
Know Your Players: Why KYC is Necessary for Gaming and Gambling

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The post-COVID-19 era has witnessed a remarkable surge in the e-sports and gaming sectors. This thriving industry has not only captivated players but has grabbed the attention of criminals. Gambling regulators across the globe had a busy year in 2022, issuing a total fine of $269,532,490 to several land-based and online gambling operators. This is where Know Your Customer (KYC) verification comes to the rescue.Â
Let’s have a quick recap of financial penalties imposed by gambling regulators in the UK, the US, Canada, Sweden, and Australia in May 2023:
With technological advancement, scammers are also becoming smarter to bypass security checks and commit online gaming fraud. The gaming sector is the latest hotspot for criminals to fulfil their illicit intentions since the COVID-19 outbreak.
Here’s how scammers perpetrate online gaming fraud:
With every passing year, the gaming sector witnesses a surge in fraudulent activities, costing them in different ways as:
The consequences of chargebacks go beyond just financial implications. The process of analysing and disputing chargebacks demands significant time and effort. This may overwhelm the risk team and has a high volume of requests, putting an additional operational strain. Furthermore, excessive chargebacks can damage your relationship with card companies, putting your firm in an unfavourable standing. Also, the excessive chargebacks cost your firm a significant amount.
Bonus abuse and affiliate fraud are the main culprits here, as they may considerably reduce your Return on investment (ROI). The considerable time and effort put in to create an appealing strategy for attracting new players become useless when targeted traffic fails to convert into desired actions or valuable engagements.
Although esports gaming is relatively less scrutinised than conventional online gambling, regulators are expected to crack down on the sector increasingly. Several countries, such as Sweden, have started efforts to enforce more stringent regulations and impose hefty fines to protect gamblers.
Establishing safety and building trust is critical for every firm operating in the iGaming sector. Account takeovers not only cost the users financial losses but also reflect a susceptibility in the firm’s security measures. Thus, players promptly express their discontent on digital forums, damaging your company’s name.
KYC verification helps the gaming industry check the players who they claim to be by acquiring accurate personal information and authenticating their identity using official documents. This prevents players from creating fake accounts or using gaming companies for illicit activities. Not only does online gaming fraud detection help the sector keep scammers away, but it also protects the industry from heavy non-compliance fines.  Â
Shufti Pro offers AI-powered KYC verification services to gaming operators in 230+ countries and territories and supports 150+ languages. The robust verification solution verifies players within seconds, helping gaming firms protect themselves from fraudulent activities. Our KYC solution also helps the gaming sector abide by global regulations and avoid fines.  Â
Still confused about how a KYC verification solution mitigates the risk of fraud in the gambling industry?