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As an accompaniment to our breakdown regarding Ontario gaming license requirements for cybersecurity, today we're examining a similarly frequently-asked query: "What are the California gaming license requirements for cybersecurity?"

What with the global gaming market cap estimated to reach US$ 268.8 billion by 2025, Statista reports that the continued growth is making the industry a prime target for threat actors. So how can you ensure that you are in line with the gaming license cyber requirements in 2023 and beyond, alongside safeguarding your organization from criminals?

Let's get started:

Firstly, What is Gaming License Penetration Testing?

Ethical hackers conduct licensed penetration testing to perform in-depth security testing; when it comes to the gaming industry, penetration testing is used explicitly for testing deals with gaming servers and applications.

Since the global gaming market is set to surge at an approximate accelerated compound annual growth rate of 7.31%, California gaming professionals have been cautioned that often lure cybercriminals to exploit gaming servers and applications to take away all the monetary profits from gaming companies.

These gaming servers and apps hold information about their gamers (users). Therefore, in order to protect these publicly exposed gaming systems and apps, gaming firms must take adequate security measures. A gaming license penetration test is one security measure that can help preemptively target exploitable flaws.

Any breach in the gaming system can trigger several problems. These include, but are not limited to:

• Malfunctions or interruptions on the client side, leading to monetary and reputation-related losses

• An erosion of long-term client trust

• An exodus of clients in the wake of a successful breach due to clients feeling as though the platform is vulnerable or that their information is at risk

• A reluctance from clients to use credit cards and other digital finance systems to buy gaming assets and points, which can have negative ramifications on organizations long-term

Gaming Industry Security Assessments in California

In California, all gaming and gaming-adjacent organizations must consider data protection and adequate security measures to prevent the integrity of users.

As such, each gaming license penetration testing must include the minimum following assessments:

• Use SAST for source code analysis: Gaming firms should perform gaming license penetration testing by implementing Static Application Security Testing (SAST) tools. This step will help them analyze the data flow between the gaming app, API, and server(s). They should recognize data-entry points and outline all user-controllable data from them. The pen testers should also uncover vulnerabilities in the code and exploit them to understand the attack chain. After analyzing the app, specific codebase areas, and associated systems manually, they should report the results of the automated tools

• Pentesting with DAST: The gaming license penetration testers should also perform Dynamic Application Security Testing (DAST). This test will identify vulnerabilities like unauthorized authentications and remove false positives or bugs that can reveal source codes. Gaming enterprises synchronize all the network components for network security and preserve logging or auditing capabilities. According to AGCO, security professionals must design network infrastructure with proper tools to monitor and prevent a large volume of communications from security incidents or integrity issues.

The 3 Phases of Licensed Penetration Testing For Gaming

All gaming license penetration testing is required to go through the following three phases:

• Passive phase: In this starting phase, the gaming license pentesters determine the project scope. The pen testers perform survey and analysis to understand the architecture associated with the gaming system

• Active phase: Penetration testers dig into the system and exploit it with tools and manually based on the previous analysis and findings. This phase accounts for up to 80% of the gaming license penetration test cycle

• Reporting: After exploiting and documenting the extensive vulnerabilities, the pentesters then create the report. Based on those reports, the organization's security professionals and application security engineers subsequently apply fixes

The Benefits of Adhering to California Gaming License Requirements

Modern casinos must optimize the player experience while preventing security threats beyond dishonest play.

Why? Because high-value information is as abundant in gaming organizations as money is: between PII for rewards programs, payment card data from POS and other terminals, in-game currencies, and the authentication of winnings, the gaming industry is a gold mine for threat actors.

Protecting this information requires an extensive infrastructure to handle diverse cryptographic functions with maximum security and minimum downtime. Benefits of adhering to California gaming license requirements for organizations include:

• Safeguarding PII such as payment card data, names, and addresses

• Securing G2S protocols to prevent manipulation from threat actors

• Authenticating payouts and jackpots

• Guarding against payment fraud

• Preventing the likelihood of internal breaches

Penetration Testing for the Gaming Industry

Here at Packetlabs, we execute a variety of services to help bolster organizations' overall security posture:

• DevSecOps: DevSecOps is integrated early in your development cycle and acts as an extension of your development team to flag vulnerabilities within your existing detected management systems

• Red Teaming: Red Teaming is a full-scope simulated attack designed to get a holistic review of the level of risk and vulnerabilities across people, processes, and tech in an organization

• Purple Teaming: Purple Teaming is our collaborative testing exercise where the Packetlabs red team works with your internal security operations team (or blue team) to bridge the gap between offensive techniques and response efforts

• Cyber Maturity Assessments: A Cyber Maturity Assessment supports the tactical direction of your cybersecurity strategy. As the first step in strengthening your security posture, this assessment generates the roadmap to strengthen your overall security program

• Compromise Assessments: A Compromise Assessment uncovers past or present threats like zero-day malware, trojans, ransomware, and other anomalies that may go unnoticed in standard automated vulnerability scans

• OT Assessments: OT Cybersecurity Assessments simulate the likelihood of an attacker reaching the control centre from an external and internal perspective with production-safe testing

• Ransomware Penetration Testing: A ransomware penetration test evaluates the preparedness and risk of a ransomware attack and identifies gaps in people, processes, and technology, to determine the likelihood and readiness for a ransomware attack

• Cloud Penetration Testing: Multiple perspectives help with strengthening your security posture. These include Cloud Penetration Testing, which simulates an attacker in the environment, and a Cloud Penetration Review, which provides insights into cloud-specific vulnerabilities originating from an insecure configuration. Each of these services can be conducted separately or, for maximum effectiveness, combined as an enhanced cloud security bundle

• Objective-based Penetration Testing: Following a preliminary penetration test, objective-based testing conducts a more advanced simulated cybersecurity attack. The test is conducted by persistent ethical hackers who deploy multiphase attacks to gain access to your organization's data so that you can discover gaps and vulnerabilities unique to your organization and test your ability to detect and respond to threat actor

• Application Security Testing: More targeted in scope than a regular pentest, application security testing uncovers vulnerabilities residing in your web and mobile apps. Application Security Testing actively explores your application from an attacker’s perspective

• Infrastructure Penetration Testing: An infrastructure penetration testing assessment uncovers vulnerabilities in your IT and network systems and provides a tailored approach to each environment

These are in addition to the Packetlabs Portal, which lets you quickly view findings, prioritize efforts, request retests after remediation, and monitor progress.

From this list, each type of penetration test or assessment can be tailored to your organization's specific cybersecurity wants, needs, goals, and pre-existing vulnerabilities. 

Frequently Asked Questions About California Gaming License Requirements for Cybersecurity

"What is the importance of data security and fraud protection in the casino gaming industry?"

Emphasizing data security in the California gaming industry is critical: modern casinos and gaming-adjacent organizations must secure the personally identifiable information of patrons and key stakeholders alike; guarantee the authenticity of jackpots; secure Game to System (G2S) transfers of files, games, and configuration parameters; and guard against payment fraud or attempted fraud; and more.

"What types of cybersecurity threats does the gaming industry generally encounter?"

Casinos collect avalanches of personal player and key stakeholder data, including, but not limited to, credit and debit card numbers, first and last names, personal and business addresses, and other related info. This information, oftentimes stored in a centralized database, offers itself up as a temptation for threat actors; as such, cybercriminals threaten not only PII but also pose a severe risk to in-game currency, the distribution of player credit, player rewards point systems, and the games themselves. Any information stored on a computer in software is susceptible to what our clients call "company-killing asteroids."

Internal breaches also frequently occur, whether they be via intentional attacks or through accidental misuse of privilege from internal staff members.

"What are the California gaming license requirements for cybersecurity?"

• PCI Security Standards Council (PCI SSC): The Payment Card Industry Hardware Security Module dictates the secure design and deployment of HSMs to ensure their integrity. These cryptographic devices must meet a strict set of criteria satisfying physical and logical security requirements, including requirements for tamper detection and response, dual login, and separation of user roles

• National Institute of Standards and Technology (NIST) FIPS 140-2 Level 3: The Federal Information Processing Standards is a U.S. government security standard used to accredit cryptographic modules that protect sensitive, but unclassified information. The Level 3 aspect adds requirements for physical tamper resistance, tamper responsiveness, and identity-based authentication

Conclusion

California gaming license penetration testing is crucial for organizations to verify (and correct) the security posture regarding their servers, game apps/codes, API integrations, game-asset marketplace, and web apps.

Are you looking to take the first (or next) step toward fortifying your gaming or gaming-adjacent organization? Contact the Packetlabs team today for your free, zero-obligation quote.