If you’re like me, you’ve observed the ongoing daily fantasy sports (DFS) kerfuffle with more apprehension than amusement.

Over the past two years, we’ve seen the DFS industry come into its own by expertly providing a popular form of iGaming and building an impressive market share. If you weren’t participating in DFS yourself, chances are that you knew at least one person who was. The fall is usually dedicated to the NFL; but this past season America paid as much attention to DFS as they did to football.

But then the DFS industry stumbled. State attorney generals and regulators declared DFS to be a form of iGaming, the courts more or less agreed—and we learned that many (but not all) of the major operators had failed to implement basic safeguards to prevent fraud and underage play. The DFS honeymoon ended with a number of statewide cease and desist orders. Many in the mainstream business media reported on how the DFS stumble negatively affected its investors, but few mentioned how the greater gaming industry’s credibility took a hit as well.

Over the past few years, our industry worked hard to build credibility through licensing and regulation of iGaming sites. Casinos in Nevada, New Jersey and Delaware laid the groundwork and took great pains to get things right. Casinos in other states like California, Pennsylvania and beyond are ready to move forward just as soon as their state legislatures iron out the details. 

My point is that we’ve made great strides with iGaming by developing advanced technology—and DFS would be wise to stop playing the industry bad boy and follow the path forged by casinos in New Jersey, Delaware and Nevada. Regulatory technologies can be economical to access and can help DFS sites build recognition and respect among regulators as well as the general public. Here is how it’s done:

LOTS OF SaaS

The industry standard for verification and fraud detection in iGaming is a solitary 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?

Licensed and regulated sites employ the above standards to ensure that the iGaming experience is safe as well as enjoyable. Companies like IDology (U.S.) and GB Group (global) are experts in identity and age verification, ensuring that players are of legal age. Kount and ThreatMetrix use dozens of data points gathered from a web visitor’s session, so that the true identity of the visitor can be determined, and that every log-in is completed by an authorized person using an authorized device.  MaxMind and LocationSmart handle geolocation, ensuring that players are within state boundaries regardless of which device they may choose.

GOOD GUYS OF GAMING

By combining these “good guys” of iGaming, the industry benefits from a verification and detection platform that quickly and efficiently addresses age, identity, location and fraud detection. If the first provider cannot provide a definitive answer, the query is then cascaded down to the next vendor to obtain an answer. Within the time it takes a player to register, a robust verification and fraud detection system can handle every element of state-mandated authorization. It’s an efficient and affordable method by which any iGaming site can meet and exceed a state’s regulatory requirements with a 95 percent success rate. 

Once age, identity and fraud detection are addressed, DFS sites can attend to other concerns such as money laundering, payment connectivity and tax calculations, via 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.

Simply put, the table is set for the DFS industry to come in from the cold and shrug off their bad boy image by implementing the same protocols as the rest of the industry. Licensing and regulation are the keystones to our success. We look forward to expanding the industry alongside the DFS providers.