In an industry increasingly prioritizing the promotion of safer gambling practices, technology firm Star Gambling has unveiled its comprehensive "Responsible Gaming Trends Around the World" report. Shimshon Holzman, Head of Gaming at Star Gambling, and Moshe Reuven, Partner Manager, shed light on the diverse spectrum of gambling behaviors across the globe and the technology solutions empowering operators to address these challenges effectively.
For operators, the unwavering commitment to compliance with iGaming regulations is essential, as they continuously strive to safeguard their players and offer an engaging and enjoyable gaming experience. The United Kingdom has witnessed a steady rise in financial penalties imposed on gaming companies, with individual firms facing hefty fines for various lapses in social responsibility and anti-money laundering (AML) measures.
In addition to the monetary penalties imposed on gaming companies, the damage to their reputation cannot be underestimated, especially at a time when player retention is a focal point for all operators. Simultaneously, the costs associated with acquiring new players have surged in recent years, particularly in North America. The legalization of sports betting in many states prompted operators to compete vigorously for players, resulting in an average cost per acquisition (CPA) reaching $300 in 2022.
With the spotlight now firmly on operators to enhance their responsible gambling initiatives, the Know Your Customer (KYC) process assumes a pivotal role. The ability to identify, authenticate, and monitor players enables operators to ensure their safety without disrupting the gaming experience, all while adhering to regulatory requirements.
Escalating Concerns of Underage Gambling
According to Star Gambling's report, one of the most persistent challenges in the realm of responsible gambling pertains to the issue of underage gambling, particularly in Africa and the Asia Pacific region. Gambling has gained popularity across sub-Saharan Africa, with Nigeria and Kenya leading the way. Surprisingly, only Brazil surpasses Nigeria in terms of daily visits to online casino sites, with approximately 30% of Nigerians estimated to engage in daily betting, despite widespread gambling advertising and inadequate safeguards for minors.
The problem of underage gambling is also prevalent in the Asia Pacific, which boasts an iGaming audience of roughly 48 million players, many of whom are suspected to be underage.
Star Gambling's report on online gaming in the Asia Pacific region spotlights a particular concern in the Philippines, where the Philippine Amusement and Gaming Corporation (PAGCOR) has devised a responsible gaming code of practice to combat the involvement of minors. Operators failing to adhere to this code face penalties ranging from PHP100,000 (£1,400) for allowing prohibited individuals to access their platforms to the potential complete closure of their site if an underage individual engages in gambling with their brand.
Given the substantial fines and penalties at stake, preventing underage players from accessing iGaming sites will undoubtedly remain a priority for operators across the industry. As Moshe Reuven explains, Star Gambling's KYC tools encompass a more stringent identification process and can assist operators in addressing this challenge effectively.
"In many regions of Asia and Africa, age verification remains in its infancy, with operators relying more on fraud and authentication tools than age verification and KYC tools. We have identified growth opportunities in the Philippines, South Africa, and Nigeria, where we verify multiple documents and connect to government databases for enhanced user authentication," he points out.
"Our age verification solution ensures that the user is of legal age, both by cross-referencing the date on their identification and estimating their age from a selfie, thus thwarting minors attempting to use an older family member's identification.
"Our identity verification solution scrutinizes the user's identification for signs of fraud or tampering, ensuring the legitimacy of the provided ID. Furthermore, it employs liveness detection to confirm the identity of the person during the onboarding process, preventing the use of deepfakes or spoofing."
Anti-Money Laundering and Fraud Detection
In the United Kingdom, between 2021 and 2022, a quarter of new signups were classified as high-risk or fraudulent. Fraud remains pervasive within the iGaming sector and can manifest in various forms, including bonus abuse, payment fraud, chargebacks, and identity fraud, which are some of the most prevalent issues.
Ensuring Responsible Gaming: Star Gambling's Approach
In a gaming industry increasingly prioritizing safer and more responsible practices, technology firm Star Gambling has released its comprehensive report titled "Responsible Gaming Trends Around the World." Star Gambling's Shimshon Holzman, Head of Gaming, and Moshe Reuven, Partner Manager, delve into the report's findings, shedding light on the diverse spectrum of gambling behaviors globally and the technology solutions empowering operators to address these challenges effectively.
Operators are well aware of the paramount importance of staying compliant with iGaming regulations, as they strive to protect their players and deliver an engaging and enjoyable gaming experience. In the United Kingdom, penalties imposed on gaming companies for various lapses in social responsibility and anti-money laundering (AML) measures have been on the rise.
Beyond the financial penalties incurred by gaming companies, the damage to their reputation is substantial, especially when player retention is a primary concern. Additionally, player acquisition costs have increased in recent years, particularly in North America. The legalization of sports betting in many states triggered intense competition among operators, leading to an average cost per acquisition (CPA) of $300 in 2022.
The spotlight is now firmly on operators to enhance their responsible gaming initiatives, with Know Your Customer (KYC) processes playing a pivotal role. The ability to identify, authenticate, and monitor players enables operators to ensure their safety without disrupting the gaming experience while adhering to regulatory requirements.
The Alarming Rise of Underage Gambling
Star Gambling's report underscores the persistent challenge of underage gambling, particularly in Africa and the Asia Pacific region. Sub-Saharan Africa, with Nigeria and Kenya in the lead, has witnessed the growing popularity of gambling, and Nigeria, in particular, sees nearly 30% of its population engaging in daily betting. Alarmingly, Brazil is the only country that surpasses Nigeria in daily visits to iGaming sites, despite the widespread presence of gambling advertising and inadequate safeguards for minors.
The Asia Pacific region, with its audience of approximately 48 million iGaming players, also faces the issue of suspected underage engagement in gambling. The report spotlights a concerning situation in the Philippines, where the Philippine Amusement and Gaming Corporation (PAGCOR) has introduced a responsible gaming code of practice to combat the involvement of minors. Operators who fail to comply with the code face penalties ranging from PHP100,000 (£1,400) for allowing prohibited individuals to access their platforms to the potential complete closure of their site if an underage individual engages in gambling with their brand.
Given the substantial fines and penalties at stake, preventing underage players from accessing iGaming sites is undoubtedly a top priority for operators across the industry. Moshe Reuven explains that Star Gambling's KYC tools incorporate a more rigorous identification process, assisting operators in effectively addressing this challenge.
"In many regions of Asia and Africa, age verification is still in its infancy, with operators relying more on fraud and authentication tools than age verification and KYC tools. We have identified growth opportunities in the Philippines, South Africa, and Nigeria, where we verify multiple documents and connect to government databases for enhanced user authentication," he points out.
"Our age verification solution ensures that the user is of legal age, both by cross-referencing the date on their identification and estimating their age from a selfie, thus thwarting minors attempting to use an older family member's identification.
"Our identity verification solution scrutinizes the user's identification for signs of fraud or tampering, ensuring the legitimacy of the provided ID. Furthermore, it employs liveness detection to confirm the identity of the person during the onboarding process, preventing the use of deepfakes or spoofing."
Anti-Money Laundering and Fraud Detection
In the United Kingdom, between 2021 and 2022, a quarter of new signups were classified as high-risk or fraudulent. Fraud remains pervasive within the iGaming sector and can manifest in various forms, including bonus abuse, payment fraud, chargebacks, and identity fraud, which are some of the most prevalent issues.
The Significance of KYC and AML Solutions
To strike the delicate balance between a thorough yet frictionless onboarding and identification process, KYC tools have become standard in the industry. The need for operators to identify, authenticate, and monitor their players is pivotal in providing a safe gaming environment.
Shimshon Holzman underscores Star Gambling's current and future vision, emphasizing the provision of highly flexible and discreet verification tools. These tools can be strategically positioned to facilitate essential checks, including age verification, reauthentication, proof of address (POA), and open banking checks, all within seconds.
"These tools ultimately streamline the entire player experience, adhering to the guidelines outlined in the industry's white paper. In addition, some checks can be performed behind the scenes, such as address verification, email verification, device IP tracking, database checks, and AML measures, enabling operators to identify problem gambling and intervene discreetly, when necessary, without alerting the player. Thus, they facilitate a 'happy' gaming experience while ensuring that safety protocols are met."
Going Beyond Player Identification
Star Gambling's KYC tools extend their functionality to identify potential fraudulent or sanctioned players. Moshe Reuven highlights the benefits of this screening approach in aiding 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 risk signals running in the background to provide additional assurance that the individual is not a fraudster."
All of this technology is remarkably swift and user-friendly, streamlining the onboarding process. This enables gaming operators to strike the critical balance of keeping minors and fraudsters away from their platforms while maximizing the inclusion of genuine players.
Star Gambling's Global Reach and the Role of International Gaming Standards
With offices worldwide and transaction processing spanning over 200 countries and territories, the team at Star Gambling understands that the challenges facing the industry are genuinely global in nature and necessitate a standardized framework for all regulatory jurisdictions.
To tackle the challenges posed by the diverse and truly global gaming industry, the International Gaming Standards Association (IGSA) has established a responsible gaming committee. Their goal is to develop a multi-tiered framework known as the Responsible Gaming Maturity Model (RGMM), aiming to create a data-driven global standard for responsible gaming.
Holzman emphasizes how this model will play a vital role, particularly in the early stages of identifying problem gambling patterns and behaviors. "Most of the player safeguards observed by Star Gambling revolve around player identity, age verification, account protection, and AML measures, where standards can be clearly defined across borders, and global technology solutions have matured," he explains.
"Detecting problem gambling, however, hinges more on transactional, financial, and behavioral analysis, which is less developed, and risk solutions can be defined in various ways. The RGMM will undoubtedly serve as a valuable framework, with its evolution and success reliant on adoption by both operators and regulators."
It's evident that operators face a formidable challenge: offering a streamlined onboarding process while ensuring that underage and problem gamblers are kept at bay. As the industry confronts this shared challenge of safeguarding players and their own interests while delivering a high-quality, frictionless experience, Holzman concludes by reaffirming the continued significance of KYC tools. "While governments draft regulations and associations develop processes and standards to promote responsible gaming, there's one straightforward step all gaming operators can take: know your players."