Canadian Gambling Sector Sees Alarming Surge in Suspected Digital Fraud Attempts

In the first half of 2024, Canada witnessed a significant uptick in suspected digital fraud attempts, with the gambling sector emerging as the most vulnerable industry. A recent report from TransUnion Canada reveals that gambling, particularly online sports betting and poker, saw the highest rate of suspected fraud attempts across various industries, with a rate of 9.6%. This rate places gambling slightly ahead of retail, which experienced a 9.2% fraud rate, and government services, which faced a 7.7% rate.

Gambling Sector at the Forefront of Fraud in Canada

The TransUnion report highlights how the Canadian gambling sector, especially since the legalization of online gambling in Ontario in 2023, has been a hotbed for digital fraud. As a result, both operators and players are growing increasingly concerned about the impact on the industry’s trust and overall user experience. The sharp rise in fraudulent activity can erode customer confidence, making it essential for gambling platforms to enhance their fraud detection mechanisms.

In comparison to other industries worldwide, Canada’s gambling sector stands out. Across 19 markets, including countries and regions where TransUnion provides fraud statistics, the average rate of suspected fraud attempts in gambling was 7.2%. Despite a slight global decline in fraud activity in the gambling industry, Canada’s figures surged dramatically, with a 79.3% year-over-year increase from H1 2023 to H1 2024. This was the second-highest rise across all Canadian industries, only behind the logistics sector, which saw a staggering 172.9% growth in fraud.

When looking at the broader landscape, the increase in fraud attempts in the Canadian gambling industry stands in stark contrast to other regions. For example, while the United States reported a higher overall fraud rate of 13.3%, the global gambling industry witnessed a decrease in fraud rates by 9.2% during the same period. This juxtaposition underscores the particularly unique challenges that Canada’s gambling sector faces, requiring a more proactive and robust approach to fraud prevention.

TransUnion’s Call for Enhanced Fraud Prevention Measures

Patrick Boudreau, Head of Identity Management and Fraud Solutions at TransUnion Canada, emphasized the necessity of adopting advanced fraud prevention technologies. “Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences”, Boudreau stated. He stressed that despite the efforts of companies to identify and mitigate fraud, fraudsters continue to adapt and evolve. This reality makes it crucial for businesses, particularly those in the gambling sector, to stay ahead of the curve in terms of security measures.

Boudreau advocated for the integration of modern fraud detection solutions, such as identity verification, IP intelligence, device reputation assessment, and synthetic identity detection. These tools, he suggested, should become key elements of any fraud prevention strategy to ensure safer and more secure consumer interactions.

The increasing fraud rates are not just a concern for customers; businesses, particularly in the gambling industry, are also facing significant financial losses. According to a TransUnion business survey, Canadian companies lost approximately 6% of their total revenue—an estimated $78 billion—over the past year due to fraud-related incidents. The gambling industry, in particular, is grappling with the effects of scams, account takeovers, and synthetic identity fraud.

The most prevalent types of fraud that businesses encounter include scam or authorized fraud, where individuals are tricked into providing valuable information or account access (accounting for 31% of losses). Account takeovers, where unauthorized individuals gain control of personal accounts, make up 19% of losses, followed closely by synthetic identity fraud at 18%.

The TransUnion report paints a concerning picture of the future of the Canadian gambling industry if decisive action is not taken. As fraudsters continue to innovate their tactics, gambling operators must stay vigilant and employ cutting-edge technologies to safeguard their platforms. Businesses that do not prioritize fraud prevention risk not only financial loss but also significant damage to their reputations.

With digital fraud attempts rising across multiple industries, it is essential for the gambling sector to lead by example in fortifying its defenses. Operators must ensure that customer trust is maintained by providing secure, reliable gaming experiences, free from the ever-present threat of fraud.

Source:

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