The B.C. Lottery Corporation launched its online gambling website on the morning of July 14, but within hours it had been shut down. (BCLC)

The head of the B.C. Lottery Corporation is defending a decision to wait five days before telling the public about a significant privacy breach involving its new online casino PlayNow.com.

The new casino and sports betting website was launched Thursday morning to great fanfare, but shortly afterward the site was shut down.

It was later revealed that some gamblers had seen the personal information of others on the site, including the names, contact information and, in some cases, credit card and bank information.

Some were apparently even able to gamble with the money of other customers.

BCLC initially blamed the shutdown of the website on an overwhelming rush of customers when it was launched, but made no mention of a possible breach of customers' privacy in its public statements for four days.

CEO learned of breach a day later

BCLC chief executive Michael Graydon told CBC Radio on Wednesday morning that he was informed that there might have been a privacy breach around 2 p.m. Friday, one day after the site was shut down.

"As we continued to investigate after the site was shut down we found that the data crossovers had happened in a number of locations," he said.

"The first thing that we did was contact the privacy commissioner and let them know that there may have been a privacy problem," he said.

In all, there were 134 gamblers who had their privacy compromised on the site. Lottery officials contacted them but Graydon said he saw no need to go public with news of the privacy breach at that time.

"At that point, our public became our players, and not the general public. The site was closed down. There was no ability for further transaction and we felt it important that we communicated directly with our players with the level of detail they expect from us in regards to what had happened," he said.

Rumours circulating

Over the weekend, rumours started circulating that the problems with the new website were much greater than BCLC was revealing.

On Monday, instead of informing the public about the privacy breach, BCLC issued a news release once again blaming player volumes for "exceeded server capacity, creating traffic and load issues."

It was not until Tuesday that the BCLC finally revealed the privacy breach in a news release.

"Due to tremendous interest and traffic associated with the launch of casino games on PlayNow.com on July 15th, BCLC servers experienced load issues causing what is technically referred to as a 'data crossover,'" the statement issued Tuesday said.

"Upon learning of this situation, BCLC took immediate action to shut down PlayNow.com, enabling a full assessment to occur.

"These 134 accounts could have been inadvertently accessed by any one of up to 105 players who were also online at the time. BCLC's assessment concludes that 12 of these 134 accounts had a measure of sensitive personal information viewed by another player," the statement said.

Public not misled: CEO, minister

Graydon denied suggestions that the lottery corporation misled the public about the nature of the site problem by not revealing the privacy breach for five days.

"The initial indication was that it was a traffic problem and that the performance issues were caused by the amount of players playing … and the data crossover was one of those performance issues that emerged through the diagnostics that we did," Graydon told CBC News.

The minister responsible, Rich Coleman, also insisted the public was not misled about the nature and extent of the problem.

Coleman said when the system first crashed, the corporation didn't know what it was dealing with.

"It was not until Monday that, after working through the weekend, that all of the issues were verified."

Coleman also insisted the corporation did everything it could to prepare for the launch of the site.

"You couldn't have predicted this. Even the people who have done these sites, the people that we use out of England, had never seen this happen before, so they would not have known this could happen."

Coleman said the corporation is doing everything it can to ensure this kind of privacy breach doesn't happen again.

There's no word when the PlayNow.com site will be re-launched.

Both the BCLC and Coleman have denied speculation that the site might have been targeted by a denial-of-service attack, in which large numbers of computers infected with a virus are secretly programmed to overwhelm one particular site with traffic.