GeoComply Reports On Fraud Attempts In First Year Of Ontario’s Open Market

Written By Matthew Lomon on April 10, 2023
Online fraud

GeoComply recently released its risk numbers highlights from the first year of Ontario’s open online casino and sports betting market. In that first year, revenue was some $1.4 billion according to iGaming Ontario.

Sporting such high volumes of users, GeoComply found “evidence that Ontario’s regulated market is attracting attention from around the world.”

As a result, the Canadian geolocation compliance and fraud prevention firm had ample data to work with for its report. The results are as follows.

International attention on Ontario’s market

Since the regulated market launch in April 2022, aggregate data from GeoComply to its Ontario operators discovered:

  • More than 744,000 users from around the world have attempted to log in 19.9 million times to Ontario operators.
  • Over 54,000 users located within the United States tried to log in 305,000 times to Ontario operators.
  • Globally, there has been upwards of 3.3 million location spoofing attempts to access Ontario operators.

Location or “GPS spoofing” occurs when someone tries to disguise their location by falsifying the actual geographical location of their device.

Fraudsters want their share

While all the international interest may be interpreted as a testament to Ontario’s resounding success, it doesn’t accurately reflect the reality of a regulated market. And that’s where GeoComply comes in.

  • Over 219,000 devices were denied access to Ontario’s gambling scene for fraud related reasons.
  • GeoComply has detected 1,045 fraud rings affecting multiple operators.

Danny DiRienzo, sirector of risk services at GeoComply spoke about the general uptick in online fraud since the beginning of 2022.

“Online fraud is not uniquely a sports betting or iGaming problem,” DiRienzo said. “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.”

Other GeoComply numbers

GeoComply has stood firm against threats from fraudulent users conning their way into the regulated market. According to aggregated data, GeoComply’s services have prevented the following from infiltrating Ontario operators:

  • Over 127,000 devices connected to fraudulent activity.
  • More than 56,000 devices with multiple users (a common sign of bonus abuse).
  • Greater than 34,000 devices employing illicit software (typically to hide location).
  • Nearly 1,500 devices damaged by jailbreaking or other forms of tampering.

Risk data for Ontario follows a similar pattern as similarly-sized US states in which iGaming and/or online sports betting is regulated. Specifically, most fraud attempts are identity theft and bonus abuse, with some account takeovers and credit chargebacks.

“Ontario is such a large market and the opening of any market results in bonus offerings attracting fraudsters,” DiRienzo said. “This, coupled with the traditional grey market operations in Canada, resulted in experienced fraudsters hunting bonuses from day one, as anyone with a set of stolen identities could collect bonuses from several operators.”

Suspicious Toronto apartment block shut down by GeoComply

Under its constant monitoring and surveillance services, GeoComply was alerted to a suspicious situation involving an apartment block in Toronto. Red flags started popping up when 110 users in the same area began transacting with one operator.

GeoComply’s Fraud and Risk Services team soon discovered that the group of users shared startling patterns of bonus abuse and identity theft. Most IDs registered with the operator contained out-of-province addresses and a staggering amount were for 70 to 80-year-old people.

Suspicions turned to certainty when the team discovered 696 users transacting 13,922 times 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.”

As the investigation moved along, hundreds of usernames following the same pattern rose to the surface. Comical, low-effort usernames such as UserName1234, UserName5678, and Username2583 “were clearly fraudulent efforts to collect and exploit promotional bonuses.”

The initial operator blocked 98 percent of the swindlers, while a second operator eliminated 186 of 192 (96.9 percent) of accounts from the apartment complex. Subsequently, this area is now subject to an Exclusion Zone, which monitors all new users in the territory.

Transaction data for three of Ontario’s biggest pro sports franchises

Geolocation transaction data from the operators which GeoComply supports produced the following insights regarding the Toronto Blue Jays, Toronto Maple Leafs, and Ottawa Senators.

Toronto Blue Jays

Data from April 4, 2022 shows Blue Jays fans pouncing on the opportunity to place their first legal bets.

  • 20% of all unique player accounts in Toronto wagered on the game.
    • This accounted for 10,600 transactions or 15% of all bets placed in Toronto that day.

Bettors were especially active around the Rogers Centre, as the sea of bright red dots on GeoComply’s heatmap suggests intense activity.

Toronto Maple Leafs and Ottawa Senators

Both the Leafs and Senators were victorious in their respective 2022-23 season home openers, but only the data from Leafs fans reflects that.

There were roughly 500,000 geolocation transactions for both games. However, Toronto citizens accounted for 27,500 of the 124,000 who bet on the Maple Leafs game, while just 2,700 of the 114,000 betting on the Senators game were from Ottawa.

As expected, the geolocation heat maps for both venues mirror the accompanying numerical data. Scotiabank Arena in Toronto indicates a very dense zone of betting activity, close to the host site. Meanwhile, the heat map for Canadian Tire Centre in Ottawa illustrates more dispersion amongst wagering action.

Photo by Shutterstock
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Matthew Lomon

Matthew Lomon has been a contributor at Catena Media’s network of regional sites since July 2022. He first broke into covering the legal North American gambling industry with PlayCanada. Since then, Matthew's reporting has extended to PlayMichigan, PlayPennsylvania, and PlayIllinois. Based out of Toronto, Ontario, Matthew is an avid (bordering on fanatic) sports fan.

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