The UK gaming sector has almost doubled in size over the last decade – reaching £14.4bn GGY today. This is thanks to changes in technology that have made gaming more accessible, improved the user experience and expanded the choice of games far beyond what was thought possible just a few years ago.
As exciting as this technological change is, it has resulted in regulations being left behind—particularly when it comes to verifying the age and identity of gamers.
Recognizing this, the UK Gambling Commission (UKGC) believes it is time for the iGaming sector to revisit several decades-old regulations to ensure they reflect current technology and to make the industry safer and fairer for all users.
New age verification rules
Developed following an open consultation with the industry at the end of last year, new rules are now in effect that requires online operators to verify customer age before funds may be deposited into an account or gamble including free to play bets. According to the UKGC, these rules are here to prevent underage gambling, regulate age and identity checks, and improve the overall customer experience.
This is the first update to age and identity provisions since the Licence Conditions and Codes of Practice (LCCP) was introduced a decade ago. As noted by the Responsible Gambling Strategy Board (RGSB) and UKGC during the 2018 open consultation, the LCCP’s 72-hour requirement to verify age and identity of new gamers is now obsolete, thanks to new technological advances.
Specifically, the new generation of application programming interfaces (APIs) can verify age and identity within minutes, automating what used to be a manual process. As a result, operators can verify in real-time instead of days, meaning they are no longer at risk of losing potential customers due to time-consuming verification processes.
But, there is still a possibility, if a player cannot be verified using new methods, operators may have to direct some players to a manual verification process in order to meet the compliance standards.
Rules for operators
The new regulation requires operators to verify, at minimum: the name, address, and date of birth of a customer before allowing them to gamble.
Operators must ask for any additional verification information promptly. They are also required to inform customers, prior to the deposit of funds, of the identity documents that might be required along with the potential circumstance in which the information might be required. And provide guidelines on how that information should be supplied to the operator.
Lastly, operators must take reasonable steps to ensure the information on their customers’ identities remains accurate.
Benefits for operators
Just like with other new regulations, operators can expect initial friction, increased operational costs, and possible customer drop off. However, the legislation offers considerable benefits, especially when it comes to customer experience.
Preventing users from playing until the appropriate age and identity checks have taken place will create friction but, as long as they understand the need for these checks, customers can grow to trust operators more.
This, in turn, could help encourage greater spending on operators’ sites. According to the UKGC, a significant portion of complaints about operators come from valid consumers being unable to claim large winnings due to faults with the current age and identity verifications. As such, improving processes will benefit both parties.
Nevertheless, customer drop-off remains a concern, as not all customers will want to spend time going through complex rounds of identity checks. Ultimately, operators are responsible for optimizing the customer journey while complying with regulations.
There are tools that can help achieve this balance, by checking for fraud from the first point of contact. Email risk assessment tools, for example, use more than 200 data points, including name, address, email, and IP, to help verify a potential customer’s identity. This rigorous check produces what we call a risk score, that alerts operators when a customer may not be who they say they are.
Once operators have the risk score, they can set thresholds for accepting or rejecting potential customers. This will save operators money by segmenting good customers from suspect users long before any age verification process takes place.
What can operators do?
With the new regulations now in effect, operators need to make sure they have compliant age verification processes in place.
Additionally, operators need to think about how to support customers who may not have a valid driver’s license or passport. As around 25% of legal age gamblers in the UK do not have this type of documentation.
Other industries are attempting to answer this through in-store purchasable activation codes, digital wallets or passes to prove identity, or even by accepting birth certificates. Operators might need to adopt temporary measures until they find a compliant variation of documents or solutions to prove a customer’s age and identity.
The next few years will likely see additional innovation and investment within the age and identity verification space. And solutions such as email risk assessment can support compliance without adding friction by identifying high-risk players from the beginning. This will help operators focus investing and supporting age and identity verification efforts on the low risk players – reducing manual reviews and saving time and money while providing the best user experience.
Overall, this regulation will
be a win-win situation for everyone, while at the same time taking the
necessary steps to making gambling fairer and safer for all.