rest and in transit to secure data. Adopting blockchain and identity as a service must be implemented to allow any financial transaction for auditing purposes.

User: 

  • Regulations that protect consumers may not be applicable due to jurisdiction. Users should avoid committing financial transactions without unverified profiles.

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Citations