New research into cyber crime suggests the global, $10-billion-a-year online gambling industry is regularly held for ransom by sophisticated hackers and organized criminals.
A researcher at St. Mary's University in Halifax has just released his findings of a study conducted over the past five years into what he calls "cyber extortion."
John McMullan, a criminologist at the university, says online gambling sites are targeted for "digital shakedowns" at peak times, such as the approach of the Super Bowl and other major sporting events.
Anonymous online hackers attack betting websites, swamp them with unwanted electronic messages and virtually shut them down, he said. They then go to the site operators and typically demand $40,000 to $60,000 in ransom in order to release the website so that users can return and keep playing.
McMullan said the hackers often have a business hierarchy, running organizations that are global and invisible, with the masterminds recruiting people, often via e-mail, to carry out the crime, never meeting in person.
"They recruited different people, like hackers and worm writers, and crackers. There were people who were involved in picking up the money, bankers who were able to move the money around," said McMullan, who presented his research at Nova Scotia's Responsible Gambling Conference in Halifax earlier this month.
McMullan said there have been a number of arrests in Latvia, Russia and Eastern Europe. In recent years, online betting websites have beefed up security, but McMullan said the criminals are getting smarter, too.
"For every ability to develop a better security architecture, you can be sure the hackers and cyber extortionists are out there scanning your security, trying to find out how to defeat it."
He said these modern criminal groups use the anonymity of the internet, as well as different bank accounts and shell companies, to skim the profits from online gambling.
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