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Opinion Companies have to protect the personal data they collect in proportion to its sensitivity, and gambling companies must be particularly attentive to information security.

The data that gambling companies collect is particularly sensitive, meaning a data breach could have a serious adverse impact on their reputation and ultimately on their entire business.

Gambling operators who fail to take data protection seriously or fail to invest in robust data security measures could find several sets of regulators beating a path to their door. Worse, customers will flee and share prices will plummet. If you doubt that, just ask any senior Sony executive.

The company's PlayStation network was hacked and 77 million records were taken. It is one of the biggest data protection breaches ever and has affected the credibility of the organisation; the trust users are likely to place in it in future; and, ultimately, its share price. Sony has recently estimated the cost of the hacking and data breaches at a staggering $170m.

Gambling companies hold even more personal data than Sony would have. As well as names, addresses, passwords and account details, gambling companies hold details of payments and bank accounts and information about a person's gambling history.

Any company which allowed this personal data to be exposed to the world would struggle to regain users' trust. So even before a single regulator or law enforcement agency gets involved a company would be in major trouble. Add the Information Commissioner's Office (ICO), the Gambling Commission and lawyers acting for individuals intent on pursuing civil actions, and you have on your hands a serious threat to a whole company.

How companies can protect themselves

So what can companies do to avoid this scenario? The first and most obvious thing to do is to protect all the personal data you collect. Invest in secure systems; ensure your processes are sound; make sure security requirements and restrictions extend to any sub-contractors and anyone else with access to the data.

It is not just companies using portable media which are at risk: operators who are online are vulnerable to attacks including hacking and denial of service attacks. The Data Protection Act 1998 (DPA) requires that the measures put in place must be relative to the sensitivity of the personal data in question and the harm that could be caused by a security breach, taking into account cost and the technology available. You don't have to establish a research and development department to design unhackable code, but you do need comprehensively to consider the risks for your business and to implement appropriate security measures proactively.

Make sure all your staff are trained and have the level of data protection expertise appropriate to their role. Update their training so that they know exactly what is expected of them.

But if there is a leak, you can still take steps to limit the damage. As part of setting up of your data protection systems, create a plan that can be implemented as soon as a breach is found.

This should involve prompt notification to customers and regulators as well as mobilising the team that will be responsible for managing the breach. Quickly put in place support plans for customers, including compensation if necessary.

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