Player Location Check
Discover why player location checks are crucial for iGaming operators to ensure compliance and prevent fraud. Learn the challenges of the field and possible solutions, including the importance of tamper detection.
For those unfamiliar with the iGaming space, the concept of a player location check might seem foreign. What does it mean to check player locations, and why is it such a crucial step in the process for iGaming operators? In the world of online gaming, player location checks are an essential step that gaming operators must take to ensure that their players are playing within the confines of legal jurisdictions. This is necessary to ensure that players are not violating laws or regulations and that gaming operators are not subject to legal action for allowing unauthorized betting.
The Importance of Performing Player Location Checks in iGaming: Challenges and Solutions
The importance of player location checks cannot be overstated. For example, in the US, online gaming is only legal in certain states, and gaming operators must ensure that their players are physically located in these states before allowing them to place a bet. This is because each state has its own set of laws and regulations regarding online gaming, and gaming operators must comply with these laws to operate legally. However, ensuring players are located within the correct jurisdiction is not always easy.
The challenges of verifying player location
Gaming operators are faced with several challenges when it comes to verifying player location. One of the biggest challenges is technology limitations. While IP addresses can be used to identify a player's location, they are not always accurate, and players can easily use VPNs or other tools to manipulate location data gathered from IP address. Additionally, gaming operators must comply with various legal and regulatory requirements to operate in a specific jurisdiction, which can include obtaining licenses, paying taxes, and complying with strict reporting and record-keeping requirements.
Fraud prevention is also a significant concern for iGaming operators, especially when players are located in different jurisdictions. Operators must monitor player behavior for unusual betting patterns or multi-accounting to prevent fraud. Lastly, gaming operators must ensure that the player location verification process is seamless and does not disrupt the overall user experience. Players should be able to easily verify their location without encountering any technical issues or delays.
The process can be frustrating and time-consuming, decreasing user engagement and lowering player retention rates. If players are unable to complete the location check process, they may not be able to place bets, resulting in lost revenue for the operator. A negative user experience can cause players to be less likely to return to the platform in the future, leading to a decrease in the operator's overall user base and revenue.
In order to overcome these challenges, iGaming operators often use a combination of technology and human oversight. This can include using geolocation technology to pinpoint a player’s location and manually verifying player identity and location through ID checks and other means.
Past regulatory violations
Two major iGaming operators have faced penalties for allowing proxy betting, a practice where one person places bets on behalf of another player to circumvent location verification regulations. In March 2022, DraftKings was fined $150,000 by New Jersey regulators after a Florida customer was found to have placed out-of-state wagers through a proxy located in New Jersey. Similarly, Monarch Black Hawk Casino, which operates a sportsbook in Colorado, was recently fined $400,000 for allowing three employees to place 79 proxy bets worth over $60,000 for 11 different players. Proxy betting is against these operators' terms and conditions and violates state gaming regulations. These incidents demonstrate the importance of robust location verification technology and the consequences that operators can face for non-compliance.
How to select a geolocation compliance provider
IP-based location verification technology is generally less accurate than more sophisticated player location verification technology. IP-based location verification relies on the player's IP address, which can be easily masked or changed using a VPN or other tools. This can lead to inaccuracies in determining the player's actual location, resulting in false positives or negatives.
On the other hand, more sophisticated player location verification technology, such as geolocation technology, uses multiple data points to pinpoint a player's location accurately. This can include GPS data, Wi-Fi triangulation, and cellular data.
Geolocation technology can be more accurate than IP-based verification, making it a preferred method for gaming operators to ensure compliance with legal and regulatory requirements.
However, even with more sophisticated player location verification technology, there can still be challenges in accurately determining a player's location. For example, if a player is located near the border of two states or jurisdictions, it can be difficult to determine which jurisdiction they are actually located in. Additionally, some players may attempt to circumvent the location verification process using various techniques.
Tamper-resistant location verification
Tamper detection is an important feature of player location check technology because it helps to prevent fraud and ensure compliance with legal and regulatory requirements. Tampering refers to any attempt by a player to manipulate their location data to circumvent location-based restrictions or to engage in unauthorized betting.
With tamper detection, it would be easier for iGaming operators to distinguish between genuine location data and fraudulent or manipulated data. Tampering could allow players to participate in online gaming in areas where it is illegal or where they do not meet the necessary criteria to play. This could expose gaming operators to legal and financial consequences and damage their reputations.
Tamper detection works by monitoring various data points to detect any inconsistencies or anomalies in the location data. For example, it might flag a player who claims to be in one location but has a different IP address or uses a VPN to mask their location. By identifying these attempts at manipulation, tamper detection helps gaming operators to ensure compliance and prevent fraud, protecting both players and operators.
In conclusion, player location checks are a crucial part of the online gaming industry, necessary for ensuring legal compliance and preventing fraud. However, using the right geolocation is essential to ensure the process is fast, accurate, and user-friendly, minimizing friction and preventing player frustration. By prioritizing a seamless and user-friendly player location check process, online gaming operators can increase user engagement, retain players, and generate more revenue while complying with legal and regulatory requirements.