GeoComply: Online Gaming in Ontario Attracts Global Fraudsters

GeoComply’s report shows over 3.3 million attempts to gain illegal access to Ontario’s regulated online gaming sites during the market’s first year of operation.
GeoComply: Online Gaming in Ontario Attracts Global Fraudsters
April 14, 2023

Online fraud is not uniquely a sports betting or iGaming problem. Recent data shows that cybercrimes were up 50% in 2022 across all forms of e-commerce. The success of Ontario's regulated market for online poker, casino gaming, and sports betting has attracted the attention of fraudsters from around the world, according to GeoComply Solutions.

In a report issued to coincide with the one-year anniversary of the market’s launch, GeoComply said aggregate data from its services to Ontario operators show there have been more than 3.3 million location spoofing attempts to gain access to legal online gaming sites in the province.

GeoComply — which also provides geolocation security, fraud prevention, and compliance services for nearly all of the US online sports betting market — added that the data also show that over 500,000 users worldwide have attempted to log in to Ontario sites a combined 11 million times.

That includes more than 54,000 users in the US who attempted to log in to Ontario’s gaming sites about 305,000 times over the past year.

The firm also found over 219,000 devices have been prevented from gambling for fraud reasons.

“Online fraud is not uniquely a sports betting or iGaming problem,” said Danny DiRienzo, director of risk services for GeoComply. “Recent data shows that cybercrimes were up 50% in 2022 across all forms of e-commerce.

“However, our industry’s high standards of compliance put us in a strong position to combat it. Because every bettor must verify their location, we have the data to stop fraud before it gets a foothold.”

One Case Study Cited

GeoComply’s Ontario Anniversary Risk Report revealed that the firm had detected 1,045 fraud rings in the province, each affecting multiple operators.

A case study included in the report shows GeoComply’s Fraud & Risk Services department was alerted to a situation where 110 users were conducting transactions with a single operator from a single apartment block in Toronto.

A subsequent investigation found many of the IDs being used in the transactions had out-of-province addresses, with an unusually high number of players in their 70s or 80s — two telltale signs of fraud. The investigation eventually discovered 696 users had conducted 13,992 transactions with 15 operators from the same apartment block.

“When the users and devices were analyzed, they were linked to login attempts from a vastly disparate group of addresses, including Texas, Louisiana, New York, and even the Dominican Republic,” DiRienzo said. “While some people travel a lot, the likelihood of so many converging on one location is slim.”

GeoComply said the initial operator, which it did not identify, had “blocked 98% of the users operating from the building, while another permanently closed 186 out of 192 accounts from the address. An exclusion zone was set up around this address so that all new users in the location are monitored.”

Fraudsters “Targeting Almost Everybody”

The report also found that GeoComply’s services had prevented the following from infiltrating the province’s regulated market since its launch in April 2022:

  • More than 127,000 devices known to be associated with fraud
  • More than 56,000 devices with multiple users, which is typically seen as a sign of bonus abuse
  • More than 34,000 devices using illicit software, a tactic commonly used to hide location
  • Nearly 1,500 jailbroken or tampered devices

GeoComply said the numbers show operators in Ontario face similar levels of risk as their counterparts in the US. “The fraud attempts are mostly identity theft and bonus abuse, with some account takeovers and credit card chargebacks,” the firm said.

DiRienzo added that the province “is such a large market, and opening any market results in bonus offerings attracting fraudsters. This, coupled with the traditional gray market operations in Canada, resulted in experienced fraudsters hunting bonuses from day one. Anyone with a set of stolen identities could collect bonuses from several operators.

“GeoComply remains vigilant alongside our operator partners. During the last 90 days, a third of GeoComply’s fraud investigations have involved Ontario operators, despite Ontario accounting for far less than a third of our overall traffic. The investigations have affected most Ontario operators, so fraudsters are targeting almost everybody.”

If you or someone you know has a gambling problem and wants help, call the Virginia Council on Problem Gambling (VACPG) helpline at 1-888-532-3500

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