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Gambling is without a doubt one of the earliest activities in which people all over the world have continuously participated over millennia, and it does not appear that it will lose popularity anytime soon. Businesses in the gambling and betting industries have begun to move their operations online since the dawn of the information age.
The global market for online gambling is expected to grow to USD 112.09 billion by 2025, up from USD 64.13 billion in 2020. This growth can be attributed to a variety of factors, including rapid internet penetration, increasing smartphone popularity, an increase in the number of businesses adopting freemium business models and developing cost-effective mobile applications, and, more recently, an increase in the number of partnerships between different betting companies.
There are 1.6 billion people who gamble regularly worldwide, but 4.2 billion admit to doing so at least once a year. This accounts for approximately 26 percent of the world’s total population, implying that there is a lot of money floating around.
The gambling industry, on the other hand, is notoriously difficult to track down, providing ample opportunities for money laundering. Because gambling establishments and betting businesses routinely handle millions of dollars, the possibility of money laundering in this industry must be seriously considered.
Artificial intelligence-powered KYC verification solutions protect businesses from money laundering. In the online betting industry, these solutions are quickly becoming industry standards. But, before we get into how, let’s take a look at the online sports betting industry as it exists in India.
In India, sports bets can be placed online
The Indian gambling market is expected to be worth more than one billion US dollars by the end of 2021, thanks to a steady inflow of real money investments at a rate of 20% per year and an annual user growth rate of approximately 50%.
According to surveys, forty percent of internet users in India have engaged in online betting for the year 2020. This means that approximately 220 million Indians participate in online gambling and betting each year.
Each cricket match attracts wagers ranging from USD 50 million to USD 60 million. Cricket-related betting accounts for the vast majority of “Indian betting.” Horseracing is a close second, with around 35,000 crores of Indian rupees wagered on each race.
When one considers that approximately 80% of illegal betting occurs on cricket and that 60% of all bets placed globally are illegal, these figures become even more concerning. The black market gambling industry in India is estimated to be worth slightly less than one billion US dollars.
As a result, businesses dealing in sports betting in India must make an effort to combat a variety of challenges, including those caused by illegal betting and gambling. What exactly are these challenges to be overcome?
Obstacles in the Industry’s Online Betting Sector
The betting and gambling industry has made significant efforts, with positive results, to dispel its image as the seedy underbelly of the financial sector. The reclaiming of gambling as a legitimate industry on a large scale has coincided with the rise of online gambling as a significant force in the industry. However, because of the nature of the business sector as a whole, it is vulnerable to several challenges.
The prospect of financial gain motivates fraudsters to engage in spoofing and phishing activities. These attacks are carried out to exploit any security flaws that may exist in the betting service provider’s mobile application or website to steal the user’s identifying information and financial data.
Money laundering dangers
Regulators and authorities have been keeping a close eye on the gambling and betting industries for a long time due to the widespread practice of money laundering within these industries. Businesses associated with betting and gambling make excellent fronts for money laundering due to the high volume of cash handled.
Permission is conditional on certain conditions
Another barrier for betting and gambling companies in India is the ambiguity of the country’s gambling legal framework. Individual states must decide whether gambling should be legalized, and the majority of states base their decision on whether the betting activity is “skill-based” or “chance-based.” Every state in India allows the practice of gambling in the first category.
The onboarding process is excruciatingly slow and exhausting
Before anyone can be allowed to gamble on online platforms in India, their age and identity must be verified. The process of verifying an individual’s identification usually takes several days, owing to the fact thatbecause documents must be verified. Furthermore, the procedure has been described as extremely time-consuming and frustrating. This results in a significant drop-off rate among users and discourages users from attempting to sign up for the service again. Strong Know Your Customer (KYC) verification provides a quick solution to some of these issues.
Why is digital know-your-customer verification required for online gambling?
In the early 2000s, the rise of online finance coincided with an increase in online fraud and money laundering. This trend persisted until strict AML (Anti-Money Laundering) and KYC (Know Your Customer) procedures were put in place to combat it. It appears that the cases of online gambling and gambling are quite comparable.
Because criminals can commit money laundering activities more easily when they can forge their identities and create fake accounts, any procedure that makes it more difficult for criminals to do so will benefit the online gambling industry. The AML and KYC verification processes were created with this goal in mind.
KYC verification service providers can now use optical character recognition (OCR) technology to extract image data from IDs and artificial intelligence technology to verify ID details in real-time against standard databases, thanks to recent technological advancements. Geo-tagging capabilities protect against location spoofing, and PAN verification allows for quick AML checks.
Service providers such as SignDesk use machine learning-based fraud filters to weed out fake profiles and fraudulent IDs to reduce the risk of identity fraud and protect their customers. How does identity and age verification benefit the online gambling industry?
Identity and work authorization verification Know Your Customer (KYC) verification solutions, particularly video-based KYC solutions, are expected to play a significant role in the field of online gambling shortly. The following are some of the benefits that industry participants can expect from an AI-powered KYC verification solution:
Reduced potential for money laundering
A solid know your customer verification solution will detect and flag potential fraudsters before they get their foot in the door. SignDesk’s video-based Know Your Customer (KYC) verification solution employs advanced facial matching techniques to ensure that all users are who they claim to be.
There are fewer instances of fake profiles
KYC verification systems with machine learning are capable of detecting forged documents, fake IDs, and altered images. Because of the high level of accuracy provided by these KYC solutions, it is extremely difficult for dishonest people to commit a crime.
Onboarding that is both quick and inexpensive
Because of automated KYC verification, users can be onboarded quickly and securely in five to ten minutes. The streamlined nature of the onboarding process reduces the percentage of users who abandon their registrations during the signup process by approximately 60%. Finally, the costs associated with digitally verifying customers’ identities are 85 percent lower than those associated with the traditional KYC process.
High levels of employee retention
Players in the online gambling industry have a difficult time proving their identities due to the disorganized nature of the process, which is a major problem in the industry. The use of digital KYC verification streamlines and simplifies the onboarding process for customers, which helps businesses increase customer retention.
Due diligence automation
A digital or video-based KYC verification solution is both secure and customizable, allowing businesses to automate significant portions of their due diligence processes. User records, as well as identifying documents and details, are kept in a secure location to facilitate audits and compliance.
As a result, the Know Your Customer (KYC) verification process plays an important role in the online gambling industry. This procedure helps to prevent crimes, improves due diligence, and saves money.
The BFSI sector, which faces many of the same challenges as the online gambling industry, has made AI-powered KYC verification a standard practice. This has become the industry standard. With the help of video-based know your customer (KYC) solutions, the BFSI sector is overcoming challenges such as money laundering, ID fraud, and cybercrime.
SignDesk is an experienced and award-winning provider of document automation and KYC verification solutions to over 350 clients, including 60 major banks. Many small and medium-sized businesses are among these customers. Our solutions can perform secure identity verification for users in real timereal-time, resulting in significant improvements in both client productivity and security. Our Know Your Customer (KYC) verification solution has helped our clients save up to 120,000 hours per customer, cut onboarding costs by 85 to 90 percent, and increase audit efficiency by 60 percent.
Are you curious about how our Know Your Customer verification can help players in the online gambling industry join safely and securely? Schedule a complimentary demonstration with us right away!