The idea remains as simple as ever: Put down money on a team or athlete because of fandom, a hunch or a considered view, and then hope to turn a profit. But since the U.S. Supreme Court ruled earlier this year that states can allow sports betting, the world of gambling now promises to gain more of a digital edge.
The complications — and opportunities — of turning that ruling into actual online commerce was the topic of a recent interview Karen Webster conducted with Zac Cohen, general manager at Canada-based consumer verification firm Trulioo.
As one can easily imagine, that ruling, and the revenue it promises, presents money-making opportunities for such firms — not only for age authentication, but also in the compliance and risk management services that can keep online gambling providers from losing money, reputation and brand value.
Market Size
Since the Supreme Court lifted the betting ban in a 6-2 decision, companies have begun aggressively chasing opportunities to cater to this new $2 billion to $6 billion market. Experts estimate the total size of the illicit sports betting market ranges from $80 billion to $150 billion wagered annually. The ruling also opens the doors for fantasy sports companies like DraftKings and FanDuel to expand their offerings and convert customers to more traditional betting activities.
Planning for that new business continues in the wake of the Supreme Court decision, Cohen said. “The expectation is that there will be a lot of expansion or new business opportunity,” he said. “Now the compliance officers and risk strategists are gaining a seat at the table for that planning.”
After all, he said, “the fastest way to crash a service, or not make it tenable, is to pump in a lot of fake users.”
Verification Tools
The way a company like Trulioo helps its online gambling clients avoid such a non-lucrative fate are through geo-location and age verification protections, helping to ensure that the betting providers are complying with the laws of the states in which they are operating. Proper checks of clients also help those betting providers avoid money laundering risks.
Cohen described technology that can take a user’s mobile phone number and match it with carrier data to verify age, address and other identifying details in a way “that’s more real-time” than some other methods. His company can also make it possible for gamblers to offer up documents such as passports and drivers’ licenses as part of the verification and authentication process.
As online sport betting gains steam in the United States in the aftermath of the Supreme Court ruling, the gambling providers will have to be prepared to work with multiple regulations and laws governing the activity.
According to Cohen, some states will have “prescriptive” rules, with “step-by-step” explanations and expectations for those providers to follow. Other states will take a “broader approach,” with providers given a choice about what works best to make money while conforming with regulations.
In a sense, companies getting into online sports betting in the United States will be working with 50 separate countries — which serves as an advantage to Trulioo and competitors, which already have experience with providing the technology behind similar commerce endeavors in Asia and Europe.
“You can look at our friends and neighbors across the pond and see how it’s been done before,” Cohen noted.
Worst Cases
But a general theme can serve to unite all those efforts, even with the inevitable variations in regulations: Prepare for the worst-case scenario. “Build for that,” Cohen said. And that means planning and testing — building systems for different use cases (remember, betting involves real-time, quickly moving events) and the right amount of A/B testing. “And you want to bring on the compliance and risk vendors early on,” he added.
So, place your bets — that call likely will reach more willing consumers in the coming months, many of them drawn by the ease of doing so via a digital channel instead of heading to a casino or breaking the law and employing the services of a bookie. Digital technology firms will certainly play the odds and find profits along the way.
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