Credit card stings hurt My Casino
By Fran Spencer
ONLINE gaming operator My Casino has admitted it could be facing fraud losses of up to $3.5 million for the six months to June 30 after being hit by a stolen credit card number scam operating out of South-East Asia.
The admission yesterday in a report to shareholders accompanied the release of the company's interim result, which revealed a pre-tax and abnormals loss of $1.1 million.
The company pulled in revenue of $1.4 million in May and June on high turnover from mostly South-East Asian consumers.
An abnormal loss of $5.7 million, which included the $3.5 million provision for fraud losses and $694,000 for gaming software losses, dragged the figure to a bottom line loss of $6.8 million.
The true extent of the losses related to the fraud will not be known until My Casino has received notice from credit card companies on all disputed transactions.
"As much as I'd like to say it didn't happen, it did - it was obviously a very highly organised group, using stolen card numbers and operating out of South-East Asia," said My Casino managing director Gordon McIntosh.
"The problem we had was that the numbers were going through as kosher, because they weren't coming up as stolen cards.
"We said, right we're getting done here so we closed down our existing system for four to six weeks, we appointed Cardstream and we rebuilt the system with updated security."
Cardstream, a UK-based financial processing company, has set up a new security system with reverse card processing, which credits players"winnings back to their originating credit card accounts.
Mr McIntosh said the company did not know what the chances were of catching the fraudsters and was still deciding what steps to take.
"Obviously that's a decision the board will meet and discuss as to exactly how we're going to address it," he said.
To add to the virtual casino's woes, the company discovered deficiencies in its gaming software had allowed some players to increase their odds of winning.
The company solved the problem in May with an upgrade of its software, and has asked software supplier OGS to reimburse the $680,000 in losses incurred as a result of the deficiencies.
However, despite the problems, Mr McIntosh remains upbeat about the company's prospects.
"The company is okay financially . . . we are covered at the bank and we have more than $5 million cash in hand," he said.
"There's no point in dancing around it, we have taken a hit but we have identified the problems, we have fixed them and we are positive now about going forward.
"Substantial business is going to be coming in based on the lessons we have learned so we're very optimistic."
My Casino shares yesterday closed down 2.6¢ to 36.4¢.
www.thewest.com.au/20000913/business/...ness-home-sto5609.html
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My personal opinion:
Ich werte es als positiv und seriös, daß MYC/McIntosh öffentlich in der Presse zu den Kreditkartenbetrügereien Stellung nimmt.
Den Aussis allerdings scheint der A.... auf Grundeis zu gehen: z.Z. -0,06 AU$ bzw. -17%. Scheint so, als würde dort Kapitalverminderung angestrebt, ist MYC denn bei denen ein Abschreibungsobjekt ?
Hoffentlich habe ich nicht bald meine erste Depotleiche ...
Andererseits - ich könnte My Casino dann eventuell übernehmen !?
Aber jetzt Schluß mit Sarkasmus ;-), oder :-(( .
By Fran Spencer
ONLINE gaming operator My Casino has admitted it could be facing fraud losses of up to $3.5 million for the six months to June 30 after being hit by a stolen credit card number scam operating out of South-East Asia.
The admission yesterday in a report to shareholders accompanied the release of the company's interim result, which revealed a pre-tax and abnormals loss of $1.1 million.
The company pulled in revenue of $1.4 million in May and June on high turnover from mostly South-East Asian consumers.
An abnormal loss of $5.7 million, which included the $3.5 million provision for fraud losses and $694,000 for gaming software losses, dragged the figure to a bottom line loss of $6.8 million.
The true extent of the losses related to the fraud will not be known until My Casino has received notice from credit card companies on all disputed transactions.
"As much as I'd like to say it didn't happen, it did - it was obviously a very highly organised group, using stolen card numbers and operating out of South-East Asia," said My Casino managing director Gordon McIntosh.
"The problem we had was that the numbers were going through as kosher, because they weren't coming up as stolen cards.
"We said, right we're getting done here so we closed down our existing system for four to six weeks, we appointed Cardstream and we rebuilt the system with updated security."
Cardstream, a UK-based financial processing company, has set up a new security system with reverse card processing, which credits players"winnings back to their originating credit card accounts.
Mr McIntosh said the company did not know what the chances were of catching the fraudsters and was still deciding what steps to take.
"Obviously that's a decision the board will meet and discuss as to exactly how we're going to address it," he said.
To add to the virtual casino's woes, the company discovered deficiencies in its gaming software had allowed some players to increase their odds of winning.
The company solved the problem in May with an upgrade of its software, and has asked software supplier OGS to reimburse the $680,000 in losses incurred as a result of the deficiencies.
However, despite the problems, Mr McIntosh remains upbeat about the company's prospects.
"The company is okay financially . . . we are covered at the bank and we have more than $5 million cash in hand," he said.
"There's no point in dancing around it, we have taken a hit but we have identified the problems, we have fixed them and we are positive now about going forward.
"Substantial business is going to be coming in based on the lessons we have learned so we're very optimistic."
My Casino shares yesterday closed down 2.6¢ to 36.4¢.
www.thewest.com.au/20000913/business/...ness-home-sto5609.html
-------------
My personal opinion:
Ich werte es als positiv und seriös, daß MYC/McIntosh öffentlich in der Presse zu den Kreditkartenbetrügereien Stellung nimmt.
Den Aussis allerdings scheint der A.... auf Grundeis zu gehen: z.Z. -0,06 AU$ bzw. -17%. Scheint so, als würde dort Kapitalverminderung angestrebt, ist MYC denn bei denen ein Abschreibungsobjekt ?
Hoffentlich habe ich nicht bald meine erste Depotleiche ...
Andererseits - ich könnte My Casino dann eventuell übernehmen !?
Aber jetzt Schluß mit Sarkasmus ;-), oder :-(( .
