Gaming Sites Face Cyber Extortion

Gretchen Gallen
CYBERSPACE – The ill-fated online gambling industry, while one of the most lucrative industries in the history of the Internet, aside from the porn industry, has been plagued with setbacks, federal regulations, credit card processing snafus, and now a recent wave of cyber extortion that has put a major crimp in the side of many online gaming sites.

And while the online gaming industry is no stranger to extortion, this recent wave of cyber attacks, which started several months ago, is fiercer than previously recorded and has come from all sides of the globe.

In some cases extortionists have managed to shut down numerous gambling sites until hacker demands are met, and according to reports, Eastern Europe is fast making a name for itself as a confirmed hotspot for cyber extortionist gang activity with proven success rates.

USA Today reports that dozens of online gambling sites have recently been bullied into putting up tens of thousands of dollars to avoid denial of service (DDoS) attacks. DDoS attacks are successful because they clog a network's bandwidth with so much incoming traffic that no outgoing traffic is able to escape.

One particular gambling company based in Antigua ponied up a reported $30,000 just so it wouldn't miss out on incoming gambling profits estimated at more than $5 million.

The flood of attacks is being attributed to the fact that gaming sites are often left with little legal recourse and therefore nearly nothing can be done to avoid extortionists other than enforcing internal security measures.

Rather than face a shakedown or the unwanted attention of authorities, some of the smaller gambling sites have reportedly shuttered their doors.

Typical extortionist tactics are delivered via email prior to major sporting events. The threats are sometimes followed by a sample attack on a site so the hacker wields more power and effects a faster response. The currency of cyber extortion is typically in American dollars.

Investigations into the recent trend have confirmed that the extortion cases are so far confined to online gaming sites, although security experts are concerned that hacker extortion could easily spread throughout many online industries that prefer to keep low a low profile and tend to avoid the attention of authorities and the FBI.

According to USA Today, there are an estimated 2,000 gaming sites in existence and since online gambling is close to being illegal in the U.S., there is no public knowledge of where many gambling sites are headquartered.

Recent industry statistics state that online gambling is a $5.7 billion industry that is expected to double over the next two years.

Over the past two years the U.S. has implemented legislative pressures that have forced the majority of online gambling companies offshore, and Congress has been working through a new law that would prohibit the use of credit cards, checks, or electronic fund transfers for Internet gambling.

The U.S isn't the only country to ban online gambling. South African lawmakers recently drafted a National Gambling Bill that calls for a ban on online gambling and advertising for Internet casinos. South Korea and the Philippines have also taken firm stands against Internet gambling.

Although Canada and many other countries continue to embrace the enormous revenue potential of gambling sites.

A recent report out of Washington predicts that the future growth of the online gaming industry will occur mainly outside of the United States, although Americans now account for half of all gaming industry revenues.