There is no doubt that the Internet has changed the ways in which we view gambling. Across the U.S., poker nights organized around a friend’s dining room table steadily evolved into long-distance online poker tournaments. Savvy casino operators maintain direct marketing channels to their players via email, social media and interactive web sites. The dawn of licensed and regulated interactive gambling is upon us.
Matthew Katz
Matthew Katz

At last count, more than 18 states are in the process of introducing legislation or adopting a framework for licensed intrastate Internet gambling. A Nevada-licensed operation launched an Internet poker platform in April. Delaware and New Jersey are following suit. Michigan and Kentucky are slated to offer their state lotteries online by or before 2015.  Meanwhile Illinois and Georgia already placed their lotteries online, enabling citizens to log on and play their numbers without ever having to visit a convenience store.

Simply put, legal, licensed and regulated Internet gambling is here and its popularity will continue to grow as more states come online in 2014, 2015 and beyond.

How did we get so far so quickly? Well, we’re actually behind the curve with respect to western Europe. The advantage is that there’s no need to reinvent the wheel. Technological advances in age verification, identity verification and fraud detection have started to put government regulators’ and financial institutions’ collective minds at ease. The ability to quickly and efficiently authenticate players, identify underage gamblers, high-risk players and fraudulent activity are the secret behind building a robust, efficient and trusted gambling platform that government regulators can accept.

Equally important is the ability to record and levy taxes online and in real time.  Winnings can easily be recorded online and taxes can be collected when a player cashes out. No need to wait until April 15.

The current industry standard for verification and fraud detection is a single Software as a Service (SaaS) platform that employs the power of third_party vendors including credit bureaus, phone verification services, age and ID verification services, credit card credential management services and more. Each player registration and sign-in is subject to a cascading process of verification from the above services and bureaus ensuring that six basic queries are answered correctly:

• Who is accessing the platform?

• What information might they try to hide from the operator?

• Where are they located? Are they in a jurisdiction where Internet gambling is permitted?

• When they connect, is it via a recognized or registered device?

•Why is the user accessing the platform?

• How are they playing and is their style of play different from normal?

The right verification and detection platform can quickly and efficiently address these queries. If a service or bureau cannot provide a definitive answer, the query is then cascaded down to the next vendor to obtain an answer. In the time it takes a player to register, a robust verification and fraud detection system can make one of three key determinations:

• Verified age and identity

• Underage

• Further confirmation needed

Combining the power of third-party vendors into one integrated platform provides an affordable and highly effective way for gambling sites to meet and exceed a state’s regulatory requirements. The right solution can attain a 95 percent success rate in verifying age and or identification (the remaining 5 percent may be barred from play pending further confirmation), thereby avoiding costly public relations disasters related to underage players, problem gamblers and more.

 Once age, identity and fraud detection are addressed, other concerns such as money laundering, payment connectivity and tax calculations can be addressed by the same integrated platform. Ultimately, the goal is to provide a player experience that is seamless and fun on the outside while ensuring fraud detection, regulatory compliance and security on the inside.