Canadian Gambling Industry Sees 79.3% Surge in Suspected Fraud in H1 2024

Suspected-Digital-Fraud-Coming-from-Canada-Up-Nearly-11_-Since-H1-2023-Reveals-New-TransUnion-AnalysisThe Canadian gambling industry is experiencing a significant surge in suspected digital fraud attempts, with a staggering 79.3% year-over-year (YoY) increase in the first half of 2024 (H1 2024). According to a new report by TransUnion, the gambling sector, including online sports betting and poker, saw the highest rate of suspected fraud among all Canadian industries, with 9.6% of all transactions flagged as suspicious.

This dramatic rise in fraud outpaced other major sectors, such as retail (9.2%) and government services (7.7%). The sharp increase highlights growing concerns within the gambling industry over the security of digital transactions as online gambling continues to expand across Canada.

Gambling Industry Leads Fraud Rates in Canada

Among the 19 regions analyzed by TransUnion, Canada’s gambling sector stood out for its high rate of suspected fraud. While global trends showed a 9.2% decline in suspected fraud attempts within the gambling industry, Canada bucked the trend with its nearly 80% increase. This growth in fraudulent activity has been particularly alarming as more players turn to online platforms for sports betting and poker.

The report noted that, across all sectors in Canada, the overall suspected fraud rate was 5.74%, meaning that gambling-related fraud was almost double the national average.

The increased risk of fraud is largely attributed to the boom in online gambling, which has flourished since the legalization of iGaming in Ontario in 2022. However, this growth has also made the sector a prime target for fraudsters, raising concerns for operators and players alike. Fraud can damage user trust and impact the overall experience, making it essential for businesses to implement strong security measures.

Fraud Types and Business Impact

Fraud in the gambling industry typically falls into several categories, including scam/authorized fraud, account takeovers, and synthetic identity fraud. Scam/authorized fraud was the most common, cited by 31% of businesses in a separate TransUnion survey. Account takeovers, where fraudsters gain access to users’ online gambling accounts without their permission, were the second most prevalent, impacting 19% of businesses.

As a result of these fraud schemes, Canadian businesses across all sectors reported losing approximately 6% of their revenue—an estimated $78 billion—in the past year due to fraud. Gambling operators, who rely heavily on trust and security to maintain player engagement, are particularly vulnerable to the impact of these losses.

Calls for Stronger Fraud Prevention in the Gambling Sector

In response to these alarming trends, experts are urging Canadian gambling operators to prioritize fraud prevention technologies to protect both their businesses and consumers. Patrick Boudreau, Head of Identity Management and Fraud Solutions at TransUnion Canada, emphasized the importance of advanced security measures to combat evolving fraud tactics.

“Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences,” Boudreau stated. He highlighted the need for identity verification, IP intelligence, and device reputation monitoring as critical components of a comprehensive fraud prevention strategy.

Source:

Suspected Digital Fraud Coming from Canada Up Nearly 11% Since H1 2023, Reveals New TransUnion Analysis, globenewswire.com, October 16, 2024.

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Canadian Study Warns Gambling Ad Regulations Are Moving Too Quickly

This-study-suggests-Canadian-regulators-should-pace-themselves-when-crafting-RG-rulesWithin a year of legalizing online gambling in Canada, a surge in public complaints about the volume and content of gambling advertisements has raised concerns. A new study released by the Canadian Gaming Association (CGA) highlights that regulators may be acting more quickly than the available evidence supports. This could result in policies that don’t adequately address the nuances of gambling advertising and may be overly broad or miss key issues.

The CGA published an academic and policy-focused study, warning that the development of gambling regulations is outpacing the research needed to effectively guide these policies. The study, conducted by GP Consulting with contributions from specialists at Eilers & Krejcik and academics from the International Gaming Institute and Washington State University, examines the current state of advertising for online gambling and sports betting.

Regulations Outpacing Research

The study’s central premise is that the evolving regulatory framework for gambling advertising in Canada is advancing faster than the research base supporting it. This, the report warns, could result in insufficiently tailored rules that fail to fully address the complex issues inherent in gambling promotion. The research team conducted a “rapid review” of 41 academic studies related to online gambling advertising and responsible gambling programs. This review is meant to serve as a resource for regulators and stakeholders as they navigate the fast-paced changes in the industry.

Ontario Leading the Charge

Ontario became the first province in Canada to launch a regulated online gambling market in April 2022, and now other provinces, such as Alberta, are expected to follow suit. Ontario’s Alcohol and Gaming Commission (AGCO) has already revised its rules on gambling advertising multiple times. Notably, a ban on the use of celebrities and athletes in gambling advertisements came into effect in February 2024, and Canada’s parliament is currently considering stricter regulations regarding when gambling ads can air on television.

The research recommends that Canadian policymakers pursue more in-depth studies in several key areas, including responsible gambling advertising, consistent measurement of exposure to ads, and the effects on vulnerable populations. The study also stresses the importance of avoiding one-size-fits-all approaches, noting that gambling advertising research from other countries, such as the United States or Australia, may not directly apply to Canada’s unique market.

Key Themes for Responsible Advertising

The authors identified five essential themes that they believe are necessary for ensuring that gambling advertising is both effective and safe:

  1. Responsible Messaging: Advertisements should avoid making false promises or encouraging excessive gambling. The study suggests that campaigns should focus on promoting responsible play rather than depicting gambling as a way to easily win big.
  2. Avoiding Vulnerable Audiences: Ads targeting youth or other vulnerable groups should be strictly limited. Regulations in Ontario already reflect this, with the ban on using celebrities or athletes in promotional materials.
  3. Promotion Restrictions: The report suggests restricting the use of enticing terms like “risk-free” in promotional content, with such offers limited only to consumers who have opted into receiving marketing communications.
  4. Affiliate Accountability: Gambling operators should be held responsible for the actions of their affiliates, ensuring that all marketing practices adhere to regulatory guidelines.
  5. Direct Marketing Controls: Gambling operators should limit direct marketing to individuals who have explicitly consented to receive such communications.

The study places these themes within the broader context of regulatory frameworks in other jurisdictions, such as the United Kingdom, Ontario, Denmark, Michigan, and New Jersey. The UK is considered to have the strictest rules, with Ontario following closely behind and Denmark, Michigan, and New Jersey rounding out the list.

Ongoing Debate and Need for Caution

The CGA’s research arrives at a critical time in the Canadian gambling landscape, as debates continue about how best to regulate gambling advertising. Although Bill S-269, which calls for a national framework for sports betting advertising, is currently stalled in federal parliament, the issue remains at the forefront of industry and government discussions. The report highlights the risk that regulations may be shaped more by public opinion and social pressures than by solid empirical evidence.

The research team emphasized that policymakers need to strike a balance between regulating gambling ads and ensuring that rules are grounded in fact-based evidence. “The approach to regulation in Ontario was shaped in part by the necessity to integrate grey market operators into a regulated framework,” the researchers noted, suggesting that regulatory bodies should remain flexible as the market continues to evolve.

Future Research Priorities

The study also lays out a research agenda for further investigation into several areas, including how to better measure the impact of gambling ads on consumer behavior, how cultural factors influence advertising effectiveness, and the challenges of conducting research in real-world settings. The authors call for more targeted studies that can inform future regulations with greater precision.

Source:

CGA research: gambling ad regulation misaligned with evidence, canadiangamingbusiness.com, September 20, 2024.

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Canadian PowerPlay Launches New Website with Enhanced Gaming Features

powerplay_launches_new_icasino_sports_betting_website_in_ontarioOntario has 53 licensed gaming platform operators, each vying for a share of the lucrative CA$2.4 billion (US$1.7 billion) market, as reported by iGaming Ontario’s revenue figures for this fiscal year.

In a recent analysis, EKG predicted that a fully regulated Canadian market, excluding gray market participants, could reach a value of $9.2 billion, with icasino expected to dominate. Consequently, operators in this market are under constant pressure to innovate and enhance their offerings.

PowerPlay.com, one of these licensed operators, has recently unveiled its new Canadian website, designed to elevate the gaming experience for its users. The revamped site boasts hundreds of new casino games and innovative features like player props and the same game parlays in its sportsbook. The aim was to create a more intuitive layout and user-friendly interface, facilitating easier navigation and bet placement for players.

Enhanced Sports Betting Features

“The Same Game Parlay promises to be a hit, allowing players to bet on multiple events within the same game to compound their odds for a potential big payoff,” stated Bill O’Brien, sportsbook manager for PowerPlay. “These parlays can include popular player props, such as who will score or how many shots a player will get, beyond just betting on the game result. This is the next level of sports betting.”

Expanded Casino Game Offerings

On the casino front, PowerPlay has introduced a variety of new table games, slots, and live dealer casino games. According to PowerPlay CEO Dean Serrao, their global teams have worked tirelessly to ensure the best possible site experience for players. “The fact that players can now seamlessly access the platform across multiple localized markets will further enhance that experience,” Serrao added. Canada has been a core market for PowerPlay since its inception in 2018.

Global Reach and Localized Experience

PowerPlay’s commitment to enhancing the player experience is evident in their efforts to provide a seamless and engaging platform. The new website’s intuitive design and user-friendly features are aimed at making it easier for players to navigate and place bets. This commitment to quality and innovation is what sets PowerPlay apart in the competitive Canadian gaming market.

With the launch of its new website, PowerPlay.com is poised to offer Canadian players an improved and more enjoyable gaming experience. PowerPlay aims to remain a leading player in the regulated Canadian gaming market by continually evolving and improving its products and services.

Source: “PowerPlay launches new icasino, sports betting website in Ontario”, CDC Gaming Reports, June 17, 2024.

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Canadian Casino Forced to Close After Pipes Burst

Playtime Casino, located on Water Street in Kelowna, British Columbia, was overcome by water this week. Pipes burst and water flowed onto the floor and outside the building.

Playtime Casino Kelowna
Playtime Casino Kelowna, pictured above. The Canadian gaming property closed temporarily after pipes burst. (Image; Playtime Casino)

Kelowna Capital News reported that the flooding caused the gaming property to shut down for about a half hour on Sunday afternoon.

Local firefighters responded to a report of a broken sprinkler head at the property at about 3:30 p.m., according to the local news outlet.

Visitors were allowed back on the gaming floor after the water was cleaned up, and the casino was operating normally on Monday.

Cold Temps Blamed

The burst pipes allowed water to flow from the second floor of the gaming property to the outside and onto Water Street, according to Castanet, a local online news site.

No official damage estimate was released by the casino, but the repair costs were believed to be minimal. No injuries were reported.

Casino General Manager Clarissa Pruden told the news site that pipes running between the casino’s kitchen and its parking facility had frozen because of cold temperatures. Temperatures in Kelowna on Sunday ranged between 28 and 34 degrees, according to AccuWeather.

Clinton Wood, a casino visitor, told Castanet that he was playing a table game on Sunday afternoon when an alarm went off and officials ordered all visitors to leave.

Water was running all over the place and onto the street below by the parkade,” Wood recalled. “We got a pretty good car wash. All these people making all that money, and then the alarm went off. I joked that we were making too much money.”

He added there were “quite a few people” who were there at the time playing table games and slots.

Playtime Casino Kelowna features more than 450 slot machines along with a variety of table games, including blackjack, e-roulette, ultimate Texas hold ’em, and EZ baccarat.

Kelowna is located some 242 miles east of Vancouver, Canada.

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Cyberattack – 14 Canadian Casinos Shut Down Since April 16

cyberattack_14_canadian_casinos_shut_down_since_april_16Canada’s Gateway Casinos & Entertainment Ltd. has officially confirmed that the company has been the subject of a cyberattack. All 14 of the company’s casinos in the province of Ontario were shut down starting with Casino Rama Resort which closed on April 16th. The casinos were hit with a ransomware attack that reportedly created an IT outage.

When Casino Ramma was shut down abruptly at about 1 p.m. CDT on Sunday the 16th, the company only said that an IT outage was to blame, not what caused the outage. All gaming operations were shut down with the company statement reading only: “Gateway casino sites across Ontario experienced a system-wide IT outage.”

Restaurants, Hotel Still Open at Casino Rama

The casino’s Instagram feed most recently stated: “Casino Rama Resort’s Hotel, Balance In Life Spa, Weirs, and St. Germain’s restaurants remain open. St. Germain’s is open Wednesday – Sunday.”

Very little more information was meted out over the next several days until Gateway announced the reasoning behind the closures on Friday, nearly a week later. The company now says that it has no knowledge of any confidential or private information being compromised. Investigation of the incident is still underway with many of the firm’s 7,000 employees being idled.

iHeart Radio was reporting on Friday that all casinos would remain shuttered indefinitely while cyber professionals do their work to reassure the integrity of the systems.

The Chris de Burgh concert scheduled for Friday was postponed until April 27. The Quiet Riot, Warrant, and Helix concert scheduled for Saturday was reset to October 7. All tickets purchased through My Club Rewards and Ticketmaster will be valid on the new dates. No mention of refunds was made. The event center st Casino Rama can seat up to 5,000 people.

The Friday announcement confirmed that a criminal breach had occurred and that all of the casinos would remain closed through the weekend at a minimum. As of Sunday evening, no change had been announced.

The company website still stated the following which was initially posted on Friday, April 21: “Gateway Casinos and Entertainment locations in Ontario will remain closed through the coming weekend as we continue to work on resolving a cybersecurity incident and put in place the plans for reopening at each location. While we cannot confirm a re-opening date at this time, we continue to work with all relevant parties to do everything we can to restore our IT systems, reopen our sites, and get our employees back to work.”

Not all cash has stopped flowing for the company however as 15 other casinos in different provinces remain open.

Catalyst Capital Group is the company’s majority stockholder and gateway manages the gaming venues for the respective provincial governments where they operate, sharing revenues with them which is used for the common good.

The company announcement also stated: “We want to reiterate that we have notified the relevant privacy officials, law enforcement, and government regulators about the cyber incident.”

30 Year History in Canada

Last year, Gateway celebrated 30 years of participation in the gaming and entertainment business in Canada. Casino Rama opened on July 31, 1996, and remained open continuously until forced to shutter operations during the world health emergency in 2020.

The company said it is working “with third-party experts” around the clock 7 days per week “to determine if there has been any impact on personal information in this case,”

Oddly enough, just a few days prior to the cyberattack, Global News ran an article warning of the increased risk of Russian cyberattacks on Canada in response to the country’s support of Ukraine. While there is no indication yet that Russian state actors are responsible for the most recent attack on a Canadian business it has been identified as a criminal hacking group and that ransom was demanded. Gateway has not confirmed or denied whether it paid and was hit anyway.

Pro-Russian groups have taken credit for several recent cyberattacks in Canada, including on Prime Minister Trudeau’s website and the websites of the Port of Québec and Laurentian Bank.

For a listing of all significant cyber attacks on Canadian government institutions and businesses, see the Kon Briefing (here).

Source: Gateway Casinos Confirms Cyberattack on Ontario IT Infrastructure, Casino.org, April 22, 2023

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