US Gaming Industry Hit Hard by Rise in Online Betting Fraud

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The digital world has once again come under assault from the menacing onslaught of elusive cyber bandits, according to a compelling new report by TransUnion. With malevolent alacrity, internet scammers have sharpened their focus on the rapidly growing internet betting landscape, taking particular interest in the proliferation of mobile betting applications. Alarmingly, the United States has emerged as one of their preferred hunting grounds.

The disconcerting revelations are part of TransUnion’s State of Omnichannel Fraud Report, a comprehensive study that charts the disturbing rise in data breaches across the globe. Last year witnessed a 15% surge in overall breaches, setting ominous new records. TransUnion’s cyber sleuths flagged that a staggering 14% of freshly minted digital accounts were birthed with the insidious intent of fraud.

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“Data breaches have become an ominous bellwether of impending fraud”, TransUnion warned. “Cyber-criminals are lifting credentials at unprecedented levels.” In this volatile digital landscape, knowing with whom you are dealing is increasingly becoming a cornerstone of any organization’s fraud mitigation strategy.

The gaming industry, no stranger to its own cybersecurity nightmares, has faced its fair share of high-profile hacking exploits. Last year, the glitzy Las Vegas Strip was rocked by an audacious cyber heist that targeted its two biggest casino titans – MGM Resorts International and Caesars Entertainment. This digital strike claimed a hefty ransom of at least $15 million from Caesars Entertainment, while MGM Resorts International opted to stand its ground, resulting in a whopping $100 million loss.

Fraudsters have also aimed their sights at online casino, poker platforms, and sports betting websites, wielding cunning strategies and exploiting promotional offers. TransUnion found that online gambling experienced the highest rate of alleged fraudulent activity in several markets, including Colombia, Dominican Republic, Kenya, Puerto Rico, Spain, and particularly in the United States.

Regulated sports wagering mobile apps and websites, due to their necessary collection of sensitive data such as government identification and financial information, become tantalizing targets for cyber criminals. “This early phase new account digital fraud may represent a significant shift in fraudsters’ strategies,” Steve Yin, TransUnion’s senior vice president and global head of fraud solutions, noted. “Instead of using classic tactics to compromise existing accounts, they are increasingly opting to create new accounts for full control, using false identities assembled through harvested credentials from one or more data breaches.”

DraftKings, an online sport betting company, confessed to a breach in late 2022 that resulted in approximately $300,000 being skimmed from 68,000 client accounts. The contravening parties are believed to have accessed clients’ names, addresses, phone numbers, email addresses, the last four digits of their credit cards, their account activity, and even the date their password was last changed.

Hitting home, in the United States, the gaming industry recorded the highest rate of digital fraud in 2023, with a chilling rate of 10.9%. The statistic referred specifically to the location of the victims at the time of the fraud. Similarly, Puerto Rico, a U.S. territory and a vibrant destination for mobile sports betting, also witnessed an uptick in gaming-related digital fraud in the same year, accounting for 10.2% of all cases.