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Sports betting is huge, and so are its verification needs

Sports betting is huge, and so are its verification needs

Brazilians needing another category of advertising during sports broadcasts can rest easy. Sports betting (and all that ad revenue) could soon be legal in Brazil, where a bill awaits the president’s signature.

Watching this process avidly is CAF, a digital identity company putting AI to use in document verification and digital onboarding.

The Brazil-based firm is working with national sports publisher Lance! and Maltese gambling company Eyas Gaming to manage live age and identity verification and other KYC tasks for a new digital gaming service for Brazilians.

In a blog post, CAF Director of International Expansion Emma Lindley writes that, with over 200 million people and deep enthusiasm for sports, “Brazil represents a great opportunity for bookmakers.” The country has a large grey market for bookmaking, valued at 7 billion real, or $US1.5 billion, last year.

“Gambling operators that can quickly and accurately identify customers and conduct age verification, provide a great user experience and fight fraud will become the market leaders,” Lindley predicts. “The new Brazilian regulations put a big emphasis on player safety and that is a priority for us” as well.

Brazil might want to look to the United States as an example of a country where online gambling has exploded.

U.S. law firm Perkins Coie notes that 36 states have legalized sports betting since 2018 and that some form of online gambling is legal in 48 states, plus the District of Columbia.

While gambling in the United States clearly presents significant opportunities, it also presents compliance risks “created by the unpredictability of law enforcement efforts” by the many jurisdictions involved.

U.S. regulators, which had taken a light touch with web- and app-based gambling, might want to look to the United Kingdom for enforcement strategies.

They might find “important cues” at the UK’s Gambling Commission. In two recent actions, against the Entain and the William Hill groups, commissioners “aggressively enforced” web-based gambling regulations.

Last August, Entain allegedly was found to have failed in its social-responsibility and anti-money laundering efforts. Its alleged transgressions included lax gambling-safety measures, lack of due diligence and “failing to adequately assess the risks of use of its online business for money laundering or terrorist financing.” It was fined US$20.6 million.

William Hill was accused of loose AML safeguards and generally ineffective controls to minimize problem gambling and crime. It was fined $24 million.

Lawmakers face resistance from trio of gambling companies

In the U.S. state of Vermont, gambling companies are objecting to proposals for tougher regulation by the Department of Liquor and Lottery.

As reported by Sportshandle, FanDuel, DraftKings and Caesar’s Sportsbook each submitted written objections to the government plan. Complaints centered on the requirement to submit source code for independent testing. They also wanted out of advertising notices about safeguards for problem gambling.

FanDuel warned not to impose cumbersome and repetitive age or ID authentication in KYC processes that might send frustrated players to illegal gambling.

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