Fraud is the broad term that refers to all cases of theft by deception. Not every theft case is a fraud case – for an act to be considered a fraud, the offender must use some type of deceptive behavior to convince the victim to comply with his or her scheme.
In the world of online gambling, fraud can go either way. Unscrupulous gambling operators might try to rip off honest players, and some players might try to get around a site’s legal operating procedures for their own gain.
Online casinos and their customers can both be victims of fraud. In some cases, the crime would be labeled an act of computer fraud, and in others, it is considered a case of consumer fraud. The difference between these types of fraud is what the offender used to commit the fraud.
Players Defrauding Casinos
New Jersey online casinos use geolocation software to ensure that all players are physically located in New Jersey. So far, this security measure has worked well in most cases – too well, in fact, to the point where players attempting to log in from areas close to New Jersey’s border were denied access to some online casinos. But this software isn’t foolproof. A crafty player with access to an online server can bypass geolocation blocks by making it appear like he or she is locating in New Jersey through some IP address manipulation.
This type of action falls under the category of computer fraud. N.J.S.A. 2C:20-25 defines computer fraud as any act of fraud that employs a computer or the internet. It covers all aspects of computing that can be potentially used as part of a fraud scheme: software, hardware, internet connection, computer systems, drives, and the data stored within computer drives. The definition of this law is broad: if any of the aforementioned computer-related items are used in an act of theft through the use of deception, the defendant is guilty of computer fraud.
Gambling in a casino that one is not authorized to access is stealing, even if the player does not win any money.
Casinos Defrauding Players
A more pressing concern than unauthorized players trying to get in is criminals preying on naïve gamblers by setting up fake casino websites that attack victims’ computers with malware or look identical to legitimate sites, causing victims to think they are entering their personal information into a trusted website.
This type of crime would be categorized as consumer fraud, rather than computer fraud. Although the fraud occurred over the internet, impersonating a casino to steal from players falls under the category of affirmative misrepresentation, an act of consumer fraud as defined in N.J.S.A. 56:8-2.
It’s not the legitimate casinos that the state needs to be concerned about – it’s fraudsters masquerading as legitimate casinos and hackers trying to get around the software designed to keep them out.
Keeping The Industry Honest
The New Jersey Division of Gaming Enforcement is a state-run commission that regulates the legal gambling industry. Part of its role in maintaining the industry is preventing and prosecuting all cases of fraud that occur.
When the Casino Control Act was updated in 2011 to begin the test period of online gambling in New Jersey, the Division of Gaming Enforcement took on new roles. It is now responsible for all registration and licensing of casino employees and gaming vendors. It also handles consumer issues related to New Jersey online casino gambling.
Sands Casino Hacked
In early 2014, Sands Casino in Pennsylvania fell victim to a cyber attack, which stole many customers’ personal information from the casino company’s online database. Players in New Jersey took this as a warning of what could happen with sensitive data stored online. Although less than 1% of the Sands’ player accounts were affected by the attack, the hack demonstrated that online data protections aren’t impenetrable.
Following the attack, Sands Casino took its websites offline to retool their security measures. A week later, they were back up.
Opponents Point to Fraud as a Reason to Ban Online Gambling
Opponents of legal online gambling often point to the potential for fraud as a reason to ban it outright. Sheldon Adelson, one of the most vocal critics of online gambling, has warned about the danger of potentially falling victim to an online gambling fraud.
His Internet Gambling Control Act, a bill for the United States Congress to reassess and potentially redefine the Wire Act to include a ban on all forms of internet-based gambling includes a passage referencing the potential for fraud to occur on gambling websites. Part of the bill is for the FBI to investigate just that: “The potential for use of Internet gambling sites for money laundering; including through players acting in concert in online poker and other games;” “The potential use of Internet gambling sites for cyber-crimes;” and “Whether the technology exists for participants to manipulate online poker and other games for fraudulent of other purposes.”
Looking back on what happened at the Sands Casino, Adelson’s property, the prospect of cyber crime occurring in New Jersey’s online casinos isn’t completely unfathomable. The best law enforcement can do in the Garden State is monitor all online gambling activity closely and take a proactive approach to catching and prosecuting offenders.
Avoid Becoming a Fraud Victim When You Gamble Online
The easiest way to avoid becoming a victim of fraud is to guard your personal information tightly and make sure that any site you enter it into is an approved, safe website. Make sure you research every online casino you consider before entering any information – just do a quick entry into a search engine and read reviews of the online casino you’re considering playing at. If it’s a scam, there will most likely be reviews online saying it’s a scam.
Even if there’s no information about a particular casino website to be found, don’t do anything you’re not comfortable doing. Finding no information can be as bad a sign as finding a bad review – in this day and age, a legitimate business will have reviews available somewhere online.
The internet is a relatively new place, and the twenty-first century has seen lots of changes to existing laws to include how they’re enforced on the internet. Just like with any public place, use your street smarts. If something seems too good to be true, it is. Be careful out there.