Ontario iGaming Launch: First Anniversary Risk Report

Intro

GeoComply highlights risk numbers behind the successful first year of regulated iGaming and online sports betting in Ontario

The first year of regulated iGaming and online sports betting in Ontario has been a resounding success, with quarterly figures from the Alcohol Lottery & Gaming Commission showing total player accounts set to exceed one million and gaming revenue on track to smash half-a-billion Canadian dollars.

There is no doubt that Ontario’s consumers are better protected in the regulated market by responsible licensed operators overseen by a professional regulatory body.

Statistics suggest legitimate operators have been able to capture a significant share of the market from offshore operators. An Ipsos poll found that 85 percent of respondents in Ontario gambled on regulated sites after market launch. 

As the leading provider of geolocation and anti-fraud services to Ontario’s licensed iGaming and online sports betting operators, GeoComply’s data provides compelling evidence that Ontario’s regulated market is attracting attention from around the world. 

Aggregate data from GeoComply’s services to its Ontario operator customers since the regulated market launch in April 2022 reveals that: 

• Over 500,000 users attempted to illegally log in 11 million times to Ontario operators from around the world
• Over 54,000 users from within the US have attempted to log in 305,000 times to Ontario operators
• Over 3.3 million location spoofing attempts into Ontario operators have occurred from around the world

GeoComply’s data also reveals that Ontario’s regulated market has attracted unwanted attention from fraudsters. 

GeoComply’s Ontario operator customer data since launch shows that: 

• Over 219,000 devices have been prevented from gambling for fraud reasons 
• GeoComply has detected 1,045 fraud rings affecting multiple operators

GeoComply Director of Risk Services Danny DiRienzo comments, “Online fraud is not uniquely a sports betting or iGaming problem. Recent data shows that cybercrimes were up 50 per cent 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.” 

According to aggregated data from Ontario customers, since launch, GeoComply’s services have prevented the following from infiltrating the regulated market:

• Over 127,000 devices known to be associated with fraud 
• Over 56,000 devices with multiple users (typically a sign of bonus abuse)
• Over 34,000 devices using illicit software (normally to hide location)
• Nearly 1,500 devices that have been jailbroken or tampered with

GeoComply’s risk data for Ontario operators is in line with similarly-sized US states that have regulated iGaming and/or online sports betting. The fraud attempts are mostly identity theft and bonus abuse, with some account takeovers and credit card chargebacks.

“Ontario is such a large market and the opening of any market results in bonus offerings attracting fraudsters. This, coupled with the traditional gray 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,” explains DiRienzo.

“GeoComply remains vigilant alongside our operator partners,” continues DiRienzo. “During the last 90 days, a third of GeoComply’s fraud investigations have involved Ontario operators, despite Ontario accounting for far less than a third of our overall traffic. The investigations have affected most Ontario operators, so fraudsters are targeting almost everybody.”

Case Study

Toronto apartment targets 15 operators

When we were alerted to 110 users transacting with one operator from the same apartment block in Toronto, GeoComply immediately launched an investigation.

The GeoComply Fraud & Risk Services team soon discovered that many of the IDs were for out-of-province addresses, and an unusually high percentage were for 70 or 80-year-olds, telltale signs of stolen identities and bonus abuse. 

This was soon confirmed when we 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. While some people travel a lot, the likelihood of so many converging on one location is slim,” comments DiRienzo.  

Further analysis revealed hundreds of usernames with similar formats. For example, UserName1234, UserName5678, Username2583 etc. These were clearly fraudulent attempts to collect and exploit promotional bonuses. 

The initial operator blocked 98 per cent of the users operating from the building, while another permanently closed 186 out of 192 accounts from the address. An Exclusion Zone was set up around this address so that all new users in the location are monitored.

Hot Games

Looking at the relevant data from the operators that GeoComply supports, we garnered the following insights with regard to the Blue Jays, Maple Leafs, and Senators. 

MLB 2022: Toronto Blue Jays 10 – 8 Texas Rangers

On April 4, 2022, Toronto baseball fans clamoured to place their first legal bets on the Blue Jays’ opening game of the MLB season.

Twenty per cent of all unique player accounts in Toronto placed a bet on the game, accounting for 10,600 transactions or 15 per cent of all bets placed in Toronto on game day. This heatmap of GeoComply transactional data shows the intensity of the betting action at the Rogers Centre arena.

NHL 2022: Maple Leafs trump Senators

Ontario’s NHL teams were both triumphant in their first home games of the season, with Maple Leafs beating Washington Capitals and the Senators winning against Boston Bruins.

However, Maple Leaf’s fans are more enthusiastic about betting on their team than those from the capital. There were around half-a-million geolocation transactions for both games. However, Toronto citizens accounted for 27,500 out of the 124,000 who bet on the Maple Leaf’s game. Only 2,700 of the 114,000 betting on the Senators game were from Ottawa.

GeoComply is the trusted provider of geolocation verification and fraud-prevention solutions for approved Ontario iGaming and online sports betting operators. Its data provides a unique view of the Ontario market since it launched in April 2022.

GeoComply’s data does not purport to be definitive or represent the entire market in Ontario or any other jurisdictions but is intended to provide general insights into relevant market dynamics.