The Canadian gaming sector is seeing a large increase in suspected digital fraud efforts, up 79.3% year on year (YoY) in the first half of 2024 (H1 2024).
According to a new TransUnion research, the gaming sector, which includes online sports betting and poker, experienced the greatest percentage of suspected fraud of any Canadian industry, with 9.6% of all transactions marked as suspicious.
This sharp increase in fraud exceeded other key sectors, including retail (9.2%) and government services (7.7%). The sharp increase reflects rising concerns in the gaming industry about the security of digital transactions as online gambling expands across Canada.
The gambling industry leads in fraud rates in Canada.
TransUnion investigated 19 locations, and Canada’s casino business stood out for its high prevalence of suspected fraud. While global trends revealed a 9.2% decrease in suspected gaming fraud attempts, Canada bucked the trend, increasing by nearly 80%. This increase in fraudulent behavior has been especially concerning as more players turn to online platforms for sports betting and poker.
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According to the research, the overall suspected fraud rate in Canada was 5.74%, with gambling-related fraud accounting for nearly double the national average.
The heightened danger of fraud is partly due to the growth of online gambling, which has blossomed since the introduction of iGaming in Ontario in 2022. However, this expansion has made the sector a major target for scammers, creating concerns among operators and players alike. Fraud can erode user trust and negatively harm the overall experience, thus organizations must establish effective security measures.
Fraud Types and Business Impact
Fraud in the gambling sector is often classified into three types: scam/authorized fraud, account takeovers, and synthetic identity fraud. In a separate TransUnion poll, 31% of firms reported scams/authorized fraud as the most common. Account takeovers, in which fraudsters acquire access to consumers’ online gambling accounts without their knowledge, were the second most common, affecting 19% of organizations.
As a result of these fraud schemes, Canadian firms across all industries reported losing nearly 6% of their sales, or $78 billion, in the previous year. Gambling operators, who rely significantly on trust and security to keep players engaged, are especially exposed to the effects of these losses.
Calls for Increased Fraud Prevention in the Gambling Sector
In response to these concerning trends, experts advise Canadian gambling operators to emphasize fraud protection systems to protect both their businesses and their customers. Patrick Boudreau, Head of Identity Management and Fraud Solutions at TransUnion Canada, underlined the need for enhanced security measures to resist growing fraud strategies.
“Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences,” according to Boudreau. He emphasized the importance of identity verification, IP intelligence, and device reputation monitoring as part of a holistic fraud protection approach.
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