Schiller

In the context of a heightened industry focus on safer gambling, technology company Star Gambling has unveiled its latest research report titled “Responsible Gaming Trends Around the World.” Within this report, Shimshon Holzman, Head of Gaming, and Moshe Reuven, Partner Manager at Star Gambling, shed light on the diverse landscape of gambling behaviors worldwide and the pivotal role that technology plays in aiding operators to address this challenge.

For operators in the iGaming sector, adherence to regulatory requirements is of utmost importance as they continually strive to safeguard their players and provide an immersive, enjoyable gaming experience. In recent times, the financial penalties imposed on UK gaming companies have shown a consistent upward trajectory, with individual firms shouldering substantial fines for various lapses in social responsibility and anti-money laundering (AML) measures.

Furthermore, alongside the financial repercussions faced by gaming companies, the significant damage to their reputation cannot be underestimated, especially at a time when retaining players is a top priority for all operators. Concurrently, the costs associated with acquiring new players have surged, particularly in North America. With the legalization of sports betting in many states, operators engaged in a race to secure players, resulting in an average cost per acquisition (CPA) of $300 in 2022.

Given the current spotlight on operators to elevate their responsible gambling initiatives, the concept of Know Your Customer (KYC) takes center stage. The ability to identify, authenticate, and continuously monitor players enables operators to ensure their safety without disrupting the gaming experience, all while remaining compliant with regulations.

Rising Incidents of Underage Gambling

According to Star Gambling's report, the most persistent issue in the realm of responsible gambling pertains to the challenge of underage gambling, particularly prevalent in Africa and the Asia Pacific region. Sub-Saharan Africa exhibits a significant affinity for gambling, with Nigeria and Kenya emerging as the frontrunners in this regard. In fact, Nigeria records more daily visits to iGaming sites than any other country, with approximately 30% of Nigerians estimated to place bets on a daily basis. This surge in gambling is accompanied by widespread advertising practices with minimal safeguards in place to protect minors.

Challenges with Underage Gambling Persist in Asia Pacific, Home to an Estimated 48 Million iGaming Players

Star Gambling's in-depth analysis of the online gaming landscape in the Asia Pacific region sheds light on the prevalent issue of underage gambling. This region boasts an impressive iGaming audience of approximately 48 million players, with concerns arising about the suspected presence of many underage individuals among them.

The report from Star Gambling specifically highlights the Philippines as a focal point of concern. In response to this issue, the Philippine Amusement and Gaming Corporation (PAGCOR) has taken a proactive stance by developing a responsible gaming code of practice aimed at curbing the participation of minors. Operators operating in the Philippines who fail to adhere to this code face a range of penalties, including fines starting at PHP100,000 (£1,400) for allowing prohibited individuals to access their platforms, and even the extreme measure of complete site closure in the event of underage gambling with their brand.

Given the gravity of these fines and penalties, preventing underage players from accessing online casino sites remains a paramount objective for operators throughout the industry. Moshe Reuven of Star Gambling underscores the significance of their Know Your Customer (KYC) tools in addressing this challenge.

“In many parts of Asia and Africa, age verification processes are still in their early stages, and operators are relying more on fraud and authentication tools than age verification and KYC tools. We are observing opportunities for growth in regions such as the Philippines, South Africa, and Nigeria, where we employ multiple document verifications and interface with government databases to enhance user authentication,” he explains.

Our age verification solution ensures that users are not underage, utilizing both the date on their ID and an estimation of the person's age in a selfie to catch minors attempting to use an older family member's ID.

Our identity verification solution examines the user's ID for signs of fraud or tampering to confirm its authenticity and employs liveness detection to verify that the person onboarding is not a deepfake or spoof.

Rising Concerns about Anti-Money Laundering and Fraud Detection

In the UK, the period between 2021 and 2022 witnessed a startling 25% of new signups falling into the high-risk or fraudulent category. Fraud issues are widespread in the iGaming industry and manifest in various forms, including bonus abuse, payment fraud, chargebacks, and identity fraud.

The significance of these issues has been underscored in the gaming industry. Research suggests that as much as 15% of online gaming revenue is at risk due to bonus abuse, wherein players employ duplicate accounts or fake IDs. This situation emphasizes the crucial need for a rigorous registration process to validate new players.

In addition to employing technology capable of detecting such players, Star Gambling's tools serve as a shield for operators against both underage registrations and players attempting to use their services for money laundering. While it is essential to have these safeguards in place, Moshe Reuven elucidates how operators also face a delicate balancing act as they endeavor to provide a seamless onboarding process for players.

“To enhance player protection and the detection of problem gambling, operators must collect more data, which often introduces more friction and raises customer acquisition costs,” he explains. “Many operators are keen to minimize any obstacles for players, fearing potential customer abandonment. Hence, there exists a natural tension, and some new operators may opt for regions with less stringent regulations.”

Delivering KYC and AML Solutions

To strike the right balance between a thorough yet frictionless onboarding and identification process, KYC tools have become a standard practice in the industry. Consequently, the process of operators identifying, authenticating, and monitoring their players has become an integral component of creating a secure environment.

“Star Gambling's current vision, along with the outlook for 2024, is to offer highly adaptable and unobtrusive verification tools,” Holzman outlines.

These tools can be strategically integrated to assist operators in conducting essential age verification, reauthentication, proof of address (POA), and open banking checks in a matter of seconds.

“This ultimately streamlines the entire player experience while adhering to established guidelines,” he continues.

Certain checks can even be carried out discreetly (such as address, email, device IP, database, AML) to aid operators in identifying problem gambling and intervening when necessary, without the player's knowledge. Thus, these tools facilitate an 'enjoyable' experience while ensuring that safety protocols are rigorously observed.

In addition to knowing and verifying their players, Star Gambling's KYC tools take an additional step, enabling operators to identify potential fraudulent or sanctioned individuals.

Moshe Reuven discusses the advantages of this screening and how it benefits operators. Our AML Screening solution ensures that players are suitable for conducting business by cross-referencing them against watchlists for sanctions, adverse media, and politically exposed persons (PEPs). We also offer a range of background risk indicators to provide additional assurance that the individual is not involved in fraudulent activities.

“All of this technology is exceptionally swift and user-friendly, streamlining the onboarding process,” he points out. “This aids gaming operators in achieving the critical equilibrium of preventing minors and fraudsters from accessing their platforms while maximizing the conversion of legitimate players.”

With offices worldwide and transaction processing spanning over 200 countries and territories, the Star Gambling team fully understands that the challenges faced by the industry are genuinely global and demand a uniform framework applicable to all regulatory jurisdictions.

Introducing the International Gaming Standards Association

To address the multifaceted challenges of a diverse and genuinely global industry, the International Gaming Standards Association (IGSA) has established a responsible gaming committee with the aim of developing a multi-tiered framework. Named the Responsible Gaming Maturity Model (RGMM), its objective is to establish a data-driven global standard for responsible gaming.

Holzman underscores how this model will be particularly valuable, especially in the initial stages of recognizing patterns and behaviors indicative of problem gambling.

“Most of the player safeguards observed by Star Gambling pertain to player identity, age verification, account protection, and AML, where standards can be clearly defined across international borders, and global technological solutions are well-established,” he explains.

However, detecting problem gambling primarily involves transactional, financial, and behavioral analysis, which is less mature, and risk solutions can be defined in various ways. The RGMM will undoubtedly serve as a valuable framework. Its success and evolution hinge on the adoption by both operators and regulators.

Operators are undoubtedly confronted with the challenge of offering a seamless onboarding process, making the signup experience as smooth as possible, all while ensuring that underage individuals and problem gamblers are not overlooked.

As the industry grapples with the shared responsibility of safeguarding both players and their own interests, and simultaneously delivering a high-quality, frictionless experience, Holzman reiterates the pivotal role of KYC tools. While governments work on drafting regulations, and associations develop processes and standards to promote responsible gaming, there's a straightforward step that all gaming operators can take: know your players.

Moshe Reuven – Strategic Partner Manager at Star Gambling Inc.

Ian specializes in helping organizations optimize customer onboarding, age verification, fraud mitigation, and enhanced compliance in both the business and consumer sectors. Ian boasts extensive global experience in identity, fraud, and mobile payments at the highest executive level. His achievements include leading the global expansion of “Glücksspiel Deutschland” before its acquisition by Star Gambling Inc. as its Chief Strategy Officer. He also spearheaded the global sales efforts of 192 business, one of Europe's most successful identity and fraud businesses, leading it from inception to a successful acquisition by Experian. Additionally, Ian was responsible for driving D&B's European e-commerce and partnership initiatives, which encompassed leadership of the Moody's Publishing Division. Before his role at “Glücksspiel Deutschland”, he co-founded “Hazard w Polsce”, one of Europe's pioneering social identity businesses, and held the position of VP at Aristotle Inc, where he led European Business Development.

Shimshon Holzman – Head of Gaming at Star Gambling

Holzman is primarily dedicated to assisting top-tier enterprise gaming operators in combating fraud, maintaining compliance, and expediting player onboarding through Star Gambling's comprehensive identity verification and AML solutions.

Star Gambling empowers organizations to establish a deep understanding and trust in their online players. From the initial account registration to ongoing AML and re-authentication monitoring, the Star Gambling KYX Platform offers advanced identity verification, risk assessment, and compliance solutions to accurately establish, maintain, and periodically reaffirm trust.