From betting on horses to playing virtual roulette, the online gaming industry is rapidly growing. It’s estimated that more than one billion people use online gambling sites and apps worldwide. And with online gamers spending around $21.1 billion in the last year, it’s easy to see why online gaming has attracted the attention of fraudsters and organised crime gangs involved with money laundering.
Increasingly, fraudsters are trying their luck by using stolen identities or fake ID documents to create new accounts or gain access to existing ones. In many cases, fraudsters are using these accounts to syphon off money from their unsuspecting victims' bank accounts, before withdrawing it elsewhere. With several major sporting events on the horizon, such as the Euros, Olympics and Rugby World Cup, this a problem that is likely to intensify in the coming months as more consumers bets online.
To prevent fraud and protect consumers, gaming operators must comply with anti-fraud regulations like Know Your Customer (KYC) and Anti-Money Laundering (AML). These regulations set out several strict measures that gambling sites and apps are required to adhere to in order to operate in the UK.
What’s more, many online gaming and gambling companies in the UK are licensed and regulated by the Gambling Commission. As such, they are expected to protect players from gambling beyond their means and support responsible gambling. This is a particular concern right now, as many of the impacts of COVID-19 could put problem gamblers at greater risk.
Gaming operators must put measures in place to prevent underage gambling, as well as procedures to identify, protect and support gambling addicts. For instance, affordability checks can help online gaming companies to identify players that may be at risk of gambling more than they can afford to, without adding any additional steps for new players to complete during the onboarding process.
Faced with these challenges, identity verification is increasingly important for gaming operators who need to be sure that players are who they claim to be before they are allowed to start playing. That means making sure new and existing players are genuine and, importantly, old enough to gamble. While at the same time, making smart use of data to remove friction from the customer experience.
Identity verification solutions can help gaming operators to verify the identity of players, without compromising security, compliance or convenience. The ID verification process works by layering data from a range of different sources to check that an individual is really who they say they are. Age verification is also particularly important for online casinos, betting companies and gambling sites.
In many cases, players are asked to upload copies of ID documents such as a passport or driving licence or provide some personal details, like their date of birth or address. This information can then be checked against third-party sources, as well as live photos or selfies supplied by the player.
In addition to ID documents, contextual data, like IP addresses or phone numbers, may also be used to verify players who are signing into an account from a different device or location. If this is deemed to be suspicious, players may be asked to prove their identity to access their account. This could be by typing in a unique code sent to a mobile device or e-mail address that has already been verified.
Real-time affordability checks can also be performed in the background to make sure that new and existing players don’t gamble beyond their means. For instance, by verifying consumer affordability indicators. This can be complemented with postcode-level data, such as the average property value where players live, so that companies can gain a more comprehensive view of individual players and take action to protect those that are most vulnerable.
As well as verifying players and tackling problem gambling, identity verification services can help gaming operators to reduce the risk of identity fraud and combat money laundering activity. For instance, by checking identities when players are adding a new bank account or withdrawing cash.
However, ensuring security and compliance with KYC and AML regulations isn’t the only challenge that online gaming and gambling companies face. They must also meet the expectations of players who want to be able to create and use accounts without going through a lengthy security process.
Gaming operators need to strike a balance between protecting profits and enhancing the customer experience, to secure future growth and player loyalty. Put simply, digital identity verification services must allow gaming sites and apps to verify players and their ID documents quickly if they are to provide the seamless and secure experience that players now expect when gambling online.
Looking to the future, it’s important to stay ahead of evolving regulations to prevent players and profits from potential risks. For instance, the UK’s Gambling Commission is currently reviewing a range of proposals to strengthen expectations on gambling businesses with regards to affordability. These proposals may require operators to carry out more comprehensive affordability checks and take action sooner, when specific thresholds are met, to ensure all players are gambling responsibly.