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Know Your Player – Preventing Identity Fraud in Sports Events

  • Richard Marley
  • March 03, 2022
  • 6 minutes read
  • 7978
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The ongoing trend of globalizing sports activities since the last few decades has resulted in a larger number of spectators and improved business for organizers. Wherever there are sports events, there is also betting. In many parts of the world, betting is a legal activity that contributes to the financing of sports activities in the form of public lotteries.

Just like online gaming and gambling, sports betting is also known as the source of numerous fraudulent activities. Manipulation in betting and sports is something that has negatively affected both the reputation of sports organizers as well as players.

An Overview of Fraud in Sports Events

In 2020, major European football clubs were sponsored mostly by betting operators after retail operators. According to industry experts, EURO 2020 contributed to improving the economies of nations that participated. During the month when EURO 2020 was held, a significant rise was seen in the profits made by small businesses, pubs, and food delivery services. Apart from the usual businesses, sports betting also saw an increase in the number of customers. This surge in the traffic on online sports betting platforms means a subsequent rise in fraud cases, where fake identities are used to gain access to betting accounts and defraud the platforms.

The gaming and gambling sector is especially prone to financial crimes like money laundering and terrorist financing. According to reports, a whopping 30 million pounds was gambled across the prominent gambling platforms in the UK last year. That being said, a major concern for online sports betting platforms is when minors get access to such services. According to the Federal Trade Commission, not only do children develop addictive gaming habits, but up to 50,000 children under the age of 17 have accessed online gaming platforms. 

Considering the access to age-restricted content by teenagers, new and updated anti-money laundering regulations now require online sports and betting platforms to carry out identity verification and age verification before onboarding new players. Both financial regulators and gambling associations that license sports betting platforms impose these regulations. Online sports and betting platforms that incorporate age verification solutions can prevent themselves from becoming part of scams leading to serious crimes like fraud, money laundering, and terrorist financing.

E-Sports and Gaming

Technological advancement in the form of e-sports and gaming platforms has also negatively affected the sports landscape throughout the world. The E-sports audience grew from 380 million users in 2018 to 557 million in 2021. While these platforms connect players from various locations to play together, they also provide a certain level of anonymity. The personalized in-game purchases and levels are all accessed by fraudsters once the login credentials belonging to a player are stolen or their ID is hacked. 

There is also the factor of corruption within sports and betting organizations. Every sport and every industry where finances are at stake are vulnerable to criminal entities and organized crime. Football in particular has been repeatedly targeted by illicit crime groups as a medium for laundering illegally obtained funds. Lack of KYC verification and AML screening enables fraudulent entities to capitalize on the absence of transaction monitoring systems. Moreover, the involvement of third parties often makes football clubs susceptible to fraud, especially in difficult times like the COVID pandemic.

sports betting statistics

Know Your Player – One Solution to Many Problems

Unlimited availability of the internet in smartphones has enabled more children to interact with applications and get access to services that are sometimes not meant for them. It’s easy to blame parents for not being able to keep minors from accessing online betting platforms, but the problem is much bigger than that. While parents cannot promise that their children will not be allowed to open a betting application on their mobile phones, the sports and betting platforms themselves also have the responsibility to incorporate checks that deny the provision of age-restricted services to minors. When it comes to online sports and betting platforms, both AML regulations and social responsibilities need to be considered. Age verification as part of Know Your Player verification enables the platforms to establish dominance in the market by creating a fraud-free environment.

Identity Verification

The old ways of performing identity verification simply fail in today’s times when fraudsters are constantly evolving in their methods of carrying out fraud. 

Know Your Player is a solution that performs complete verification of players registering on a sports and betting platform. The process comprises AI-based identity verification which requires players to submit their identity documents. The information on the ID document is then compared against the Know Your Customer (KYC) information entered by the player. 

However, there is the issue of personally identifiable information being sold on the black markets, which can be accessed by fraudsters looking to make a big profit. A significant percentage of children gamble using online betting platforms through their parents’/guardians’ accounts. Some of the online sports and betting platforms have opted for Video KYC for player verification with a  KYC officer in order to further reduce the risks of fraud. The video of the player is matched with their photo on the submitted identity document in real-time.

What Shufti Pro Offers

Online sports and betting platforms are clearly vulnerable to surging fraud and sophisticated ways that fraudsters adopt for financial crimes like money laundering and terrorist financing. To prevent sports and betting platforms from becoming victims of never-ending fraud, Shufti Pro offers a robust Know Your Player verification solution. By verifying the identity and age of players at login, sports and betting platforms can stay compliant with international standards while securing the interests of their customers.

Shufti Pro’s state-of-the-art identity verification services are an ideal solution for businesses seeking to provide online gambling and gaming services. AI-powered ID verification solution allows companies to determine the real identities of customers before getting them on board. Shufti Pro also provides robust AML screening services that can thoroughly verify clients against 1700+ financial watchlists with 98.67% accuracy in less than a second. 

Want to learn more about Know Your Player verification for online registration of players?