The Ontario Provincial Police (OPP) has charged two men from Thunder Bay, Ont., after an investigation discovered a betting scheme in which the use of compromised resulted in fraud exceeding $400,000.
OPP said that gift cards on sale at gas stations in Thunder Bay and Sault Ste. Marie were “compromised” and used to place bets via OLG’s PROLINE sportsbook. “The investigation revealed that thousands of gift cards had been compromised, resulting in fraud exceeding $400,000,” said the OPP in a news release. Police did not state that OLG-specific gift cards were used.
The value of the fraud cited by police relates to the value of the gift cards, Canadian Gaming Business understands. The dollar value of the fraudulent gambling that happened on PROLINE as a result is thought to be significantly lower.
OLG contacted the police last year on suspicion of the activity, and the OPP’s Investigation and Enforcement Bureau (IEB) looked into the matter. The IEB is a division of the police that is embedded within the provincial gambling regulator, the Alcohol and Gaming Commission of Ontario (AGCO).
“The betting pattern was consistent with money laundering, where individuals place large wagers on both sides of a sporting event to ensure minimal gain or loss,” an OPP spokesperson told Canadian Gaming Business. “Further investigation confirmed that the wagers and purchases at gas bar locations were made using fraudulently obtained gift cards. The gas bars and their employees were unaware the gift cards were fraudulent.”
OPP could not provide information on how the cards were obtained nor the specific value of the gift cards, as the case is before the courts. Police did state that there were multiple transactions across many locations in the province. An OLG spokesperson could not say much for the same reason, but confirmed that it notifies and works closely with the IEB and various local law enforcement agencies whenever it suspects fraudulent activity regarding its lottery games.
Two men have been charged with crimes including fraud over $5,000, laundering proceeds of crime, conspiracy, documentation forgery and possession of property. The accused are set to appear before the Ontario Court of Justice later in September.
Ontario embraces betting gift card sales
Image: Canadian Gaming Business
The AGCO’s regulatory standards allow the sale of gift cards that can be used to fund player accounts. Operators must follow regulations to ensure the gift cards are used properly, including conducting player identity verification before depositing and implementing responsible gambling controls including offering deposit limits.
Other iGaming brands in Ontario also sell gift cards. A company under the brand Game On sells cards that can be used on a range of Ontario-licensed operators, including FanDuel, DraftKings and BetMGM (see inset photo), while BetMGM became the first regulated sportsbook to begin selling single-branded gift cards through retailers in Canada earlier this year through a partnership with payment solutions provider TAPPP.
The OLG has a lengthy set of terms and conditions for the gift cards it sells at gas stations and retailers (see feature photo).
