Online gambling company My Casino Ltd has been forced to upgrade its transaction procedures after detecting credit card fraud totalling $2 million.
In a statement to the Australian Stock Exchange (ASX) last week the company said it received notification of rejected credit card claims totalling $2 million forming part of current uncleared transactions of $7.8 million.
"My Casino's checking systems have led us to suspect that these rejected credit card claims are the result of deliberate fraud attempted by individuals using stolen credit card numbers," the statement said.
The need to upgrade was also exacerbated by substantial growth and high turnover which has "extended the processing systems that were in place initially and were based on a lower turnover growth model", the company said.
"The credit card checking procedures used by My Casino and Barclays Bank have recently identified an increasing number of credit card transaction rejections, which have followed this high level of growth."To be completed later this month My Casino described the upgrade as an extensive process that will include additional security controls.
One of the immediate safeguards being implemented with the new system upgrade is for winnings to be credited back into the player's originating credit card account negating the use of a fraudulent account.
"While our overall gaming turnover for August may be impacted by the detected frauds, from mid August we expect our operational growth to be back to normal and our customer base and turnover to continue expanding," the statement said.
"My Casino is in a strong cash position with immediate cash on hand of $5.5 million which is more than sufficient to meet operating cash needs."My Casino reported gaming turnover of more than $50 million in July and is not restricted by Australian laws governing Internet gambling because it operates out of Vanuatu.
No further details about the upgrade were provided in the statement and company representatives were unavailable for comment.
Peter Bridge, managing director of Lasseters Online, which is Australia's first regulated online casino, said it has strict controls in place to prevent fraudulent activity.
"It is important to recognise there are enormous differences between an online casino regulated in Australia and one that is not; we find people will not take the risk of using cards fraudulently with regulated casinos because of the strict controls in place," he said.
Bridge pointed out online casinos in Australia are audited and monitored by the government and Lasseters cooperates with the National Crime Authority to ensure procedural standards are met. Lasseters had the first online, real-time credit card clearance system which it operates in conjunction with the National Australia Bank. More than half of the $5 million the company dedicated to online development was spent on designing security controls for financial transactions.
"There is a full audit trail provided of all transactions through online account information; these accurately record when a player entered and left the casino, the games played, amount wagered, amount won or lost and the amount deposited or withdrawn including all account details," Bridge said.