Gambling on a regulated future
Increased governmental & regulatory bodies within the gaming and gambling vertical have, on an international scale, driven the requirement for greater compliance to safeguard player and business alike. However, the directions from organisations often require online operators to change their usual operational flow, affecting their activities within any given market, sometimes with very little time for the businesses associated to meet the demands imposed.
Increases in the costs associated has meant many gaming companies are feeling the pinch of lessening margins, due to restrictions placed on their activities and increased costs in staffing and training specific departments, in order to remain complaint. Those that don’t are subject to financial implications in the form of enormous fines. £39m in fines were issued in H1 2020 within the EU for non-compliance of regulations, up from a total of £16m in 2019. Fines are leading increasing amounts of companies to either invest hastily, on technology, increasing their staff count significantly, or pulling out of the country entirely.
There are also worries of ‘dotcom’ brands continuing to operate on the black market, away from commission scrutiny, completely unchecked. A 2017 report from GambleAware stated that “the inconsistent commitment to responsible gambling is linked to players leaning towards less scrupulous providers”.
Lack of accompanying technology and processes, such as Scout™, has led to 1 in 20 gaming accounts connected to fraud and 25% potential gaming customers abandoning account completion due to length & complexity, affecting potential revenues. 67% of operators siting accurately identifying customers ‘as important as safeguarding against co-ordinated online attacks’.
Within the past five years, gambling-related fraud increased by 155% with an average annual growth of 39%, with 68% of online gambling companies have had to increase their AML and KYC budgets as a direct consequence. On average, these companies are spending 74% more on regulatory compliance than only 5 years ago.
As a consequence, there is a wider impact to the industry as a whole, as many suppliers to the gaming industry are experiencing the negative trickle-down effect of these measures and increased spend. Despite the required increase in investment, the quality of output often remains subject to error and is time-consuming when relying solely on human judgement, with many companies bemoaning lack of available tools to help efficiency. The demand for solutions has never been higher, due to increased use of new fraudulent models that mirror the demand of the increase in gaming services.
11% of global traffic was attributed to online betting in 2018, with increases in technology and new verticals (such as eSports) growing exponentially, it is vital that gaming companies seek out the right tools available to them to help automate and augment these activities, with the goal of increasing efficiency of the business and wellbeing of their customers.
For that demand of safe gambling options and revenue generated by businesses to be met safely, the need for increased responsible gambling, compliance and due-diligence technology such as Scout™ grows in tandem to be able to meet demand.
