Last week I spent a day at ICE London, Europe’s leading event for the gaming and gambling sector. It was my first time attending and I was blown away by the scale of the exhibition. Stands stretched for what seemed like miles, showcasing anything and everything you could ever want to purchase for a casino or online gaming platform.

The exhibitors had gone all out with putting on a display and I could have spent hours enjoying Endorphina’s mime act, watching the Charleston dancers on Spribe’s booth, or hanging out in the White Hat Inn, the fully operational pub set up by White Hat Gaming.

However, I had come with a purpose – to explore how the gaming sector is approaching digital identity.

Rising fraud in online gaming

There was no shortage of digital identity and payments security providers present at ICE; Jumio, AU10TIX, Lexis Nexis Risk, IDVerse, Mastercard ID, Mitek, Sumsub, Seon, TrueLayer… the list goes on. Amongst the variety of technologies on offer the consensus was that the right verification measures are critical to ensuring gamers are genuine and are who they say they are.

With the global online gaming market generating $26 billion in revenue every year, the industry is clearly a lucrative target for financial criminals. As a result, platforms are finding themselves the target of increasingly sophisticated attacks.

Stolen or fake identities are being used at account creation or to gain access to existing accounts, for the purposes of money laundering. Bonus abuse, perpetrated by both ‘friendly’ fraudsters and organised criminals, is also a rapidly expanding threat. Some reports estimate bonus abuse now accounts for as much as 50% of fraud in the sector.

Faced with an evolving threat landscape, gaming operators are required to comply with KYC and AML regulations designed to fight financial crime. And for businesses operating regionally or internationally, this legislation will vary between different jurisdictions. Operators are also obligated to support responsible gambling, by restricting access to underage players and conducting affordability checks.

The challenge for providers is to ensure compliance without detracting from strategies to attract and retain player interest. This means apps and platforms need to be able to complete identity verification and background checks quickly if they are to continue providing the seamless experience their customers expect.

Balancing compliance and growth

Listening to a panel discussion in the Consumer Protection Theatre titled, ‘Towards positive play – Blending compliance and marketing into an integrated communication with players’, I found that many of the insights panelists shared can be applied to the challenge of integrating identity compliance measures into a positive customer journey.

The overriding message of the session was that gaming businesses are just that, businesses, and so naturally they want to promote their services to current and potential customers, but these efforts cannot come at the cost of causing harm.

For this reason, as Chief Data Officer, at Future Anthem, Chris Conroy, highlighted on the panel, UK regulation calls for providers to invest as much in safer gambling technology as they do in marketing technology. The ‘Gambling Act Review White Paper’, the most significant amendment to UK gambling legislation published in April 2023, covers the need to identify customers at risk of harm and adjust marketing efforts accordingly.

The White Paper also states that providers should invest in age verification systems and algorithms to prevent young people from being targeted by advertising. Any platforms failing to protect vulnerable players risk not only reputational damage but the possibility of hefty fines for non-compliance.

Clear customer consent processes are also really important and the panel discussed the need for compulsory opt-ins to marketing for each gambling product. However, as Simon Bold, Chief Customer Officer at Crucial Compliance explained, the challenge is to not put off genuine and non-vulnerable customers with constant messages to verify they’re okay with each action they’re taking.

A similar challenge exists when tackling identity verification. The right level of security and consent to sharing data is vital when onboarding customers, to prevent fraud and to build trust. This process can’t be so onerous however as to put off potential customers looking for a product they can access without delay.

Panelists were in agreement that the right balance is worth finding. Jade Lauchauner, Senior Manager at IGT pointed out that the appropriate level of scrutiny can actually help player retention to increase. Through processes designed to keep customers safe, operators are engaging more with their customer base and gaining important insights into customer behaviour.

Effective identity management can expand this positive interaction even further. With a digital identity that evolves through the customer lifecycle players become more than simply data points, businesses can gather a full picture of a user’s preferences and needs, allowing them to foster greater loyalty and engagement.

The future of identity in gaming

So what’s next for the industry? The sessions I listened to and the conversations I had at ICE certainly left me with the feeling that the gaming sector is on the verge of change as the use cases for identity verification continue to expand.

In the last few weeks alone, several notable developments have been announced. There was the news that iDenfy is working to verify the identities and ages of Lithuanian gambling business Spins’ customers, game developer Lockwood Publishing’s integration of Yoti’s age estimation solution into its online simulation, and Jumio’s partnership with Kaizen Gaming to streamline bank account verification.

Progress will undoubtedly evolve in line with wider changes across an identity ecosystem moving to embrace reusable credentials and digital wallets. The application of cutting-edge technologies like automation, machine learning and AI will no doubt all have a role to play.

The solutions are out there, but as one gaming platform’s AML lead who I met at ICE told me – the challenge is not just complying with regulations but finding solutions which actually create a good experience for customers whilst making life easier for the compliance and fraud teams working behind the scenes.

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Join us at Future Identity Customer, on 21st May 2024, at etc. venues 155 Bishopsgate, as we explore how businesses in retail, gaming, finance, healthcare, media and other innovation-first industries are approaching digital identity.