Wednesday 1 March 2017

The Russians invented a brilliant way for cheating slot machines and the casino has nothing to oppose them

In June 2014 Accounting of Lumiere Place Casino in St. Louis noticed that some slot machines for just a couple of days seemed to have gone mad. Approved by the state software on which these machines work, gives the casino a fixed mathematical advantage, and therefore gambling establishments know how much they will earn in the end: for example, 7.129 cents for every dollar spent by players. You can check top casino sites for real money where you can try to do the same. But June 2 and 3, some machines in the Lumiere Place began to throw a lot more money than they received, although no major jackpots were not. This deviation in the gaming industry jargon is called a negative deduction. And because the program is not subject to sudden bouts of madness, the only possible explanation was that someone swindles.

Casino Security video and I looked through some time figured attacker. It appeared to be a dark-haired man of thirty in a T-shirt with a square and a brown wallet. Unlike most gaming fraud, he did not seem to do anything with them to the selected slot machines. All of these machines were rather old production model of the Australian company Aristocrat Leisure. This person just press the button, playing the "Star tramp" and "Pelican Pete", and he at that time applied a sneak your iPhone on the screen of the machine.

After playing for a few minutes, he left, and then back again to try their luck. And then he began to take furiously. he received as many as 1300 at 20-60 dollars spent, and then finished the game and went on to another machine, where it all starts over again. For two days his winnings totaled more than 21 thousand dollars. The only oddity in his behavior was that he had long held a finger over the button "Start", and then pushed her sharply and quickly. Usually the players do not make such long pauses between strokes.

June 9 casinos to share their observations with the Gambling Commission of Missouri, announced that an alarm throughout the state. Some casinos soon discovered that they, too, had been deceived in a similar manner, although there came other people, not like a man who cheated in the Lumiere Place. In each case, the attacker applied a cell phone to the machine model Aristocrat Mark VI, and then pressed the button at random.

After analyzing data on the rental car, Missouri authorities have calculated that the fraud involved Lumiere Place Casino 37-year-old Russian citizen Murat Bliev. June 6 Bliev flew to Moscow, but the St. Petersburg organization, in which he worked (it - dozens of employees who take advantage of "one-armed bandits" in the world), quickly sent him back to the US, where he joined another group of swindlers. The decision to send Bliev again in the United States became a rare oversight of the enterprise that is quietly stealing millions, breaking the most complex and valuable algorithms gaming industry.

From Russia with fraud

Russia is one of the main centers of fraud with slot machines since 2009, when the country outlawed almost all gambling. Vladimir Putin, who was then the position of the head of government, supposedly believed that such measures will reduce the influence of the Georgian organized crime. Because of the prohibition of thousands of casinos have been forced to sell at bargain prices their slot machines to those customers whom they could find. Some cheap "one-armed bandits" were in the hands of fraudsters who really wanted to learn how to download new games in the old board. Other machines were in the hands of the bosses Bliev in St. Petersburg, and they have tried to crack the program codes of these machines in search of vulnerabilities.

By early 2011, many casinos in Central and Eastern Europe began to detect cases where the production of slot machines of the Austrian company Novomatic paid extremely large winnings. Novomatic's engineers could not find anything that would indicate a burglary. Therefore, they suggested that fraudsters figured out how to predict the behavior of slot machines. "Through targeted and long-term monitoring of the individual sequences of the game can be expected to find a certain" regularity "in its results", - informed the Novomatic its customers in February 2011.

To identify these patterns, a huge effort is needed. Game slot machines run a program called "pseudo-random number generators" (PRNG). They deliberately give a completely incomprehensible and puzzling results. State regulatory bodies such as the Commission on Gambling Missouri checked every such algorithm in the technical condition and perfection, and only then give the casino permission to use them.

However, it suggests the prefix "pseudo", these numbers are not entirely random. 

Ladbrokes loses £71m court fight with UK taxman

UK betting operator Ladbrokes owes the government £71m after losing its court fight over a bogus tax avoidance scheme.

In December 2015, HM Revenue & Customs (HMRC) won a £54m judgment against Ladbrokes after the company admitted engineering a deal between two of its divisions that resulted in an artificial share price drop of one entity that allowed the other to claim a tax loss.

The deal, which was crafted by accountants at Deloitte, took advantage of a legal loophole that originated in 2008 and was closed that same year after HMRC realized its vulnerability. HMRC pursued legal action against all 11 firms that attempted to take advantage of the loophole.

Ladbrokes appealed the 2015 court ruling, saying the company had a “strong argument” that it had done nothing wrong. But the Upper Tribunal of the Tax and Chancery Chamber has since disagreed, dismissing all three of Ladbrokes’ legal arguments and ordering the bookie to cut HMRC a £71m check.

HMRC compliance director Jennie Granger couldn’t resist twisting the knife, saying Ladbrokes “would have been better off just paying the tax” instead of losing even more money by paying its solicitors to mount the appeal.

In keeping with government officials trotting out the lame gambling metaphors when celebrating these types of victories, Granger said Ladbrokes had “gambled and lost when the odds of success could not have been lower.“

Ladbrokes has been restrained in its public response to the ruling, with a spokesperson saying only that the company had acknowledged the Tribunal’s ruling and was considering its options going forward.

The HMRC is no stranger to tax fights with UK gambling operators, having waged interminable battles with varying degrees of success. A notable loss came in December, when Sportech ultimately prevailed in a seven-year fight over improperly assessed value added taxes. That case swung back and forth until the Supreme Court rejected HMRC’s final appeal, allowing Sportech to finally collect its £97m due.

Coral launches dynamic video advertising from Fresh8 Gaming

UK bookmaker Coral today announced the launch of the world’s first dynamic video advertising product for online gaming. Partnering with Fresh8 Gaming, Coral will use the Fresh8 technology to power auto-generated videos with real time offers and odds across their digital video campaigns including on Facebook and YouTube.

Coral launches dynamic video advertising from Fresh8 GamingshThe Fresh8 video platform enables a sports betting operator to personalise video content to any digital end point – social media, pre-roll ads, YouTube, and even in-store. This includes any sport, event, market, bet type, and customer offer – as well as visual content such as logos, backgrounds and any other imagery. The video content is then autogenerated in real time from a live bet feed and served within minutes.

The high fidelity compatible video product also has huge potential for delivery on broadcast TV, in-stadium into fan TV networks, as well as into sports betting shops. The Fresh8 platform enables the most relevant content to be generated for that specific target audience.

Paul Soithongsuk, Senior Mobile Marketing Manager at Coral, said of the deal “The automation and simplification of the video production process is a total game changer. The Fresh8 platform will allow us to build real time adverts ensuring that we are always serving the most relevant content to our entire digital audience. This relevance is especially crucial in the light of the IGRG code changes meaning we have to be much smarter in our approach to messaging in video outside of free offers”.

Fresh8 Managing Director Andrew Sharland said “We love working with forward thinking betting operators and are excited Coral have chosen us to power their dynamic video and banner advertising campaigns. We know our technology will add huge value both in terms of automation and the the ability to personalise to customer segments and maximise conversion”.

Coral will also be utilising the Fresh8 advertising platform to push dynamic advertising across their display and affiliate advertising partnerships.

About Fresh8 Gaming

Fresh8 Gaming was founded in 2014 and is a technology company that delivers software as a service solutions via a next-generation Ad Serving platform. Fresh8 works with some of the world’s leading gambling operators such as SkyBet, Coral and BetVictor to deliver fully automated and multi-format display campaigns targeted at increasing clients’ customer acquisition and improving the retention of existing users. Fresh8 Gaming also works with globally-recognised media companies such as Sky Sports and 90Min to make content suitable for betting and help operators increase CPM from their gambling partners.

One in six UK adults gambled online in 2016

Roughly one in six UK adults gambled online last year, thanks in part to excitement over a pair of quadrennial sporting events.

The UK Gambling Commission’s latest gambling participation survey shows that 48% of respondents aged 16 years or older reported engaging in at least one form of gambling last year, although this figure drops to 33% if you exclude National Lottery play.

Around 17% reported gambling online, up from 15% in 2015. Here too, excluding the National Lottery pushes online participation down to 13%, but this is up four points from 2015. At least some of the online surge was credited to the UEFA Euro 2016 football tournament and the Summer Olympic Games in Rio.

Laptops remain the online gamblers’ device of choice at 55%, although this was down six points from 2015. Similarly, desktop PC use fell four points to 34%, while mobile phones gained six points to 29% and tablets were up five points to 21%. Men were more likely to gamble on their phone, while women held the edge in tablet use.

While 97% of online gamblers play at home, those in the 18-24 age group were more likely to gamble in multiple locations. The most popular venue for men gambling outside the home was at work, while women were more likely to gamble while commuting.

In-play betting participation remains stable at 26%, but the 18-24 demo’s in-play rate rose seven points to 45%, again, likely due to Euro 2016 excitement.

Online gamblers reported an average of three different accounts with gambling companies, down from 3.5 in 2015. Around half of online gamblers have only one account, while 11% have over five accounts.

Nearly one-third of respondents reported following a gambling company’s social media accounts, with Facebook on top at 26%, (up six points from 2015), followed by Twitter (15%, +4), Google+ (6%, flat) and Instagram (6%, +2).

However, online gamblers remain more likely to make a wager based on advertising (46%) than on a social media post (21%). Television adverts were the most effective at 24%, followed by online ads (21%) and social media (15%). Despite younger demos’ familiarity with social media, 18-24 year-olds were most likely (60%) to be prompted to gamble by advertising.

Only 23% of online gamblers reported reading a site’s terms and conditions, with women and senior citizens the least likely to have read the fine print before wagering. The sheer length of most T&C’s was the most commonly cited excuse for not reading, followed by ‘it’s unnecessary’ and ‘laziness.’ One in five gamblers reported not being aware that T&C’s were available to read.

Only 6% of gamblers have ever self-excluded, unchanged from 2015, but the number of gamblers who reported being aware of the option to self-exclude gained eight points to 37%. The UK introduced new self-exclusion policies in mid-2015. The number of self-identified problem gamblers remains small and relatively constant at 0.7%, up from 0.5% in 2015.

Gambling perceptions took a negative turn in 2016, with only 34% of respondents saying gambling is fair and could be trusted, a new record low and down from 49% as recently as 2011. Ironically, non-gamblers had a more favorable view of the activity.

Nearly two-fifths of respondents associate gambling with criminal activity, while 69% believe gambling is “dangerous for family life.” However, 67% believe people have the right to gamble whenever they want and a defiant 32% maintain that gambling “livens up life.”

Antigua Leisure & Gaming Association offers rescue plan

The new industry body representing Antigua-licensed online gaming operators has laid out its plan to restore Antigua’s position as a premier online gaming licensing jurisdiction.

Nigel Pigott (pictured), president of the Antigua Leisure and Gaming Association (ALGA), recently unveiled the new group’s website Alga.ag. The site contains an unsparing assessment of the factors that contributed to Antigua’s decline as a licensing jurisdiction, while offering detailed proposals for assisting the government in turning this ship around.

Antigua has endured a decade-plus decline as an online gambling licensing hub, from a peak of nearly 200 licensees to just eight. The ALGA believes it’s not too late to pull Antigua back from the brink, but this will require “a fundamental re-evaluation of the country’s approach to the sector and its value-proposition to both existing and potential licensees.”

ALGA president Pigott told CalvinAyre.com that while restoring Antigua’s gaming industry to its former glories will be difficult, “there is no reason why the industry, the government and regulators should not come together to advance the structure of things to a more modern competitive international standard. Allowing Antigua to showcase all the great things that historically made and will continue to make it a premier place to do business.”

NEW LICENSES
The ALGA lays out six main recommendations, starting with the government forming a working group to engage with the ALGA and industry stakeholders to establish new categories of gaming licenses. The ALGA believes that “more granular and specific licenses with less onerous individual fees would increase the licensee base while removing a significant barrier to entry.”

ONE STOP SHOPPING
The ALGA believes the lack of a local ‘turnkey’ corporate services infrastructure group is deterring online gambling companies from considering setting up shop in Antigua.

The ALGA wants to work with the government, local law firms, accountancies and other companies to create or endorse an accredited corporate services group to provide a ‘one stop shop’ for everything from license application preparation to random number generator certification to audits and legal support.

INTERNATIONAL COMITY AGREEMENTS
The ALGA also wants to see the government establish international IT comity agreements to resolve Antigua’s inherent bandwidth and connectivity quality constraints.

The ALGA maintains that allowing Antigua-licensed operators to establish production infrastructure, including business process outsourcing (BPO) services, in jurisdictions where it is most efficient for their target markets would help establish Antigua as “the go-to jurisdiction for Asian-facing operations.”

REFRESH ANTIGUA’S IMAGE
Speaking of, the ALGA wants Antigua to reposition itself as the “Gateway to Emerging Markets,” including Asia and South America. This will require the government to modernize the marketing of Antigua’s online gaming proposition, something the previous administration neglected to maintain, leading to an erosion of credibility in the eyes of the global industry.

TAXATION
The ALGA acknowledges that Antigua suffers from a perception that it’s a ‘tax haven,’ and therefore proposes that the government adopt a new corporate taxation model based on 3% of net profit rather than on gross or net revenue, similar to that imposed on international banks under the International Banking Act 2016. This tax would have a floor of US $20k and a cap of $500k per operator.

The ALGA believes this tax plan will encourage businesses to establish themselves in Antigua, with the understanding that the loss-making initial period of any new enterprise won’t have to contend with additional tax burdens. The ALGA also proposes offering licensees tax credits to incentivize the hiring of local employees.

CRYPTOCURRENCY
The ability of Antigua’s online licensees to develop proper international financial services arrangements has been difficult, to put it mildly. This has had a sharply negative effect on operator margins, contributing to the flight of licensees from Antigua.

The ALGA is asking the government to develop and issue a policy regarding Bitcoin and other digital currencies that will encourage licensees from other jurisdictions to consider making Antigua their home.

The ALGA believes that “the adoption of irreversible, auditable, non-intermediated Bitcoin payments enables operators to improve profitability by eliminating third party payment processing fees, improve compliance and auditability, reduce operational costs associated with management of credit card and chargeback fraud associated with traditional methods, and streamline payments operations.”

Bitcoin has its detractors, but the ALGA lays out detailed arguments that swat aside preconceived notions regarding its use, and urges the government to follow the lead of the UK Gambling Commission, which treats Bitcoin transactions as any other approved payment method, subject to the same Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.

Antigua licensees are currently under the thumb of the Financial Services Regulatory Commission (FSRC), which has proposed additional KYC and AML requirements for Bitcoin transactions. The ALGA maintains that there is no incremental risk for Bitcoin deposits beyond that which exists for any other payment processing method.

NO TIME TO LOSE
Antigua’s online industry has been plagued by any number of external factors over the past decade, including the country’s protracted David v. Goliath struggle with the United States at the World Trade Organization.

But, as detailed above, the ALGA believes the means to overcome these obstacles are within the Antiguan government’s powers. Working together, the ALGA and the government can create a perfect storm of job creation, government revenue and economic stimulus through the injection of new capital.

The ALGA has welcomed the government’s plan to establish a new Gambling Authority to oversee industry activity, as the FSRC has demonstrated that it is fundamentally incapable of responding to the needs and realities of online gaming operators.

The ALGA believes the renaissance of Antigua’s gaming industry is possible, but it won’t happen on its own and small, incremental changes won’t be enough. With the government as a willing partner, the ALGA believes Antigua can regain its status as “the most progressive, forward-thinking and respected jurisdiction in the world for remote gaming operators.”

David Baazov insider trading trial to feature anonymous informant

Former Amaya Gaming CEO David Baazov will stand trial on insider trading charges in a Quebec court in November, a judge ruled on Tuesday.

According to a report in The Globe & Mail, Quebec Court Judge Claude Leblond held a hearing on Tuesday during which he set a November 20 date for the start of Baazov’s trial on insider trading stemming from his former role as head of Amaya, the parent company of PokerStars.

The possibility remains that Baazov (pictured), who has pled not guilty to the charges, could strike a deal with prosecutors that would preclude the need for a trial. In the meantime, both prosecutors and Baazov’s legal team are gearing up for a trial that could last up to 13 weeks.

In March 2016, Baazov and two other individuals – fellow Amaya exec Benjamin Ahdoot and former Amaya financial advisor Yoel Altman – were hit with 23 insider trading charges by Quebec securities regulator Autorité des marches financiers (AMF).

Three companies – Diocles Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. – were also charged in the case. The AMF has accused Baazov of using a front to disguise stock trading activity in advance of Amaya’s $4.9b acquisition of PokerStars in 2014.

The AMF has also accused Baazov of engaging in a sophisticated kickback scheme in which he gave advance notice of major Amaya transactions to a number of individuals, including his brother Josh/Ofer Baazov. These individuals’ trading activity earned at least $1.5m in illegal profits, some of which allegedly ended up back in Baazov’s pocket.

The AMF reportedly plans to call around 50 witnesses to support its case against Baazov, including employees of Amaya’s investment banker Cannacord Genuity Securities. Ominously, the AMF also plans to summon an anonymous informant.

Complicating matters for Baazov is the fact that Quebec’s securities act requires that the trial be conducted in the French language. Many of the witnesses don’t speak French but Judge Leblond said preparations will be made to ensure real-time translation of the proceedings, as well as the selection of a fully bilingual judge to hear the case.

It remains to be seen how strong a case the AMF has against Baazov and his co-accused. Last September, Baazov’s lawyer Sophie Melchers got the AMF’s lead investigator to admit that he didn’t actually know the content of messages Baazov sent to his alleged conspirators because investigators had failed to seize it during their December 2014 raid on Amaya HQ.

Baazov resigned as Amaya’s CEO last August but remains the company’s largest shareholder. He has made several abortive attempts at acquiring the company and taking it private, but the last of these attempts fizzled out in December following a series of awkward media stories in which some of his financial backers pleaded ignorance of their involvement.

BTCC chief expects bitcoin’s price to reach $11K in 2020

Bitcoin has yet to show any sign of dropping below its all-time highs, and if executives are to be believed, this trend will continue until 2020.

BTCC chief expects bitcoin’s price to reach $11K in 2020By that time, BTC China co-founder and CEO Bobby Lee expects the price of the popular digital currency to reach between $5,000 and $11,000. Lee, who frequently makes predictions about the bitcoin, tweeted early this week: “Bitcoin price target in 2020; after block halving: USD $5l-$11k assuming $5-$10 million daily flow into #BTC by then. (Today: $2m daily in).”

The entrepreneur also made a note that his “medium-term” price target for the digital currency is $5,600, which, incidentally, is also the number of his followers on Twitter. However, Lee pointed out that bitcoin’s daily inflow, currently between $5 million and $10 million, isn’t a lot, especially when compared to gold’s inflow of $340 million a day.

Lee’s bitcoin price predictions comes several days after BTC China, considered one of China’s ‘Big 3’ bitcoin exchanges, extended the suspension of bitcoin and litecoin withdrawals until March 15 while it upgrades its internal system and comply with the requirements recently set by the People’s Bank of China.

Aside from BTC China, Huobi and OKCoin also halted bitcoin and litecoin withdrawals while they undergo an upgrade to fight “money laundering, exchange, pyramid schemes and other illegal activities.”

Two other companies were also forced to make several changes following PBoC’s harsh warnings. This week, bitcoin mining company HaoBTC announced that it is closing its exchange operation “given the fact that the prospect of a regulatory policy for a bitcoin exchange isn’t clear yet,” while Shenzhen-based bitcoin marketplace BitKan said it will stop new registrations as the company upgrades its anti-money laundering checks.

Bitcoin hits new all-time high

Bitcoin has been enjoying its longest stretch above $1,000—a period that began in mid-February. Since then, the price of bitcoin has been pushing steadily higher, which analysts believe is a clear indication that the cryptocurrency is stabilizing at a new price point.

The digital currency hit a fresh all-time high on Tuesday, when it reached $1,200. But Wednesday saw the bitcoin price pulling back slightly from this level, trading at $1,195.23.

Cybersecurity: a growing focus for gambling operators

BY Leonard Postrado ON March 01, 2017

TAGS: CYBER SECURITY, DDOS ATTACKS

In October 2016, the world has seen the most powerful Distributed Denial of Service (DDoS) attack ever registered in cyber history.

Cybersecurity: a growing focus for gambling operatorsThe destructive Mirai botnet has brought down sites including Twitter, the Guardian, Netflix, Reddit, CNN and many others in Europe and the United States after it hit the servers of Dyn, a company that controls much of the internet’s domain name system (DNS) infrastructure.

What makes Mirai botnet different from other botnets – which are typically made up of computers – is that it is largely made up of so-called “internet of things” (IoT) devices such as digital cameras and DVR players.

Experts pointed out that attacks from Mirai are much larger than what most DDoS attacks could previously achieve because it has so many internet-connected devices to choose from.

Mirai botnet’s destructive force has alarmed most many gambling operators especially since the sector remains vulnerable and most frequently targeted by cyberattacks.

Online gambling companies are very well aware of how attractive the gambling community has become for cybercriminals and how lucrative the gambling-hacking business may become.

That’s why Gaming in Holland has organized a webinar that will bring to the forefront the issue of cybersecurity and how it may affect the gambling industry.

Gaming in Holland said that the webinar will cover cybersecurity related topics such as an overview of the latest trends in cybersecurity; a closer look at the unique challenges faced by the iGaming industry; and How to best prepare for an attack.

“Our upcoming webinar will focus on one of the major topics in the iGaming press, the unique security challenges faced by the industry in an online environment filled with ever evolving and increasingly complex cyberattacks,” Gaming in Holland pointed out.  “The webinar will be non-technical. The focus will be on increasing the visibility of the security risks to gaming IT infrastructure. If you want to know more about different types of cyberattacks and how to mitigate them, this webinar is for you.”

The webinar, which will be hosted by cybersecurity experts Julien Lehmann and Bastiaan Spandaw, will be held on March 8, Wednesday, at 16:00 CET (10:00 EST).