It’s fair to say that 2017 has got off to an eventful start – and with ICE already behind us, the world of iGaming isn’t far behind.
With that in mind, Onfido and Featurespace hosted a breakfast in the clouds at the world- famous Duck & Waffle to get the view from the top – literally – on the key trends facing the iGaming industry in the year ahead. New markets, new tech and new opportunities inevitably bring with them new challenges, so we asked the leading players where the industry goes from here.
Here’s what we found out.
Risk & Regulation
No operator will have failed to notice the steadily rising tide of regulation, and with the 4th Anti-Money Laundering Directive and GDPR coming into effect later this year, the burden’s only set to increase. Though undoubtedly good for protecting the interests of gamers, weightier KYC legislation presents a dual challenge for operators: not only must they work harder to meet requirements, but they need to do it without impeding the customer experience. Fail on either point, and they risk being hit with sanctions on the one hand, or seeing players migrate en masse to alternative platforms on the other.
It’s a difficult balance to strike, but as fraudsters find new and increasingly sophisticated means of slipping the net, an important one. With fraudsters starting to emulate ‘normal players’ online, check and balances need to be more detailed and comprehensive, and operators more flexible in the ways they manage risk. No longer can gambling businesses afford to work in silos; information needs to be shared across teams to develop a multi-dimensional profile that will catch everything from photoshopped IDs to spoof IPs, and work efficiently into the future.
Rise of the Machines
As the volume of fraudulent users on gambling platforms increases (up to 5% in some cases), new technology is required to combat them. Regtech solutions powered by Machine Learning can help navigate these uncertain waters, automating KYC processes to offer both seamlessness and security; sophisticated fraud detection and smooth user experience.
Faster and smarter than fraudsters, Machine Learning is able to see through visual fraud and spot patterns to keep bad actors out permanently. Solutions that predict player behaviour are becoming invaluable for many operators, as they offer protection during the roll-out of loyalty schemes, for instance, a bedding-in period when fraudsters are most able to take advantage.
Not all operators are prioritising the adoption of these solutions however, as focus is pulled towards mergers or local market regulation. Instead, some try to minimise losses by limiting games, especially in sports betting and casinos, but it’s hardly an ideal solution. Only by attaching maths and data to the problem will progress be made.
Beating Bonus Abuse
Minimising bonus abuse in a compliant way presents a particular problem for iGaming platforms. Offering a £10 free bet may get more players onboard, but the positives are balanced by the negatives as intelligent gamblers offset their own risk against other platforms’ offerings. While bonus hunters and everyday gamblers don’t present too much of a problem, bonus abusers do – and can cost unprepared platforms six-figure sums.
Unfortunately, it’s often internal tensions that prevent progress being made. Campaign teams and fraud teams operate unevenly, as marketers launch new offerings to attract new customers while fraud teams struggle to keep up with increased volumes and risk. Historically, bonus abuse was protected against by less than ethical practices that ensured players would never see the money they were promised; with the advent of new tech, more efficient (and transparent) methods may be available.
2017 presents a unique set of challenges for iGaming. Questions remain for operators on how to beat fraud efficiently, effectively and ethically, but what’s clear is that data and technology will be central to solving their problems.
Combining data from different sources – KYC, behavioural analysis and player profiling among them -– will ultimately provide the best protection, and greater collaboration between regulators, platforms and tech providers could work wonders for the industry’s growth. Responsibility falls with everyone: regulators need to be more prescriptive so operators can make the business case for introducing optimal solutions, industry bodies should promote adoption of new solutions from the top and operators themselves should ensure incentives are aligned.
We were delighted to start that dialogue at the Duck & Waffle, and to continue it at ICE, where we heard from more of the industry's leaders about the challenges and opportunities they're facing. Talk to us to learn more about we have planned for 2017 and how we could help you tackle the challenges ahead.