With offerings ranging from ludo to betting on horses, the online gaming industry targets a wide audience. Revenue in the online gaming industry grew from $135.4 billion in 2020 to $176.06 billion in 2023. It’s easy to see why this industry attracts fraudsters and money launderers.
Chip dumping, multi-accounting, gnoming and fraudulent chargebacks can cost gaming platforms revenue, their reputation and their subscriber’s trust. Failing to detect fraud could even lead to compliance issues and hefty fines. The first step to fighting this – implementing robust identity verification processes.
Digital Identity Verification in the Gaming Industry
Digital identity verification refers to a system of checks to ensure that players are who they claim to be. This is a basic requirement for Know Your Customer (KYC) and Anti-Money Laundering (AML) regulatory compliance.
Identity verification reduces the risk of hosting fake accounts that impersonate other players and ensures that all players are above the legal age limit. Enriching the basic data used for identity verification can also support affordability checks.
For example, the postal code of a player’s street address can be used to infer property value and approximate average income. This protects vulnerable players and the platform from holding on to player debt.
Common Threats & Solutions for Gaming Identity Verification
Online casinos are expected to have over 129.5 million users by 2029. This rapid growth underlines the need for digital identity verification.
, identity verification in the digital realm is more complicated as compared to identity verification in the physical world. Some of the key challenges that concern gaming platforms are:
Diverse Regulations
While anyone with an internet connection can access online gaming platforms, the laws regulating their usage vary from region to region. Online gambling is strictly regulated in some countries but unregulated in others. Hence, you may need different licenses and regulations to operate in multiple countries.
In some cases, states within a country, for example, the USA, may also have differing regulatory requirements. License requirements may also vary depending on the type of games offered on the platform. For example, gaming platforms in Germany require different licenses to operate virtual slot machines and online poker.
Other countries like Japan, Iceland and Cuba strictly prohibit online gambling. Operating in such territories may be considered illegal.
Though the regulations governing online gaming are diverse, the slightest mistake can put gaming platforms at risk of heavy fines. Taking a proactive stance to insist on identity verification can help prevent this.
Here’s a simple example - As part of the verification process, gaming platforms may check the player’s location and provide access only when assured that their operation is legal in the region. In addition to verifying an individual’s identity, gaming platforms must also screen them through international watchlists.
Varied Document Formats
Identity verification relies heavily on documentary evidence. Players are required to upload a scanned copy of a document proving their identity. This could be a driver’s license, social security card, college ID card or any other such document that states their name, address, age and includes a photograph.
However, the documents issued by each country differ in terms of their format, the details included and the language used. This can be a challenge for online gaming platforms catering to an international audience.
Manually checking each document is next to impossible. The good news is that there are a number of identity verification tools that can be integrated with player onboarding processes.
These tools scan the document uploaded and compare the details on it against those stored in reliable third-party databases to verify the individual’s identity.
To maximize the efficacy of identity verification for online gaming, look for a tool that can recognize and read documents in varied formats and languages. The tool should also be able to connect with reliable databases in each country you offer services in.
With Melissa, gaming platforms can verify player identities with government IDs issued by 240+ countries and territories.
Impersonation
Documentary proof alone may not always be enough for identity verification. Given the virtual nature of this business, impersonation is a common issue. Fraudsters may impersonate other people to take over their accounts. On a more innocent note, underage players may impersonate their parents to get past the minimum age barrier.
The solution here is quite simple – identity verification with biometric testing. 60+ facial features may be used for biometric identification.
In addition to filling in a form, gaming platforms can ask players to upload a selfie while holding a document proving their identity.
Identity verification tools use facial recognition and comparison algorithms to match the face of the individual in the selfie with the photograph on the ID document. ID verification with biometrics that checks for eye movement and micro expressions also establishes proof of life
Customer Experience Expectations
Online players have high expectations from gaming platforms. They want to be able to play a game from their PC, tablet or smartphone at any time and from anywhere. They’re not known to be patient. That said, one of the most common challenges of online identity verification is that it can slow down the player onboarding process.
Hence, online gaming platforms need an identity verification tool that provides near real-time results.
Irrespective of the document uploaded or the location it is uploaded from, the tool should be able to capture and compare crucial information quickly to fulfill KYC requirements. It should also be easy to integrate with all Android, iOS and PC systems as well as web forms.
Making Online Gaming Safer
In 2024, Swedish regulators fined an online gaming platform SEK 500,000 for failing to implement sufficient measures to prevent minors from accessing the platform. In Australia, an AML breach cost a casino a penalty of AU$ 67 million!
It’s quite evident – online gaming is a lucrative business but failing to verify player identities can have expensive consequences.
Thankfully, advancements in technology have made it easy to verify player identities from wherever they may be without hampering their overall experience. Strengthen your verification processes today.