Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
We read a lot about how well the online gambling and iGaming sector is doing. New advancements, revenue increases, plentiful opportunities- but what about the challenges? Every sector has its own set of obstacles to overcome to flourish, and iGaming is no exception. From advertising to financial crime, and hackers to increasing competition, let’s look at the ups and downs of the online gambling world.
Before 2020, there had been some changes to rules relating to gambling advertising. The start of the COVID-19 pandemic further accelerated this as regulators sought to protect players during a vulnerable time. Many jurisdictions imposed additional measures, including restrictions on when and where adverts could be shown, how often, and what the content should be. Some of these measures were temporary, but others have made lasting changes.
There isn’t much that can be done about new rules and restrictions. A way to preempt further clampdowns is by operators ensuring they stick to the rules and are ethical in the way they advertise. If they do everything above board, then there is no need for regulators to roll out additional measures.
Tighter responsible gambling rules
The focus on responsible gaming and gambling has also increased. This means there is more of an onus on operators to ensure that they operate fairly and transparently. This includes redrafting existing policies, being tougher with verification, and taking extra steps to ensure offerings don’t appeal to minors. Thankfully, some technological innovations are helping to make it easier for operators.
AI authentication and onboarding are being deployed along with biometrics to tighten up account security. These methods can accurately verify age and identity as well as compare identity documents with camera footage.
iGaming is booming and is expected to continue growing steadily over the coming years. Therefore, the number of online gambling platforms is also increasing. Of course, there is a steady stream of new players entering the market, but competition is tough. With so many online gambling and betting sites out there all competing for attention, entrepreneurs are having to carve out a niche.
But we are far from saturation point, and there are plenty of innovative technologies around that can help set providers apart. The use of cryptocurrency payments, blockchain gambling, VR, AR, and AI, and various other features can all help entice players. Additionally, verticals like eSports betting and fantasy sports betting are great ways to garner a loyal client base. If you keep your finger on the pulse, you can stay ahead of the competition and retain your edge.
Financial crime is worth billions, if not trillions every year. Funds derived from illicit sources such as crime and corruption need to be cleaned, and some online gambling companies have been used for this purpose. It’s your job as an operator to be hyper-vigilant and ensure that your business is not used for money laundering or facilitating the funding of terrorism.
Various measures can be taken to detect and even prevent your site from being used for criminal purposes. As a standard, most jurisdictions require you to have comprehensive and properly implemented AML/CFT policies. These include strict processes for onboarding, ongoing monitoring, and supervision of transactions. Anomalies must be reported to the authorities, and audits are often required.
Other measures can be taken by operators such as using AI onboarding and requesting identification before withdrawals and deposits. Similarly, only allowing withdrawals via the same method as deposits is another way to lessen the risk of money laundering and similar.
Operators need to remain on the ball because failure to do so risks tougher regulations and laws across the board.
With more people making online payments than ever before, the risk of cybercrime is increasing. Criminals and hackers seek to target sites where transactions are made regularly, such as gambling sites. Through various tactics like phishing, hacking, and viruses, they seek to steal users’ data and use it to make money. Sometimes data is sold on, and other times accounts are hijacked. Other instances include cloning credit cards and using the information to create fake IDs and accounts elsewhere.
While the threats posed by cybercrime are always evolving, technology is doing pretty well at catching up. Remaining a step ahead of hackers is a full-time job, and it’s something your IT team must pay full attention to. Virus software, cold storage, SSL encryption, biometric identification, and two-factor identification are a must, as is ensuring all software is up to date. You must also be careful when partnering with a third party, making sure they have the same approach to security as you.
If you’re an entrepreneur that wants to get to grips with these and prepare to face them, it’s best to chat with your corporate service provider. Approaching these challenges in the right way requires industry experience and expert guidance. None of them should stop you from going on to have a successful online gambling business, if you get the right advice.