Gambling software firm takes $1.3m charge for security breach
Crackers reprogrammed online slot machines
Cryptologic, the gambling software firm, is taking a a $1.3m charge for a fraud on its system perpetrated by hackers.
Upon breaking into CryptoLogic's servers, hackers reprogrammed slot machines and a craps table at two Web-based casinos which use the firm's software so that illicit players won every time they played, Canada's National Post reports. It reports 140 gamblers amassed $1.9 million in the scam before CryptoLogic detected the scam and pulled the plug.
The net impact of the breach, which took place in August, on CryptoLogic was originally expected to be $600,000, after an expected insurance claim of $1.3 million.
However after a year end review, CryptoLogic decided to write-off the $1.3 million associated with the insurance claim arising from the system intrusion.
In its results statement, CryptoLogic said: "While the claim is subject to ongoing investigation, the company felt a prudent and conservative approach was appropriate."
Because of the charge, CryptoLogic's net income for Q4 was $3.7 million, compared to $4.1 million last year. Without this one-time expense, CryptoLogic would have posted net income of $4.2 million. ®
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