|An Australian online casino, My Casino, has announced that it has been the victim of a 'sting' operation that cost it A$4.3 million ($2.36 million). Fake credit cards were used in the scam but few details were forthcoming as to how the fraud was carried out. The theft took place between April and July last year. |
The credit card fraud resulted in a statement being made to the Australian stock exchange: 'The past year has seen the rise and fall of the share prices and confidence in many dotcom companies and My Casino has been no exception. However, unlike other dotcoms, our problems were not due to over-optimistic expectation, but from a well-organized fraud.'
Last July, My Casino had to disable its credit card processing system in order to upgrade to something better. The company had thought the rapid increase in the number and value of the transactions it had been handling over its website was a sign of business growth but it was down to the crooks, and not a rush of new gamblers signing up.
Naturally, this sort of thing does little to engender customer confidence, the bedrock of the online casino industry. My Casino said the scam had 'severely undermined the marketing position of the casino in international markets.'
The casino recorded a betting turnover of over $1 million in the last quarter. According to the MyCasino.com web site, the casino uses “the best firewall currently available.” The integrity of the financial transactions is ensured by means of a 128-bit VPN connection to our front end processor. All financial transactions are handled 'offline' and players' credit card data is not stored in the system.'
Customers were protected as only fake credit cards were used and it looks like the casino that had to stand the losses.
Three directors have already resigned from the board of My-Casino.com.au since August.
To put the size of the fraud into perspective, the company made A$3.5 million ($1.92 million) for the year ending December 31 – the fake credit card scam exceeded the company's revenues.