The season of change is well underway in the US, and new entrants are vying to reap the huge opportunities of regulated sports betting. Fraud, however, poses a serious and increasing threat in this developing environment.
But there are four simple rules that potential stakeholders can use to protect themselves from unnecessary risk and lay solid foundations for success, according to Scott Olson and Jon Karl from fraud experts iovation.
Meet regulatory requirements
Robust KYC checks, self-exclusion procedures and geolocation technology are the minimum standard for getting licensed and doing business in the US. Sports betting being rolled out on a state-by-state basis has heightened the importance of having an accurate and robust system for identifying where players are located in the US relative to other regulated markets.
The pair say some sports betting operators are seeing as much as 90% of their bets coming through their mobile apps, making the channel paramount to regulatory compliance Stateside. It can take advantage of the geolocation information from the phone and is therefore considerably more accurate.
Streamline the player experience
Players must be able to open an account and make deposits, bets and withdrawals frictionlessly. Authorization and authentication also need to be consistent.“You should be able to do the same thing at login that you do if you’re making a withdrawal, and some of these controls should be in the hands of the player,” says Olson.
These interactions come with fraud risk, which iovation addresses using technology built into mobile apps. Olson says “You can use facial or fingerprint recognition or more traditional methods to authenticate your customer, all while injecting fraud intelligence so that you can make the right decisions in real time.”
Protect player accounts
Create a system that both authenticates the user and flags risks, such as whether devices or users have a history of fraud. New US entrants are focused on marketing and operational compliance, says Olsen, placing them at greater risk than more experienced international operators: “There’s going to be a lot of predatory behavior directed at businesses and they need to wrap that into dealing with regulatory requirements, player experience and account protection.”
Learn from your peers
As well as learning best practice from European counterparts, interaction with US peers already working in sports betting is valuable too. Karl points to the need to have the right tools to mitigate risks associated with sharing data across different regulatory and privacy frameworks.
Iovation’s platforms for sharing data on confirmed fraud are designed so that information can be submitted identifying customers using a device with a bad reputation, who can be blocked. Karl adds: “We also host a community on our system, FraudForce, for sharing information in real time and data on specific fraud problems. We facilitate that with physical user groups too.”
Jon Karl is executive vice-president of corporate development and co-founder at iovation, a TransUnion Company. He develops technology and information partnerships.
Scott Olson is vice-president of product marketing at iovation, focusing on understanding and supporting the most pressing customer needs.