Organized crimes are seen proliferating in the sports industry ever since it went digital. The increase in identity theft, money laundering through betting, cybercrimes, and others are subjecting e-gaming platforms to strict regulatory standards and authoritative supervision. Criminals looking forward to laundering big sums of money exploit weaknesses within the sports industry. The loopholes within Anti-Money Laundering (AML) and Know Your Customer (KYC) controls further pave the way for fraudsters.
After retaining over 2.5 billion e-gamers, the global sports industry is further forecast to reach $256 billion by 2025. Concerning this tremendous growth, regulatory bodies are placing necessary restrictions in place to combat fraud attempts. This blog includes ways identity verification services secure the sports industry and help it combat illicit activities.
Identity Verification Services – Identifying Forms of Illicit Activities
Betting within the sports industry is growing into a multi-billion project as criminals are targeting online games to launder the proceeds of crimes. Due to lax regulatory checks as well as insufficient ID verification mechanisms places enough room for fraudsters. By using synthetic identities, fake profiles, and illicit funds, criminals carry out malicious activities. Considering this rise in fraud attempts, regulatory authorities are moving up a gear while urging gaming platforms to perform identity authentication along with due diligence.
The popularity of sports such as horse racing, American football, baseball, and cricket is becoming a major attraction for criminals. With the availability of seamless digital onboarding and e-payment, it has become easier for fraudsters to either launder money or reap other benefits.
Furthermore, online sports are bringing high revenues in return for the industry through sponsorship deals, ethical betting, and broadcasting. However, in all these progressive efforts, e-gaming platforms need to build efficient ID verification mechanisms to ensure they are assisting legit players. Moreover, remote betting, easy online deposits, and other such innovations are increasing the chances of fraud risks. More details regarding the types of criminal activities the e-sports industry faces are in the next section;
One of the major criminal threats the sports industry faces is the dramatically increased risk of money laundering. Fraudsters are deploying various schemes such as using synthetic identity fraud to steer clear of the identification process. Furthermore, through betting, criminals flow their ill-gotten funds and lax AML regulatory checks help them escape easily. Due to the availability of online betting options, it gets somewhat challenging for the e-sports industry to identify traces of money laundering.
The gaming industry needs to incorporate robust identity verification services along with efficient AML controls. Firstly it will authenticate players’ identities in real-time and secondly, e-sports platforms can validate sources of funds while cross-checking backgrounds. Ultimately, identity verification services help online platforms can keep track of players especially when they place bets or use the money for other gaming purposes.
In recent years, the popularity of e-gaming has attracted organized crime groups. They either target online platforms to wash illicit money clean or perform other illegal activities. For instance, embezzlement, corruption, payment fraud, and stealing identities of legit players. Therefore, e-sports platforms attracting and facilitating drug cartels, money laundering groups, and other mafias are more subject to regulatory scrutiny.
For the sports industry, it has become a liability to stay a step ahead of criminals. Due to anonymity, fraudsters easily bypass identity authentication checks and use ethical betting to further hide their malicious intentions. In return, these criminals expose online platforms to reputational damages and high risks of AML non-compliance penalties. However, with biometric identity verification systems in place, the e-sports industry can better validate players by ensuring they are present at the time of onboarding.
Illegal Betting Cartels
For legal betting, there are different syndicates available that have members from all over the world. These players have common interests and undergo identity verification to ensure legit individuals are part of the board. In order to place their intentions into action, criminals try to pitch these groups, pay the joining fee, create an account, and deposit money for betting. However, the syndicate is unaware of whether the funds are coming from legit sources.
Criminals using this type of fraud compromise integrity, authenticity, and legitimacy of the whole group. They further expose them to legal repercussions. This requires online gaming platforms to integrate better ID verification services. Where criminals use synthetic identities to bypass the validation checks, digital onboarding solutions serve as sure ways to identify them.
AI-powered solutions are bringing accuracy to the e-sports industry by providing real-time identification, liveness detection, and other identity theft protection mechanisms. Online ID verification services further allow gaming platforms to access global watchlists for players’ risk assessment and cross-validating backgrounds. Ultimately, the e-sports industry can not only stay put with regulatory standards but also provide a secure betting and gaming experience to legit players.