The gaming industry faces its own unique set of challenges. Therefore, it is important to learn as much about them as possible in order to be able to apply the most effective solutions.
Well, one thing is for sure – gambling has changed in recent years. But what exactly has changed? Most notably, the way in which people gamble and who the players are. By 2020, younger millennials and some Gen Z representatives are expected to make up nearly half (40%) of game consumers.
Perhaps unsurprisingly, these young players (aged 18-21) prefer to place their bets digitally; largely on their mobile phones. But that’s not to say that the older generation has completely abandoned their gambling habit. In fact, players over the age of 60 are currently spending more than double the amount they did just a decade ago.
Unfortunately, with increased interest in online gambling comes an increase in cybercrime. As such, online gambling consumers risk their sensitive personal information being stolen when they sign up for an account.
This problem is so widespread that according to ThreatMetrix Gaming and Gambling Cybercrime Report, 1 in 20 new online gambling accounts is fraudulent. Whereas bot attacks are responsible for almost half of daily gambling traffic at peak times.
Perhaps somewhat surprisingly, the riskiest element of online gaming actually takes place at the beginning of a consumer’s journey, as it relates to the registration and account creation process.
That’s why it’s incredibly important to talk to your payment processor and ask what kinds of features they’re able to offer that aim to protect your business and your customers’ sensitive data from fraud – from day one.
Dealing with scams when it happens is not as effective as preventing it from occurring in the first place – which is why it’s so important to find a payment provider that knows your industry’s specific needs and that will implement smart anti-fraud filters that will be able to accurately distinguish your legitimate customers from scammers.
However, on the other side of the fraud prevention medal, anti-fraud filters can grow to become overly sensitive, leading to a reduced acceptance rate for payments, lower conversion rates and frustrated customers.
This is also something to keep in mind, especially since you have an online gambling trading account, you’re likely to see significant increases in payment volume in short bouts of time – putting your merchant account at risk of being incorrectly flagged for fraudulent activity.
If this happens, your merchant account may be temporarily frozen, which means that your customers will not be able to complete transactions and you will be prevented from running your business operations.
To get ahead of this issue, make sure that your payment processor will be able to implement smart, automated anti-fraud filters that will be accurate enough to mark only 100% fraudulent transactions. This will ensure that all your legitimate customers can seamlessly get through the checkout process and thus also help protect your revenue stream from losses.
Laws, regulations and administrative provisions
The European market is the most important market for online gambling, with its revenues accounting for almost half of total revenues. However, the EU as a whole does not have a unique common policy regulating online gambling and, as such, the regulation of these activities is the individual responsibility of all EU Member States.
This means that online gambling traders have to keep abreast of any developments within their geographic markets, to ensure that the rules they follow do not become obsolete. For example, British and French merchants who run their online gambling businesses in said regions need a domestic license to do.
However, there are some common features among EU Member States when it comes to rules for online gambling commercial accounts. Most notably, this regional market’s strictest rules relate to Know Your Customer (KYC) and Anti-Money Laundering Rules.
As such, any online gambling consumer must be properly identified in order for traders and acquirers to be able to assess money laundering and other crime risks associated with their online account.
And despite the fact that the United States is a sovereign country, the rules of online gambling also differ from state to state. For example, from 1992, it became illegal to place bets on sports in most places across America.
But most don’t mean everyone, and sports betting is still legal in certain states – namely New Jersey, Nevada and Delaware. Nevertheless, it is the online gambling merchant’s responsibility to stay properly informed about changes in the law that relate to their industry.