Cybersecurity For Gambling Businesses
The Digital Evolution of Gambling
The gambling industry is evolving from a physical location experience into an electronic, mobile form of entertainment. Gamblers do not have to travel to casinos or crowded sports complexes. Gambling is now a mainstream digital pastime. Many have adopted gambling as a hobby or interest across all age groups. Technical advancements have made friendly competition like March Madness and Fantasy Football even more sophisticated. With new technologies, legal updates, and changes in consumer behavior, gambling is a new pastime that is tremendously easy to access.
Let’s explore the gambling world from basics to recent developments that impact its growth and the scope of the industry
What is considered a part of the gambling industry?
Pursuits such as sports betting, online casino games (like poker, slots, blackjack), lotteries, scratch cards, racing, and eSports wagering through traditional venues and expanding online platforms.
What impacted the growth of the gambling industry?
The Professional and Amateur Sports Protection Act of 1992 (PASPA) prevented states from legalizing sports betting in almost all states in the U.S. The U.S. Supreme Court did away with PASPA in 2018, and 35 states legalized sports betting. Legal gambling also skyrocketed with the development of mobile platforms. You’ve seen ads from DraftKings, Bet 365, and FanDuel. With easy access and instant payouts on 5G, we’ve seen explosive use of digital gambling. 70% of all online wagers were placed on smartphones in 2024. Gambling is easier to do and faster to reap rewards.
The global market has grown to $711 billion (Statista, 2024) and is projected to exceed $876 billion by 2027 (Grand View Research, 2024). Online gambling alone is experiencing a 25% year-over-year growth, especially around major global sporting events like the Super Bowl, FIFA World Cup, and the Olympics.
During Super Bowl LVIII in 2024, U.S. gamblers wagered an estimated $16 billion, a more than 100% increase from 2022. Much of this occurred via apps, with an increasing number of users preferring crypto transactions for their speed and anonymity (Business Research Company, 2024).
Gambling is now more widespread, not just once in a while. Its popularity has expanded due to highly visible sports teams, top athletes on podcasts, streaming, and social media. We see many high-profile personalities endorsing online betting, featuring gambling as more accepted and in demand.
This surge in popularity also brings about an increase in cybersecurity risk.
The Stakes are High
As platforms become more connected, so do the threats they face. There has been a rise in mobile betting apps, cloud-native gambling platforms, and cryptocurrency-based casinos. The gambling sector is a big target for cybercriminals due to the constant flow of money through digital transactions, sensitive personal data, and real-time payouts. The attack surface is growing, and the risks extend beyond businesses. Your clients or individual users may have thousands of dollars linked to gambling wallets or accounts.
We have seen a number of cyberattacks such as the DraftKings 2022 data breach, in which credential stuffing was used to steal $300,000 from compromised user accounts. Social engineering was used to gain access to administrative tools in the 2023 MGM data breach that shut down casino systems that used LinkedIn data to impersonate staff. As businesses benefit from online tools for gambling so do hackers. Unsecured Wi-Fi enables Man-in-the-Middle (MiTM) attacks. Artificial Intelligence (AI) helps cheat systems by predicting outcomes or exploiting gaming systems.
How do you play it safe?
With the risks involved in this industry, gambling businesses are regulated. Organizations have the continual responsibility to be in compliance according to specific regulatory requirements.
What security standards and best practice protocols should gambling businesses implement?
PCI DSS Compliance
Gambling requires the processing of millions of credit card transactions; thus, these organizations must adhere to the PCI DSS. Any company that processes, stores, or transmits card data must adhere to PCI. This includes onsite and online casinos, payment gateways, in-app purchases, and much more. With the new PCI DSS standard in effect, it is essential to achieve compliance with the updated requirements. Some of the changes include new password standards, outsourcing, scanning mandates, automation, software cataloging, principle of least privilege (PoLP), and targeted risk analysis (TRA). Plus, annual penetration testing must be completed.
Privacy
Each states have their own privacy requirements, thus customer data should be managed appropriately. Even if a customer does not reside in a gambling business’ state, the company is still responsible for reasonably securing customer data and personal information.
Cyber Liability Insurance
Many insurance underwriters are requiring businesses to be prepared for cyber threats and attacks. One of the requirements is to have a written, formal incident response plan. If you want to be insured, develop and execute a comprehensive written information security program (WISP) that outlines how a company protects sensitive information and policies and procedures.
Duty of Care Risk Analysis (DoCRA)
This risk approach helps organizations manage information security risks and establish ‘reasonable security’. By defining your acceptable risk, DoCRA identifies the appropriate controls where the burden is not greater than the risk it is safeguarding. Based on an organization’s mission, objectives, and obligations, DoCRA helps organizations be legally defensible in the event of a breach.
Gambling has evolved into a rapidly growing, technology-driven, and socially embedded industry. But with growth comes exposure. Online betting app companies, gambling operators, or casino owners, you are part of a digital ecosystem that is under constant cyber threat.
Learn how to assess your risk profile and how to secure your assets.
KEEPING YOU INFORMED
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